I think the (perfectly sensible) idea is to keep "working" from SF to get a large bump in salary from Facebook (or others) that should more than offset the high

I think the (perfectly sensible) idea is to keep "working" from SF to get a large bump in salary from Facebook (or others) that should more than offset the higher taxes. It just happens that your living expenses dropped because you are now sharing space with a bunch of other developers in nano-flats (in a converted warehouse with a huge VPN relay pipe). In reality you are working from your second home (say, a vacation property at some cheaper place). I am sure it is somewhat irregular, but I am not sure it is illegal and while 100% against FB policy I do not think they can really act against you without FBI-style anti-employee snitching, which can easily backfire.