6 States Where Upper-Class Paychecks Won’t Do as Well as You Think If Trump Wins the Election
Written by
Laura Beck
Edited by
Gary Dudak
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As Election Day looms, wealthy Americans are crunching the numbers on their potential financial futures. While many assume a Donald Trump victory would be a windfall for high earners, the reality might be more nuanced. Some states could see upper-class paychecks fall short of expectations, even with Trump in the White House.
GOBankingRates consulted with a couple financial experts to identify which states might not deliver the financial boom many wealthy residents are banking on if Trump secures another term.
New York and California: High Taxes Could Offset Gains
Cliff Ambrose, FRC, founder and wealth manager at Apex Wealth, pointed out that high earners in some high-tax states might not see the windfall many expect. “Even if Trump wins, upper-class paychecks in states like New York and California may not fare as well as expected,” Ambrose said.
He explained why these states might miss out on some benefits. “These states have high state and local taxes, which can offset the benefits of federal tax cuts,” he shared. “While Trump’s policies may lower federal taxes, the high cost of living and property taxes in these states could erode any gains for wealthy individuals.”
Ambrose added that local expenses could keep paychecks from growing significantly. “Despite lower income taxes at the federal level, local expenses in these states may keep paychecks from growing significantly,” he said.
Massachusetts: High Local Costs Offset Federal Gains
Paul Carlson, managing partner at Law Firm Velocity, told us that Massachusetts is a state where upper-class paychecks might not see the expected boost. “Massachusetts has a flat income tax rate of 5%, but when combined with high property taxes, it can be tough on upper-income earners,” he explained. “Trump’s tax cuts might not offset these local costs.”
He added, “The SALT [state and local tax] deduction cap really impacts wealthier residents here. Many can’t deduct all their state taxes from their federal returns, which means they end up paying more overall.”
New Jersey: High State Taxes Dampen Federal Benefits
Carlson thinks New Jersey is a state where the wealthy might not fare as well as expected. “New Jersey is notorious for its high property taxes and income taxes. While Trump’s tax cuts could help at the federal level, they won’t alleviate the burden of state taxes,” he said.
He added, “With a high cost of living and expensive housing, many upper-class individuals in New Jersey might find that their paychecks don’t go as far as anticipated under Trump’s policies.”
Illinois: SALT Deduction Cap Hits Hard
Carlson thinks upper-class paychecks might hit some stumbling blocks in Illinois, too. “Illinois’ economy is heavily dependent on high-income earners, particularly in industries like finance and technology. If these individuals face a higher effective tax rate due to the SALT deduction cap, it could have a negative impact on the state’s economy.”
He added, “Illinois has some of the highest property taxes in the country, with the average homeowner paying over $4,000 per year. This means that even with federal tax cuts, residents will still face a significant tax burden.”
Connecticut: State Budget Issues Complicate Federal Tax Benefits
Carlson also highlighted Connecticut as a state where upper-class paychecks might fall short of expectations. “Connecticut’s high-income tax rate, which can reach up to 6.99%, means that even with federal tax cuts under Trump, the state’s residents probably won’t see big savings,” he said.
He pointed out an additional concern: “Connecticut also faces ongoing budget issues, which could lead to further tax hikes at the state level. It undermines any potential benefits from Trump’s federal tax policies.”
The Final Word
Of course, it’s impossible to predict the future — what seems absolute one day can be not true the next. And campaign promises don’t always equal actual legislation. It’s important to keep an eye on what candidates say and what they actually do.
As November approaches, it’s important to watch the election (and your money) closely. That way you are prepared for whatever comes your way — financially and otherwise.
Editor’s note on election coverage: GOBankingRates is nonpartisan and strives to cover all aspects of the economy objectively and present balanced reports on politically focused finance stories. You can find more coverage of this topic on GOBankingRates.com.
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