4 ms·

At the high end of moving out (rich people), California is unappealing because it's budgetfucked. Education, transportation, public services, and everything el

by seiji 14y ago

At the high end of moving out (rich people), California is unappealing because it's budgetfucked. Education, transportation, public services, and everything else will suffer for a long time. This leads to their crazy high state income tax and crazy high sales taxes and municipalities doing insane additional taxes for businesses on top of everything else. The Bay Area may be the best place to create Show Me Your Food 13.0, but I think you can build things elsewhere with nicer conditions.

thrownaway2424 14y ago
"In other words, the highest-income Californians were less likely to leave the state after the millionaire tax was passed." http://www.stanford.edu/group/scspi/_media/working_papers/Varner-Young_Millionaire_Migration_in_CA.pdf http://www.stanford.edu/group/scspi/_media/working_papers/Va... By the way, the reason the state is "budgetfucked" as you eloquently put it is because of low taxes, not high taxes. You may be interested in reading about Proposition 13, a scheme under which people who are sitting on massively valuable assets are taxed at lower rates than those who actively acquire and dispose of much less valuable assets, and where assets held by corporations are taxed static amounts (in terms of absolute magnitude, not rates) in perpetuity.
- seiji 14y ago
  Quite true. Prop 13 is an abomination. Instead of only homeowners paying reasonable real estate tax, they've essentially made everybody in california subsidize low-tax-locked real estate owners. Now you get to have the fun of paying virtual real estate tax without owning property. It turns out, we have the ability to not live there! It's not quite sane to take a multimillion dollar exit in California when Seattle has zero additional overhead. Though, it is an absolute dickhead move to build your company in California then "establish residency" in a zero-income/capital gains tax state solely to avoid California tax harassment.
  - bcoates 14y ago
    It's California's stupid fault for picking that tax system. It's not like residence-based income taxes were decreed by God as the only way to fund a government.
    - 001sky 14y ago
      residence based taxation is a stealth wealth tax. us is illegal wealth tax directly. problem was in 1970s, people bought 10k house on 3k/ye wages. 10 yes later, it was million dollar house. 3k/wages cannot pay taxes on million dollar house. so that is why they passed such a law. otherwise, people would have all had to sell house for capital gains and move out of california in 1970s. This is not justifying system, but explaining how these thnings come about. Again, it has to do with people not being able to afford the either the real-estate (at market values) or the taxes based on their incomes. taxes just second order effect though.
      - thrownaway2424 14y ago
        You will have to excuse me if I don't sympathize with the taxation problems of people who are sitting on unrealized million-dollar capital gains.
        001sky 14y ago
        The politicians were showing sympathy with the grandma on social security liing in her house she bough in 1940 with no plumbing, etc. It was not her fault NASA moved in next door to send men to the moon, etc. That, at least was the context. I don't have sympathy for entitled people either, particulalrly those we are talking about who "developed" and paved over CA with freeways. But before them was a genration of home-steaders, who had no income because they were modest people. They took a lot more risk and invested a lot of sweat equity to make CA a better plave to libe, so perhaps worth showing them some respect...etc. or not YMMV.
  - prostoalex 14y ago
    >>> they've essentially made everybody in california subsidize low-tax-locked real estate That's not true - your tax base is set at the time of the purchase. And California real estate market is quite vibrant compared to other states.
- prostoalex 14y ago
  People refer to Prop 13 as if it's going to be the budget-savior, but don't forget that property taxes are distributed to municipalities (counties and cities), so if Prop 13 was dropped, wealthy cities would get even more revenues, while ghettos would remain the same, as there's more turnover at low-end of the real estate market (so constant reassessment of property values that more or less follows the boom and bust cycle). City of Mountain View ran at a profit for a few years, from what I recall, so having more money from Google might result in couple of additional parks or extra lanes on Shoreline, but not going to be the game changer for South Central LA.
- tsotha 14y ago
  >By the way, the reason the state is "budgetfucked" as you eloquently put it is because of low taxes, not high taxes. This is utter nonsense. California has both a high income tax and a high sales tax, and while property tax rates are low, property prices are high. Where I live you can pay seven figures for a tract home. Tax receipts in the state are quite healthy - the problem is on the spending side, specifically a large and grossly overpaid bureaucracy.
  - thrownaway2424 14y ago
    24 states spend more per capita than does California, so I think your argument fails on the facts.
    - tsotha 14y ago
      Where are you getting that? It's hard to believe, given that California has the 4th highest per capita tax burden: http://www.usatoday.com/story/money/personalfinance/2012/10/28/state-taxes-states-highest-lowest/1654071/ http://www.usatoday.com/story/money/personalfinance/2012/10/...
      - thrownaway2424 14y ago
        http://www.nasbo.org/sites/default/files/State%20Expenditure%20Report_1.pdf http://www.nasbo.org/sites/default/files/State%20Expenditure... See page 7 for the spending amounts. I don't see how tax revenues as a fraction of income (your link) has anything to do with spending per capita.
        tsotha 14y ago
        Where is the ranking in per capita expenditures? I don't see it?

by seiji 14y ago

thrownaway2424 14y ago

"In other words, the highest-income Californians were less likely to leave the state after the millionaire tax was passed." http://www.stanford.edu/group/scspi/_media/working_papers/Varner-Young_Millionaire_Migration_in_CA.pdf http://www.stanford.edu/group/scspi/_media/working_papers/Va... By the way, the reason the state is "budgetfucked" as you eloquently put it is because of low taxes, not high taxes. You may be interested in reading about Proposition 13, a scheme under which people who are sitting on massively valuable assets are taxed at lower rates than those who actively acquire and dispose of much less valuable assets, and where assets held by corporations are taxed static amounts (in terms of absolute magnitude, not rates) in perpetuity.

seiji 14y ago
Quite true. Prop 13 is an abomination. Instead of only homeowners paying reasonable real estate tax, they've essentially made everybody in california subsidize low-tax-locked real estate owners. Now you get to have the fun of paying virtual real estate tax without owning property. It turns out, we have the ability to not live there! It's not quite sane to take a multimillion dollar exit in California when Seattle has zero additional overhead. Though, it is an absolute dickhead move to build your company in California then "establish residency" in a zero-income/capital gains tax state solely to avoid California tax harassment.
- bcoates 14y ago
  It's California's stupid fault for picking that tax system. It's not like residence-based income taxes were decreed by God as the only way to fund a government.
  - 001sky 14y ago
    residence based taxation is a stealth wealth tax. us is illegal wealth tax directly. problem was in 1970s, people bought 10k house on 3k/ye wages. 10 yes later, it was million dollar house. 3k/wages cannot pay taxes on million dollar house. so that is why they passed such a law. otherwise, people would have all had to sell house for capital gains and move out of california in 1970s. This is not justifying system, but explaining how these thnings come about. Again, it has to do with people not being able to afford the either the real-estate (at market values) or the taxes based on their incomes. taxes just second order effect though.
    - thrownaway2424 14y ago
      You will have to excuse me if I don't sympathize with the taxation problems of people who are sitting on unrealized million-dollar capital gains.
      - 001sky 14y ago
        The politicians were showing sympathy with the grandma on social security liing in her house she bough in 1940 with no plumbing, etc. It was not her fault NASA moved in next door to send men to the moon, etc. That, at least was the context. I don't have sympathy for entitled people either, particulalrly those we are talking about who "developed" and paved over CA with freeways. But before them was a genration of home-steaders, who had no income because they were modest people. They took a lot more risk and invested a lot of sweat equity to make CA a better plave to libe, so perhaps worth showing them some respect...etc. or not YMMV.
- prostoalex 14y ago
  >>> they've essentially made everybody in california subsidize low-tax-locked real estate That's not true - your tax base is set at the time of the purchase. And California real estate market is quite vibrant compared to other states.
prostoalex 14y ago
People refer to Prop 13 as if it's going to be the budget-savior, but don't forget that property taxes are distributed to municipalities (counties and cities), so if Prop 13 was dropped, wealthy cities would get even more revenues, while ghettos would remain the same, as there's more turnover at low-end of the real estate market (so constant reassessment of property values that more or less follows the boom and bust cycle). City of Mountain View ran at a profit for a few years, from what I recall, so having more money from Google might result in couple of additional parks or extra lanes on Shoreline, but not going to be the game changer for South Central LA.
tsotha 14y ago
>By the way, the reason the state is "budgetfucked" as you eloquently put it is because of low taxes, not high taxes. This is utter nonsense. California has both a high income tax and a high sales tax, and while property tax rates are low, property prices are high. Where I live you can pay seven figures for a tract home. Tax receipts in the state are quite healthy - the problem is on the spending side, specifically a large and grossly overpaid bureaucracy.
- thrownaway2424 14y ago
  24 states spend more per capita than does California, so I think your argument fails on the facts.
  - tsotha 14y ago
    Where are you getting that? It's hard to believe, given that California has the 4th highest per capita tax burden: http://www.usatoday.com/story/money/personalfinance/2012/10/28/state-taxes-states-highest-lowest/1654071/ http://www.usatoday.com/story/money/personalfinance/2012/10/...
    - thrownaway2424 14y ago
      http://www.nasbo.org/sites/default/files/State%20Expenditure%20Report_1.pdf http://www.nasbo.org/sites/default/files/State%20Expenditure... See page 7 for the spending amounts. I don't see how tax revenues as a fraction of income (your link) has anything to do with spending per capita.
      - tsotha 14y ago
        Where is the ranking in per capita expenditures? I don't see it?