Mansionmaxxing: StatisNostics uncovers the financial motive behind Jeff Bezos’s recent move to Miami Beach, FL.
Date Published
Is it easier for a camel to enter the eye of a needle than for a rich man to enter the kingdom of God? Earlier this year, we talked about how J.B. Pritzker took that bet by moving his assets from Illinois to Texas, saving buckets of tax money in the process. Now, billionaire Amazon founder Jeffery Bezos is taking his chances after his recent purchase of multiple properties in Miami Beach, FL. He and his fiancé, Lauren Sanchez, are relocating from his longtime residence in Washington state to Florida, citing proximity to family and Bezos’ Blue Origin company as reasons for the move. However, Jeffrey's motives for moving may prove more financial than familial. In this article, StatisNostics is measuring how Bezos’ new residence stacks up against his Seattle estate.
On the surface, moving to Miami Beach comes with a lot of downsides that his previous residence in Medina, WA did not. Miami Beach’s Spending Pressure is measured at 70, which is significantly higher than Medina’s (57). This means that the government expenditure of Miami Beach is imposing a higher economic burden on Bezos than the government expenditure of Medina did, which can result in a net loss of asset value. Miami Beach’s effective property tax rate is also slightly higher than Medina’s (1.59% vs 0.99%). This may not seem like much, but it adds up when you consider that Bezos purchased $237 million worth of Miami Beach real estate for his move. Additionally, Miami Beach carries a relatively high FEMA Risk Assessment score of 93, in large part due to a significantly higher risk of coastal flooding. It’s plausible that all of Bezos’ new real estate could be underwater by the end of the century!
However, what Bezos loses in local taxes, he makes up for in state taxes. As reported by CNBC, Washington State implemented a 7% capital gains tax in 2022 that applied to all sales of stocks or bonds totaling more than $250,000. This tax would stand to take a sizable chunk out of whatever Bezos gained by selling Amazon stock - which he has done almost every year since 1998. Once the tax was imposed, Bezos responded by not selling any Amazon stock in 2022 or 2023. Since Florida has no capital gains tax, Bezos can once again sell Amazon stock without having to give part of the sale to the state. It is no coincidence that Bezos chose to launch a 50 million share pre-scheduled stock-selling plan after his move to Florida had been finalized, saving him $610 million that would have otherwise gone to Washington state.
Another financial benefit that’s easy to miss is the major difference in debt burden between Seattle and Bezos’s new home in Indian Creek Village. According to StatisNostics, a database that utilizes U.S. government census data, Miami Beach as a whole has a high debt index score of 83/100, meaning a high amount of debt per resident. Seattle, WA, which housed Bezos’s previous residence, also has a debt index score of 83/100. So why relocate to a city with the same, if not more, debt? Let’s take a closer look. When you zero in on Indian Creek Village, the Miami Beach city that Bezos is moving to, the debt index score plummets to 1/100. Indian Creek Village, affectionately known as “Billionaire Bunker '' also houses other affluent individuals like Ivanka Trump, singer David Guetta, and quarterback Tom Brady. Considering that Billionaire Bunker is a lot more financially sound than other parts of Miami Beach, it’s perfectly logical for high-income people to move there and retain their wealth.
Bezos’ move to Miami Beach demonstrates a concept that economists and political scientists call “voting with your feet”1. To vote with your feet is to express your political preferences not at the ballot box, but instead by moving to the place that best matches those preferences. If Bezos wants to live in a state that doesn’t impose a capital gains tax, he can vote to change the tax code, but in a state housing 7.8 million people, it is unlikely his vote will make much impact. Thus, it is more effective for him to just move to a state without capital gains tax, which is why his Florida move makes sense. The money Bezos saved can now be used to support Blue Origin, his various philanthropic efforts (including a new preschool initiative2), or even a new yacht purchase! Only God will be able to judge if these causes are more virtuous than paying taxes to the Evergreen State.
1. Frank, Robert. “Jeff Bezos Will Save over $600 Million in Taxes by Moving to Miami.” CNBC, CNBC, 12 Feb. 2024, www.cnbc.com/2024/02/12/jeff-bezos-move-to-miami-will-save-him-over-600-million-in-taxes.html.
2. Holley, Kayla. “Do Rich Men Go to Heaven, or Just to Texas? Statisnostics Breaks down How J.B. Pritzker Gamed the Legal System to Move His Trusts from One State to Another.” StatisNostics, 22 Jan. 2024, statisnostics.substack.com/p/do-rich-men-go-to-heaven-statisnostics.
3. Iacurci, Greg. “Miami Is ‘ground Zero’ for Climate Risk. People Are Moving to the Area and Building There Anyway.” CNBC, CNBC, 26 Apr. 2024, www.cnbc.com/2024/04/26/miami-is-ground-zero-for-climate-risk-people-move-there-build-there-anyway.html.
4. Jacob, Mary K. “Jeff Bezos Acquires Third Mansion on Exclusive Miami Island, Sparking Elite Envy.” New York Post, New York Post, 2 Apr. 2024, nypost.com/2024/04/02/real-estate/jeff-bezos-acquires-third-mansion-on-exclusive-miami-island-sparking-elite-envy/.
Cover Art Credit: WorldEngine
1. For an extended discussion on foot voting, see: Somin, Ilya. “Voting with Our Feet.” Cato.Org, Cato Institute, 20 Sept. 2021, www.cato.org/commentary/voting-our-feet.