Trump says taxpayer pain could worsen in New York, California
President Trump slammed immigration policies in some high-tax states like New York and California on Wednesday – suggesting raising taxes to pay for them would only accelerate ongoing exoduses.
“They must think that having a big open border and having hundreds of thousands of people flowing into the United States is a good thing for our country. It’s ruinous to our country,” Trump told FOX Business’ Maria Bartiromo. “It’s tremendously expensive because now you’re dealing with schools, you’re dealing with medical, you’re dealing with everything.”
California lawmakers, for example, are working on a proposal to let young illegal immigrants enroll in the state’s Medicaid program – Medi-Cal. Eligible people up to the age of 26 would be covered, regardless of their immigration status.
The plan could cost the state as much as $98 million per year, according to estimates from California Gov. Gavin Newsom’s office. The state would be on the hook for the bill – which could spell bad news for taxpayers.
Trump said these types of policies will encourage illegal immigrants to flood in, at a time when the state “can’t pay [its] bills already,” even though residents already face some of the highest taxes in the country.
Meanwhile, on the other coast, New York state approved a bill on Monday that would allow undocumented immigrants to get driver's licenses.
Trump responded to that initiative by saying people are already “leaving New York because taxes are too high.”
New York and California are among a number of high-tax states that are contending with an exodus of residents to lower-tax states, after state and local tax (SALT) deductions were capped at $10,000 under the Tax Cuts and Jobs Act.
Earlier this year, New York Gov. Andrew Cuomo said the state was seeing “significantly lower tax receipts” as a result of the SALT changes. New York Lieutenant Gov. Kathy Hochul said the changes decreased revenues and increased taxes on the middle class.
Estimated payments were $2.3 billion below forecasts, the state said.
Data from the U.S. Census Bureau showed that while Florida (which charges no state income tax) received more movers than any other state last year, New York's outflows to the Sunshine State were the highest – 63,772 people. New York had the third-largest outflows of any state, with 452,580 people moving out within the past year.
California lawmakers have also been fighting back against the SALT cap. The state had the largest outflow of domestic residents last year – with the highest proportion of people headed to Texas, Arizona and Washington.
As previously reported by FOX Business, the SALT-driven exodus is likely only going to accelerate over the coming years – now that people have seen the tangible effects on their finances following this year’s tax season.
CLICK HERE TO GET THE FOX BUSINESS APP
On Tuesday, lawmakers from states that were hardest hit by the $10,000 state and local tax cap – including New York, New Jersey, California and Illinois – aired out their grievances on Capitol Hill. One New Jersey lawmaker said the average deduction claimed in Bergen County was more than $24,700 prior to the implementation of the new limit.
A handful of states have sued the Trump administration over the cap, a complaint the U.S. recently requested the court dismiss.
Update: A graf has been updated to clarify that tax increases on the middle class in New York resulted from changes to the federal tax code.