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“I’m moving out of state”: employees are trying to avoid California income tax
- outside1234 8y agoGood luck with that - if you have a California license plates, drivers license, or they can prove you show up pretty frequently to a California located job - you are going to get caught doing this and fined extensively. Also, WTF: You took advantage of all of the infrastructure of a state to get rich and now you don't want to contribute back? Shame on you and may karma come around for you.
- crisdux 8y agoLet's be a bit honest here. California public infrastructure has hardly contributed to the windfall people are getting due to their work in the tech industry.
- sigi45 8y agoThan don't work there. Or try to influence how those riches are spend.
- 40acres 8y agoDoes the UC system not count as "public infrastructure"?? I wouldn't be surprised if the UCs are the core driver for a lot of California's growth over the decades.
- anonuser123456 8y agoThe UC system is a vortex for DARPA and NSF dollars.
- sundaeofshock 8y agoAre saying tech workers don’t use public roads or mass transit to leave their homes?
- cc439 8y agoPiblic roads are almost always maintained by the local municipality though and they collect the least taxes of any level of governmwnt yet deliver the most services. I've never bought that argument unless applied to the modern interstate system which was once a Federal responsibility but is now mostly state funded.
- scottlocklin 8y agoLol, have you ever actually been to California? The infrastructure was all built in the 1960s, and appears to have been abandoned as thoroughly as the Roman aqueduct system after the barbarian invasions. Easily the most corrupt state I've ever seen; most of the money goes to buying votes.
- bob_theslob646 8y agoYou are not wrong, but by per capita it is less. Page 26. UNITED STATES ATTORNEYS’ OFFICES FEDERAL PUBLIC CORRUPTION CONVICTIONS BY DISTRICT OVER THE PAST DECADE (https://www.justice.gov/criminal/file/1096306/download https://www.justice.gov/criminal/file/1096306/download)
- scottlocklin 8y agoFunny Texas looks comparable at a glance in number of corruption convictions, and somehow manages to do this at 0% income tax rate. Kinda rankles less when you don't have to pay for it.
- bhauer 8y agoI live in California for the weather and the fact that other people are here. Government services and infrastructure are below average, in my opinion. Infrastructure is serviceable where I live (Los Angeles) but not reflective of the massive income of the state. Without the weather, Los Angeles would lose a huge amount of its appeal. All it would have left is the simple fact that a lot of people already live here. But with its weather, it's like a year-round paradise to many people.
- vonmoltke 8y ago> Easily the most corrupt state I've ever seen You have obviously not spent significant time in New Jersey or Louisiana.
- cptskippy 8y agoWhat specifically about the infrastructure are you objecting to besides the aesthetic?
- cheeseomlit 8y agoYeah shame on them for not taking their extortion in stride. Their contributions are essential for all that great infrastructure like the new high speed rail between SF and San Diego, oh wait.. https://www.latimes.com/local/lanow/la-me-bullet-train-california-problems-20190213-story.html https://www.latimes.com/local/lanow/la-me-bullet-train-calif...
- AlexandrB 8y ago> The state of California treats capital gains just like any other income, levying a 13.3 percent state tax on sales of stock. For someone sitting on tens of millions of dollars in private stock — life-changing money for some — it’s not a small concern. Yes, it literally is! It's 13% - that's about the same as sales tax in many places and nowhere near AOC's 70% tax. This is greed, plain and simple. 99% of the world would do almost anything to have this "problem".
- tenpies 8y agoAnd 99% of the world would act in the same way if they had the luxury of that problem. I understand why Leftist populists love attributing some sort of exceptional immorality to the wealthy, but people act on incentives. Give them an incentive to leave and they will leave.
- octonion 8y agoIf you live in California, you obey California laws or you go to California jail. If you don't agree with what California has decided is necessary for a healthy society, you have states like Mississippi and Louisiana to choose from. Good luck finding a high-paying job there.
- lightedman 8y ago"Good luck finding a high-paying job there." I guess you have no clue what jobs actually exist in those states. They're the same jobs that exist in every other state. Then to boot, there are plenty of high-paying jobs which exist in those states which generally do not exist in many others, like offshore oil rig jobs.
- Jhndb 8y agoOr all the other states with plenty of high paying tech jobs
- chrshawkes 8y agoRidiculous comment. I live in VA and we're doing quite well thank you. Silicon Valley incomes without the state corruption. Our problem is electing a decent governor apparently. I'll take VA over California every time.
- Bucephalus355 8y agoI fly out to California 5 days a week for consulting work currently. I live in Texas. So does my wife and dog. My paycheck’s now include the 13% deduction from California :( I’m leaving this project as soon as possible. Would happily pay 13% more for federal income tax FWIW.
- lightedman 8y agoSue the state for falsely claiming you as a resident for fraudulent tax purposes, and file the suit in Texas. Your airline tickets and job alone should be enough evidence for a Texas judge, and that will firmly establish residency in Texas. You may then nail California very hard for their fraudulent scheme.
- skh 8y agoWhy does a 13% tax to California bother you if a 13 percentage point increase in tax to some other entity doesn’t? Is it dislike of California? Dislike of state taxes? This reminds me of an experiment I read in - I think - Nudge. A random group of people were given the scenario of being at a store and about to buy a box of chocolate for $10. Just before they purchase it they find out they can buy it at a store a few blocks away for $5. Most said they would go to the other store. Another group of random people were asked the same scenario but with a tuxedo costing $1500. The competitor store a few blocks alway sold the tuxedo for $1495. Most said they would not go to the other store for just a $5 decrease in cost.
- pliny 8y ago>On the other hand, Silicon Valley money is made in California and draws on California services. Employees commute to work on taxpayer-funded roads and many studied at taxpayer-funded schools. And one extreme example: When a gunman shot four people on the campus of YouTube last spring, it was San Bruno police that responded to the scene. This argument is scale invariant, you could say that any level of taxation justifies any level of services. The moral argument for not aggressively minimizing your tax burden has to pass through the question of how effective the state is at spending the money it collects, and so it must also depend on the question of how other states manage to do the same work the California Government does (having schools, roads and police) with much lower rates of income and sales tax and a much less smaller tax base.
- cpursley 8y ago> how effective the state is at spending the money Exactly! I'm okay with higher taxes as long as the jurisdictions who collect them are good stewards of the money. First, governments must prove to me that they can efficiency provide promised services before convincing me to hand over more. How is it that other nations/jurisdictions can have lower taxes than the USA, but still manage to provide for universal healthcare, free education, and a well funded military (Russia with a 13% flat tax and Singapore with a 22% top rate come to mind)? I just don't understand where the tax money is going in the USA at both federal and state levels. Why do we get such low value for our tax revenue? Also, my problem with tax systems is they are often about "punishment" and politics instead of providing government services...
- anonuser123456 8y ago>I just don't understand where the tax money is going in the USA at both federal and state levels. You can find it online with a simple Google search. Pensions, medicare and social security are the bulk of the spending.
- pjc50 8y agoTwo out of the three of those are deferred compensation and linked to earlier wage deductions.
- turc1656 8y agoThe article is either slightly disingenuous or just structured less than ideally: "It’s perfectly legal, but is it right?" but then shortly after..."A post office box or a studio apartment somewhere on the east coast? They’ve seen it before. Claiming that your significant other and kids live in California — but you don’t? Good luck with that." That's not legal tax avoidance. That's downright tax evasion and is a crime. If you are making false claims on your tax returns that's flatly illegal. Full stop. Do not pass go. Do not collect $200. Some of these claims made aren't very debatable or up to much interpretation. Saying you live somewhere but you don't is lying and when done on official documents that's illegal and a form of fraud - in this case evasion. You can't claim to live on the East coast but then somehow work in Silicon Valley everyday and your family lives in CA.
- commandlinefan 8y agoYeah, the big fear here in Texas is that they're all going to move down here with their California liberal sensibilities and vote in a state income tax here, too.
- toomuchtodo 8y agoThe only constant in the world is change.
- sodosopa 8y agoIt’s becoming more purple instead of a red or a blue state, so it wouldn’t take much.
- influx 8y agoLikewise here in Washington state. All the Californians are fleeing here and implementing the exact same polices that drove them to leave. Odd.
- blakesterz 8y agoI lived in Seattle in 1993 and people were saying the same thing then. I know that sounds like a snarky throw away comment, but my point is just that people thought the same thing in 1993. I don't know if it's different now, could be.
- deleted 8y ago[deleted]
- pochamago 8y agoWere they wrong? Hasn't Seattle shifted to be more like California over time, politically?
- mikestew 8y agoAs a WA resident, I defy you to back that up. It’s the same shit I’ve heard for twenty years I’ve lived here: “it’s the Californians’ fault.” From bad driving to bad politics: it is your own damned fault, WA.
- CompelTechnic 8y ago>If you’re hanging out in California for nine months or more in a year, you’re considered a Californian. But even if you’re there for shorter periods, the state can still consider it your domicile if the fact pattern shows that you’re treating California like your real, true home. And that’s why advisers recommend that the megarich do a ton of sometimes unpleasant things to establish a real domicile elsewhere. This is a key point in the article. California goes out of its way to bend the rules in its favor, and to claim certain people are residents when a basic residency test does not determine that they live there. I have previously read horror stories of people hounded for years, having to fight it out, and either paying taxes they do not owe or accumulating late fees for taxes that they should not owe. It is fair to set a stricter, objective, residency test. But it isn't fair to treat people the way they are doing it now.
- logfromblammo 8y agoIt's fair for states to set residency requirements for some things, such as whether you qualify for in-state tuition, or for hunting and fishing licenses. But I don't think that change of legal domicile should be anything but an overt act of volition. If you surrender your driver's license from your old state, and take a replacement from your new state, you have implicitly changed your domicile to the new state. But changing that driver's license may just be a concession to the fact that the new state is where you do most of your driving, and your old state might make it too inconvenient to renew licenses when you are physically elsewhere. Inconvenience alone does not make one's home change. You might physically spend 11.5 months out of every year in State X, but you might also have 2 parents, 1 grandparent, 3 siblings, 2 aunts and uncles, 5 first cousins, 15 old friends, and 30 cemetery burial plots for people whom you knew, and years of memories in State Y. I think your domicile is probably State Y, no matter what State X tries to claim. I have been where I am now for about ten years, but I still don't consider it "home". I'm only here because this is where the job is. I don't know when, exactly, I can ever return "home", or where it might be when I do, but the only places I have lived so far that really felt like "home" so far were Indianapolis and Madison, Wisconsin. Everywhere else has felt like the place belongs to someone else, and I was only allowed to temporarily stay there by some special indulgence. Any state that tries to tell me that it is my home, whether I want it to be or not, is probably not one that I'd want to be my home.
- addicted 8y agoA major issue is that California pays for its own stuff, but it also has to pay for most other states’ stuff as well. A lot of other states get by with lower state tax simply because they are net receivers of federal taxes which supplements stuff Californians pay for themselves.
- panzagl 8y agoIt pays for stuff Californians rely on but can't stand the sight of.
- logfromblammo 8y agoLike the air and missile defense installations in Alaska that happen to be near all the great circle routes between Pyongyang, Beijing, or Kamchatka; and Seattle, Portland, or San Francisco.
- skh 8y agoThis I think will end up becoming more of a complaint in the coming years. There will be a shift in the set of people who use “states rights” as a reason for policies. Increasingly states that subsidize places like Mississippi and Alabama are going to wonder about the role of the federal government. Ironically, I think those who are liberal ought to embrace the Republican talking point about limiting federal power and the federal government.
- dkjshfajskdfa 8y agoThis argument is specious, it is more complicated then taxes in vs direct federal money release back. What is the net economic benefit of Federal Reserve Bank of New York to New York state considering all the money made by the primary dealers? For example.
- castlecrasher2 8y ago>but it also has to pay for most other states’ stuff as well Strange this point is so frequently tossed around, despite it being false: https://www.latimes.com/politics/la-pol-sac-california-federal-government-money-20170205-story.html https://www.latimes.com/politics/la-pol-sac-california-feder... "Lawmakers have long lamented that Californians pay more in taxes than they receive back in services, hanging their hats on a 2007 report by the conservative Tax Foundation that California is a "donor state" that receives only 78 cents in services for each dollar in taxes paid. But state analysts point out that report added extra tax dollars from Californians — beyond those actually paid — to cover the state's share of the federal deficit. Perhaps more accurate is a 2015 state-by-state review compiled by New York officials, one that puts California much closer to breaking even — about 99 cents in federal services for every real dollar in taxes."
- Reedx 8y agoAs someone that lives in the Bay Area, I wouldn't mind it if our taxes were being used effectively. But we do so little with so much. The state of our infrastructure, public transit and the homeless situation is embarrassing. Especially in SF. The conversation about taxes always seems to be so shallow to the point of being binary. One side saying we need to increase taxes to fix things, the other saying we need to decrease them. What about efficiency? We can do a lot more with what we have.
- NDizzle 8y agoWhat do you mean we do so little?! Look at all the GREAT THINGS we do. Have you ever considered the privilege of drinking water? We should tax that. What about your car? We should come up with an emissions standard that ONLY APPLIES TO US. 49 state legal? Who's the odd man out? That joker. What about your rifle and pistol magazines? Let's make manufacturers come up with a standard that literally only applies to our state, in the entire world. That will go over well! Droughts? HA! That would require improving and building additional infrastructure for our water reclamation system. Surely we can just let it flow into the ocean - water is water, right? PS: we're going to tax it! Fires? Controlled burns to clear underbrush? You must really hate the environment! Why would you want to burn our precious underbrush?!?!? :(((
- moosey 8y agoNormally a country that is the size of CA, and having the same economy, would have a broader tax base because it wouldn't be losing money to another government, in this case, the federal government of the United States. Of course, there is Prop 13, which greatly harmed the state's ability to collect taxes. Finally, I'd argue that efficiency is impossible as long as the government continues to use the same just-in-time models that the private sector uses. The main problem being that there is no guarantee of work or quality when a contractor is hired by a government. We either need those guarantees or we need to switch back to in-house work.
- RhysU 8y agoNormally a country that is the size of CA, and having the same economy, would have to pay for its own military, etc. The Federal government does provide irreplaceable services.
- j-c-hewitt 8y agoThe sort of funny aspect of bringing up that local CA non-state police responded to the Youtube shooting is that having your office shot up by a radical Iranian vegan Youtuber is also only something that could happen in California.
- koolba 8y agoAnybody here have success with having their founder stock be “bought” by their IRA? Wouldn’t want the whole thing in there but a sizable chunk combined with a liquidation event would give a massive tax deferred retirement account. Plus if you do it early on you could value the initial stock at peanuts.
- throwawaymanbot 8y ago"Nobody likes paying taxes, but new millionaires in California’s IPO gold rush are looking to protect their money." My Heart bleeds for these millionaires.