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Data indicate the opposite, that is the wealthy who can afford to stay and the poor who cannot afford to live here: https://calmatters.org/california-divide/202

Data indicate the opposite, that is the wealthy who can afford to stay and the poor who cannot afford to live here: https://calmatters.org/california-divide/2020/01/not-the-golden-state-anymore-middle-and-low-income-people-leaving-california/ https://calmatters.org/california-divide/2020/01/not-the-gol...

inglor_cz 6y ago
I wonder how the tax burden is distributed. I know next to nothing about California system, but here in Europe it is typical that financial investment gains etc. fall into a low bracket (usually 10-20 pct), while highly paid professional employees pay through the nose, easily more than 50 pct of their gross wages.
- burlesona 6y ago
  Taxes are not the problem, the astronomical cost of housing is. The problem is arguably that property taxes are comically low, and thus there is no penalty for the older anti-growth population that has worked so hard to pull the ladder up behind them, and instead they become rich by destroying the poor and leeching off the tech industry via its workers rents.
- kaikai 6y ago
  It's the same in the US.
- mrep 6y ago
  I did the math on my taxes somewhat recently and between federal income taxes, social security, and medicare mine was about 27% on 221k income as a single person with no kids in washington state and I'm including the employer payroll costs and taxes as part of that because it's basically the same thing as income taxes. Long term cap gains is 15-23%. For California, you'd probably add like 10% to both income tax and cap gains as it is a high income tax state whereas washington has no income tax.
  - sokoloff 6y ago
    I get about 33% for that simple case (single, $221K W-2, WA, add the employer portion of payroll costs [same as employee contribution]). It's ~28%% without the addition of employer FICA.
    - mrep 6y ago
      210 w-2, 19k 401k, 50k income taxes, 11k employer FICA, so about 61/221 = ~27.6%
      - sokoloff 6y ago
        You’re eventually going to pay ordinary income tax on the 401(k) money, so I think you need to either include it in both or exclude it from both rather than treat it as entirely non-taxable as you’ve done above.
- bcrosby95 6y ago
  California doesn't really care how you earn money. For the most part they tax it in the same set of tax brackets. The federal government is a different story though.
- opportune 6y ago
  The California state income tax rate is basically the same as for capital gains. But there is a difference federally. So in some states you would indeed pay a lower capital gains rate, and because the federal rates are lower on capital gains, Californians do pay lower overall taxes on capital gains than regular income (there are technical words differentiating capital gains from other income, don't remember it right now). I think a rough rule of thumb is that very high earners will pay slightly more than 50% of income of wages on taxes (state and federal) in CA and about 24% of capital gains income on taxes, before various deductions. But, the big difference in California is that if you inherited property or bought it a long time ago you pay much less property taxes than people who bought homes recently, due to Proposition 13. This means property taxes are not as strong a source of revenue in California compared to other states; making up that difference is partially why other taxes and fees are so much higher in California.
  - dragonwriter 6y ago
    > But, the big difference in California is that if you inherited property or bought it a long time ago you pay much less property taxes than people who bought homes recently, due to Proposition 13. This means property taxes are not as strong a source of revenue in California compared to other states; Well, the assessment rule is part of it, but prop 13 also limits the property tax rate as well as the assessments. Even with full-value assessment, California property taxes would be in the bottom half of states due to Prop 13 rate limits alone.

inglor_cz 6y ago

I wonder how the tax burden is distributed. I know next to nothing about California system, but here in Europe it is typical that financial investment gains etc. fall into a low bracket (usually 10-20 pct), while highly paid professional employees pay through the nose, easily more than 50 pct of their gross wages.

burlesona 6y ago
Taxes are not the problem, the astronomical cost of housing is. The problem is arguably that property taxes are comically low, and thus there is no penalty for the older anti-growth population that has worked so hard to pull the ladder up behind them, and instead they become rich by destroying the poor and leeching off the tech industry via its workers rents.
kaikai 6y ago
It's the same in the US.
mrep 6y ago
I did the math on my taxes somewhat recently and between federal income taxes, social security, and medicare mine was about 27% on 221k income as a single person with no kids in washington state and I'm including the employer payroll costs and taxes as part of that because it's basically the same thing as income taxes. Long term cap gains is 15-23%. For California, you'd probably add like 10% to both income tax and cap gains as it is a high income tax state whereas washington has no income tax.
- sokoloff 6y ago
  I get about 33% for that simple case (single, $221K W-2, WA, add the employer portion of payroll costs [same as employee contribution]). It's ~28%% without the addition of employer FICA.
  - mrep 6y ago
    210 w-2, 19k 401k, 50k income taxes, 11k employer FICA, so about 61/221 = ~27.6%
    - sokoloff 6y ago
      You’re eventually going to pay ordinary income tax on the 401(k) money, so I think you need to either include it in both or exclude it from both rather than treat it as entirely non-taxable as you’ve done above.
bcrosby95 6y ago
California doesn't really care how you earn money. For the most part they tax it in the same set of tax brackets. The federal government is a different story though.
opportune 6y ago
The California state income tax rate is basically the same as for capital gains. But there is a difference federally. So in some states you would indeed pay a lower capital gains rate, and because the federal rates are lower on capital gains, Californians do pay lower overall taxes on capital gains than regular income (there are technical words differentiating capital gains from other income, don't remember it right now). I think a rough rule of thumb is that very high earners will pay slightly more than 50% of income of wages on taxes (state and federal) in CA and about 24% of capital gains income on taxes, before various deductions. But, the big difference in California is that if you inherited property or bought it a long time ago you pay much less property taxes than people who bought homes recently, due to Proposition 13. This means property taxes are not as strong a source of revenue in California compared to other states; making up that difference is partially why other taxes and fees are so much higher in California.
- dragonwriter 6y ago
  > But, the big difference in California is that if you inherited property or bought it a long time ago you pay much less property taxes than people who bought homes recently, due to Proposition 13. This means property taxes are not as strong a source of revenue in California compared to other states; Well, the assessment rule is part of it, but prop 13 also limits the property tax rate as well as the assessments. Even with full-value assessment, California property taxes would be in the bottom half of states due to Prop 13 rate limits alone.