4 ms·

Because most of the wealthy people are not physically tied to any state for residency purposes, and most of them don't run CA-only based businesses, and because

Because most of the wealthy people are not physically tied to any state for residency purposes, and most of them don't run CA-only based businesses, and because property tax is a smaller expense than income tax.

jedberg 4y ago
That only applies to about the top 20 families in the state. The rest of the wealthy people like it here because of the weather and services the state provides as well as the strong markets. Keep in mind that VPs at FAANG make more than $2M a year (which is where this tax kicks in). A VP at Google could pick up and go to another state, and some have, but most of them like it here.
- jamiequint 4y ago
  Do you have any data to back up what you're saying, or is that entirely anecdotal? If that only applies to the top 20 families in the state then I seem to know at least half of them personally, which seems statistically unlikely. Regardless of whether wealthy people like CA because of the weather or services the state provides (although I can't think of a single wealthy person who cares about the services that California provides), there's a tradeoff between those things and cost. If you increase the marginal cost of living in California by 4.5% some people will leave. Particularly those folks like startup founders or early employees who expect to earn the bulk of their net worth on a single transaction that will be taxed at the top marginal rate.
  - jedberg 4y ago
    It's not possible to provide data because you didn't define what "wealthy" means, and neither did I. The point is that you have to be ultra-wealthy for it to be worth picking up your whole family and moving to another state just for tax purposes.
    - WalterBright 4y ago
      The people decamping from New York City to Florida for tax reasons suggest otherwise. California is already experiencing population decline as people run away from the taxes and crime.
      - jedberg 4y ago
        > The people decamping from New York City to Florida for tax reasons suggest otherwise. Do you have any data showing that is the reason they are moving and not some other reason, like the weather? > California is already experiencing population decline as people run away from the taxes and crime. The most cited reason for leaving the state is the cost of housing. It should be noted that CA has lower property tax rates than Texas and Florida and about 23 other states, so that's not even part of the cost of housing equation.
        WalterBright 4y ago
        Here ya go: https://www.amgintrealty.com/why-new-yorkers-are-moving-to-florida/ https://www.amgintrealty.com/why-new-yorkers-are-moving-to-f... Note the #1 reason. > The most cited reason for leaving the state is the cost of housing. It should be noted that CA has lower property tax rates than Texas and Florida and about 23 other states, so that's not even part of the cost of housing equation. If the property tax rates are lower in CA, but the property is valued higher, then the total tax paid can be considerably higher than in other states. Ya gotta multiply the two to get a cost. Don't forget CA's income tax and sales tax, too. Oh, and the highest gas prices in the country, due to CA regulation and taxes.
    - jamiequint 4y ago
      Say $10m+ earners. If you're making that one-time and expect it to be a good chunk of your lifetime earnings it doesn't seem all that crazy to move in order to save $1.33m, or if Prop 30 passes then 1.51m. That's a free (very nice) house in most states. https://www.wealthspire.com/wp-content/uploads/2022/08/qsbs-state-map.png https://www.wealthspire.com/wp-content/uploads/2022/08/qsbs-...

jedberg 4y ago

That only applies to about the top 20 families in the state. The rest of the wealthy people like it here because of the weather and services the state provides as well as the strong markets. Keep in mind that VPs at FAANG make more than $2M a year (which is where this tax kicks in). A VP at Google could pick up and go to another state, and some have, but most of them like it here.

jamiequint 4y ago
Do you have any data to back up what you're saying, or is that entirely anecdotal? If that only applies to the top 20 families in the state then I seem to know at least half of them personally, which seems statistically unlikely. Regardless of whether wealthy people like CA because of the weather or services the state provides (although I can't think of a single wealthy person who cares about the services that California provides), there's a tradeoff between those things and cost. If you increase the marginal cost of living in California by 4.5% some people will leave. Particularly those folks like startup founders or early employees who expect to earn the bulk of their net worth on a single transaction that will be taxed at the top marginal rate.
- jedberg 4y ago
  It's not possible to provide data because you didn't define what "wealthy" means, and neither did I. The point is that you have to be ultra-wealthy for it to be worth picking up your whole family and moving to another state just for tax purposes.
  - WalterBright 4y ago
    The people decamping from New York City to Florida for tax reasons suggest otherwise. California is already experiencing population decline as people run away from the taxes and crime.
    - jedberg 4y ago
      > The people decamping from New York City to Florida for tax reasons suggest otherwise. Do you have any data showing that is the reason they are moving and not some other reason, like the weather? > California is already experiencing population decline as people run away from the taxes and crime. The most cited reason for leaving the state is the cost of housing. It should be noted that CA has lower property tax rates than Texas and Florida and about 23 other states, so that's not even part of the cost of housing equation.
      - WalterBright 4y ago
        Here ya go: https://www.amgintrealty.com/why-new-yorkers-are-moving-to-florida/ https://www.amgintrealty.com/why-new-yorkers-are-moving-to-f... Note the #1 reason. > The most cited reason for leaving the state is the cost of housing. It should be noted that CA has lower property tax rates than Texas and Florida and about 23 other states, so that's not even part of the cost of housing equation. If the property tax rates are lower in CA, but the property is valued higher, then the total tax paid can be considerably higher than in other states. Ya gotta multiply the two to get a cost. Don't forget CA's income tax and sales tax, too. Oh, and the highest gas prices in the country, due to CA regulation and taxes.
  - jamiequint 4y ago
    Say $10m+ earners. If you're making that one-time and expect it to be a good chunk of your lifetime earnings it doesn't seem all that crazy to move in order to save $1.33m, or if Prop 30 passes then 1.51m. That's a free (very nice) house in most states. https://www.wealthspire.com/wp-content/uploads/2022/08/qsbs-state-map.png https://www.wealthspire.com/wp-content/uploads/2022/08/qsbs-...