Posted By Vicki McClure Davidson on May 20, 2009

By Vicki McClure Davidson * Frugal Café Blog Zone

Breaking up is hard to do… but if you can save $5 million in taxes a year by leaving New York, you wipe the stray tear away and just do it.

Billionaire Tom Golisano, founder of Paychex and owner of the Buffalo Sabres hockey team, is saying “sayonnara” to New York and will be taking his business to the more successful-business-friendly state of Florida.

He’s had enough. Golisano is sick to death of paying taxes, taxes, and more taxes in New York because of his company’s success. I think he wouldn’t mind so much if the state actually spent those excessive taxes wisely.

Conservative radio talk show host Rush Limbaugh, who is a millionaire, is also selling his penthouse in New York. Limbaugh has a permanent residence in Florida, but lives in New York about 15 days a year during Florida’s hurricane season. Because of his home and a backup radio station there, he has hefty tax obligations in the Big Apple (more on that later). Limbaugh has been very critical about Gov. David A. Paterson’s punishing “millionaire’s tax,” among other things. According to the New York Times:

Mr. Limbaugh also had harsh words for Mr. Paterson, calling his tax increases “stupid,” and, according to The Huffington Post, saying they amounted to “punishing the achievers for the mistakes and the lack of discipline on the part of a bunch of corrupt politicians.”

…Mr. Paterson said he was hardly sorry to see him go.

“If I knew that would be the result,” he said after a speech… in Midtown, “I would’ve thought about the taxes earlier.”

Good attitude, Gov. Paterson, and gee, so financially sound for an elected official whose state is bleeding red ink. Just how many more millionaires can you alienate and lose before New York City and/or the entire state collapses like a rickety house of cards from your wild spending? Doesn’t look like you’re seeing the forest for the trees here. Your flippant dissing of Limbaugh is indicative of how very myopic you are about the crisis New York is in.

On his leaving, Golisano wrote the following letter that was published in today’s New York Post.

New York Post
ADIOS, NEW YORK – Taxed Out of the State
By Tom Golisano
May 20, 2009

I LOVE New York. But how much should it cost to call New York home? Decades of out-of-control budgets, spending hikes and relentless borrowing have made New York simply too expensive.

Politicians like to talk about incentives — for businesses to relocate, for example, or to get folks to buy local. After reviewing the new budget, I have identified the most compelling incentive of all: a major tax break immediately available to all New Yorkers. To be eligible, you need do only one thing: move out of New York state.

Last week I spent 90 minutes doing a couple of simple things — registering to vote, changing my driver’s license, filling out a domicile certificate and signing a homestead certificate — in Florida. Combined with spending 184 days a year outside New York, these simple procedures will save me over $5 million in New York taxes annually.

By moving to Florida, I can spend that $5 million on worthy causes, like better hospitals, improving education or the Clinton Global Initiative. Or maybe I’ll continue to invest it in fighting the status quo in Albany. One thing’s certain: That money won’t continue to fund Albany’s bloated bureaucracy, corrupt politicians and regular special-interest handouts.

How did the state get to this point? By spending, spending and spending some more.

* New York’s budget was $72.7 billion in 1999. Ten years later it ballooned to $131.8 billion. Each year, on average, the budget has risen at an astounding 6 percent compounded annual rate — more than double inflation (2.8 percent).

* Medicaid spending alone works out to $2,283 for every man, woman and child in the state. That’s the highest in the nation and twice the national average. In the last decade, the Medicaid budget grew 50 percent (from $30 billion in 1999 to $45 billion in 2009). In almost every sector (hospitals, nursing homes, medicine, clinics and home and community care), spending per recipient regularly exceeds the national average.

Faced with escalating costs and diminishing returns, Albany and its allies — that is, the health-care unions (SEIU Local 1199 has more than 300,000 members, many of whom are politically active) — have only one answer: increase taxes.

However, it may not be as easy as Golisano thinks. Rush Limbaugh addresses Golisano’s New York move with this concerned advice that aired today on his EIB radio program:

…So, Thomas Golisano is exercising the mobility that federalism promises. He is escaping New York. He’s moving here to Florida, which has no state income tax. However, Mr. Golisano, I gave you some advice a couple of days ago, and I’m going to do so again today. Forget this notion about spending 184 days a year outside New York as qualifying you for an exemption in New York state taxes. I left in ‘97. In 2002 I got a notice I was being audited for ‘97 through 2002. And the state’s starting point was that I had not really left, that I’d just said I had left to avoid their taxes. I began a two-year process of proving where I was every day of the year, 14 different ways.

At the end of this process I could either have taken them to court (and you always lose in tax court) or just settle, and the settlement was that for every day I work in New York I’ll pay state and city taxes based on my income that year, a per diem tax. I spend 15 to 20 days in New York and been paying it. I paid the back taxes from ‘97 to 2002. Last October I got a notice I’m being audited from 2005 to 2007. This audit is over the top. This audit is nothing but pure political harassment. I got a request for documents the other day that… They defy explanation. I’ve got so many different ways I can prove where I was, not the least of which is the Dittocam. The studios are different. The IP addresses of computers, telephones all of this stuff. It doesn’t matter. It’s just pure political harassment, all for whatever amount of taxes they can collect from me.

I’ll give you my number. My number is $20,000 a day, every day I work in New York, $20,000 a day. Sometimes 18, sometimes 20. My income changes year to year, so I guess it averaged out $18,000 a day. Whether I’m in New York zero days or not, I get audited. This 184 days a year, Mr. Golisano, if you think all you’ve gotta do is spend six months and one day outside of New York? (snorts) Not true. Mr. Golisano, you own the Buffalo Sabres, the hockey team in Buffalo, New York. That team does business in New York every day. You derive income from the business activities of the Buffalo Sabres every day. New York state is going to catch up to you since you’ve advertised what you’ve done, and they’re going to demand taxes from you as though you are a resident because you are earning money in New York via the Buffalo Sabres.

And if Paychex is headquartered there, too, it’s not going to matter where you live. They’re going to come after you and they’re going to demand you prove it. They’re going to assume… You’re going to have to tabulate the days, and if you’re in New York 180 days, you’re going to pay the per diem tax on 180 days. As long as you have the Sabres and it’s generating income or revenue for you every day of the year — and it’s a year-round business, not just the season when the hockey games are played.

So the point is that even though you have mobility, these governments that are horribly in debt still have only one place to go to get money that they refuse to stop spending themselves, and that is from the producers and the people who are working — and they don’t care the impact it has.

Now, Mr. Golisano is going to either have to move the Buffalo Sabres somewhere or sell ‘em. Because you have an asset there, buddy, and you derive income from it every day. Therefore you are getting paid. Part of your income derives from income generated in New York whether you live here or not.

That is how the state plays the game. So this is a hideous thing that happens. I think New York state has a unit in Albany that does nothing but follow people who leave New York to no-income-tax states and harass them. I’m sure that’s how they find you, keep up with you, and eventually come calling on you. And if, you know, you’re a public figure, a lightning rod figure, the people that work for you, they don’t want any trouble, you know, so you have to provide the aggressiveness yourself. It’s a very maddening and frustrating thing.

Related reading:
Peace and Freedom Promises: Obama Hasn’t Noticed People Leaving California and New York? and The Coming California Bailout
Radio Vice Online: Nice… Paychex founder goes Galt on New York – sort of
Michelle Malkin: Two Democrats in New York abandon ship, give GOP control of state Senate and Billionaire to New York: Screw you
Suitably Flip: New Evidence Confirms: People Rational
Who am I? Why am I here?: Woes of renting in New York City
Urban Grounds: Tom Golisano: Goodbye New York and Failed Democrat Policies
Buffalo News: Golisano leaving New York to escape income taxes, says he’s paying $13,000 a day

Categories: Conservatism, Economy, Freedom of Speech, Government, Social and Political Climate, Thrifty Advice
Tags: billionaire, budgets, Buffalo Sabres, California, citizens against government waste, David Paterson, EIB, Florida, government waste, governor, high taxes, hockey, John Galt, millionaire, millionaire tax, New York, New York City, New York Post letter, NY governor, NYC, Obama money, Paychex, radio talk show host, Rush Limbaugh, spending, talk radio, taxation, taxes, taxpayer, Tom Golisano, Tom Golisano letter