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I keep thinking this does not bode well for California. As more of these software companies embrace work from home, we may see an exodus of high paying jobs lea

by vondur 6y ago

I keep thinking this does not bode well for California. As more of these software companies embrace work from home, we may see an exodus of high paying jobs leaving the state for locations that are cheaper and better run. California currently gets a large chunk of the state budget from income tax.

nerdponx 6y ago
I wonder about if/how this will affect New York as well. It's probably good for the USA in the long run to have more remote work and/or more tech jobs spread out across smaller cities. But there might be adverse implications for the areas stand to lose their statuses as "tech hubs".
mandeepj 6y ago
Remote work does not mean you get away with State income tax.
- what_ever 6y ago
  Companies will change policies to reflect the work location as the office location. So the state income tax issue would be sorted.
  - mandeepj 6y ago
    Will? My friend let’s talk in the present. Cheaper location move can also mean less pay https://www.marketwatch.com/story/facebook-employees-may-face-pay-cut-if-they-move-to-cheaper-areas-to-work-from-home-2020-05-21 https://www.marketwatch.com/story/facebook-employees-may-fac...
    - shajznnckfke 6y ago
      Yeah, if you’re trying to establish residency in another state, you probably need to tell your employer to use that state for your W2 so they stop deducting state tax and so California doesn’t think you still are earning money there. That means your employer knows you moved, and knows you’re saving all that money, so they will probably lower your pay. I think you can still come out ahead if you have a ton of stock to vest, because they can’t cut that, but you still benefit from the lack of state tax there. But once the plague situation ends I think WFH employees will be in a weaker position and tend to get smaller refresh grants. It could be a great one-year-only move for anyone who’s due for a windfall from one of these IPOs.
    - what_ever 6y ago
      Yes, but that's not the comment I am responding to was talking about. The parent comment was about having to pay CA state taxes after moving out of CA - which everyone has to do right now due to most of the employers not willing to update the work location. So just physically moving outside CA doesn't get you off the hook for CA taxes. But if remote work becomes the norm, companies will update the location. My comment had nothing to do with updated incomes based on the location which is of course going to be the reality. Disclosure: not a tax accountant, talk to to one if you want accurate information.
SpicyLemonZest 6y ago
California was already a rich state before Silicon Valley, so while individual cities might run into trouble, I don't think we should expect changes in software job patterns to be a disaster for the state as a whole. Pharmaceuticals, Hollywood, and agriculture can't really go remote.
- vondur 6y ago
  I wouldn't bet on it. Hollywood has moved tons of filming out of the State, and agriculture here is now being threatened by water reductions to farmers. Pharmaceuticals I think is still doing well.
  - bluedays 6y ago
    There is not going to be a mass exodus from high paid workers in California unless there is a mass exodus of perfect weather.
ffggvv 6y ago
i don’t see most of the companies embracing work from home. with a few notable exceptions, the expectation is that as soon as the pandemic is over were expected back in the office.

by vondur 6y ago

nerdponx 6y ago

I wonder about if/how this will affect New York as well. It's probably good for the USA in the long run to have more remote work and/or more tech jobs spread out across smaller cities. But there might be adverse implications for the areas stand to lose their statuses as "tech hubs".

mandeepj 6y ago

Remote work does not mean you get away with State income tax.

what_ever 6y ago
Companies will change policies to reflect the work location as the office location. So the state income tax issue would be sorted.
- mandeepj 6y ago
  Will? My friend let’s talk in the present. Cheaper location move can also mean less pay https://www.marketwatch.com/story/facebook-employees-may-face-pay-cut-if-they-move-to-cheaper-areas-to-work-from-home-2020-05-21 https://www.marketwatch.com/story/facebook-employees-may-fac...
  - shajznnckfke 6y ago
    Yeah, if you’re trying to establish residency in another state, you probably need to tell your employer to use that state for your W2 so they stop deducting state tax and so California doesn’t think you still are earning money there. That means your employer knows you moved, and knows you’re saving all that money, so they will probably lower your pay. I think you can still come out ahead if you have a ton of stock to vest, because they can’t cut that, but you still benefit from the lack of state tax there. But once the plague situation ends I think WFH employees will be in a weaker position and tend to get smaller refresh grants. It could be a great one-year-only move for anyone who’s due for a windfall from one of these IPOs.
  - what_ever 6y ago
    Yes, but that's not the comment I am responding to was talking about. The parent comment was about having to pay CA state taxes after moving out of CA - which everyone has to do right now due to most of the employers not willing to update the work location. So just physically moving outside CA doesn't get you off the hook for CA taxes. But if remote work becomes the norm, companies will update the location. My comment had nothing to do with updated incomes based on the location which is of course going to be the reality. Disclosure: not a tax accountant, talk to to one if you want accurate information.

SpicyLemonZest 6y ago

California was already a rich state before Silicon Valley, so while individual cities might run into trouble, I don't think we should expect changes in software job patterns to be a disaster for the state as a whole. Pharmaceuticals, Hollywood, and agriculture can't really go remote.

vondur 6y ago
I wouldn't bet on it. Hollywood has moved tons of filming out of the State, and agriculture here is now being threatened by water reductions to farmers. Pharmaceuticals I think is still doing well.
- bluedays 6y ago
  There is not going to be a mass exodus from high paid workers in California unless there is a mass exodus of perfect weather.

ffggvv 6y ago

i don’t see most of the companies embracing work from home. with a few notable exceptions, the expectation is that as soon as the pandemic is over were expected back in the office.