Are millionaires really leaving the state?

Oct. 13, 2012

By John Seiler

In the debate over the Proposition 30 and Proposition 38 tax increases, the question comes up: Will such tax increases drive millionaires from California?

The liberal-oriented California Budget Project just teased us with an email:

“In the debate around the revenue-raising measures on the November ballot, including Proposition 30, a persistent ‘urban legend’ has resurfaced: that increasing taxes on the wealthy would cause them to leave California. However, new research on the migration patterns of California’s personal income taxpayers could help put this claim to rest. 

“On Monday, October 22, from noon to 1:30 p.m., Charles Varner, doctoral candidate at Princeton University, and Cristobal Young, Ph.D., assistant professor of sociology at Stanford University, will discuss their new study that looked at Proposition 63’s ‘millionaire’s tax’ and found no evidence that millionaires left California in order to avoid the higher tax. Varner and Young will discuss their findings in a presentation titled Flight of the Millionaires?: Experiments in Taxing High Incomes in New Jersey and California, at an event hosted by the University of California Center Sacramento. For additional details, read the event flyer.”

I guess we know which way the study will look at this “urban legend” then “put it to rest”!

Except I personally know wealthy people who have left this state because of its high taxes. And Joseph Vranich used to tally the large number of companies leaving the state. Comcast and Campbell’s just relocated hundreds of jobs out of the state.

It will be interesting to see the study’s take on Prop. 63. It took effect in 2005, right in the middle of the real-estate boom. A lot of rich folks might have figured, “I hate this tax. But I’m making so much money off real estate, it’s worth it to stay.”

Then real estate crashed, of course, in 2007-09.

I’ll be looking at what years the study covers.

By the way, if raising taxes on millionaires doesn’t drive them out of the state, then why stop at raising California’s top state income tax rate at 13.3 percent, as Prop. 30 does? Why not raise it to 20 percent? How about 40 percent?

 

 

 

21 comments

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  1. Roger H.
    Roger H. 13 October, 2012, 10:27

    One other reason to be suspicious of the study’s applicability is Prop. 30’s definition of “millionaire,” which apparently means individuals making at least $250k incomes.

    Reply this comment
  2. Tax Target
    Tax Target 13 October, 2012, 10:31

    This “Millionaire”, who is not a millionaire, will be leaving Kalifornsky if the tax propositions pass. For the liberal uninformed here is what Kalifornsky is facing: There will be the filthy rich and the filthy poor in Kalifornsky – those who work for a living will leave for greener pastures, including my wife and I. The libtard elites can say what they want about who is and who isn’t leaving the gulag but those of us who work hard and want to hold onto OUR earnings are going elsewhere. Count on it… Oh and professors be sure to up your frequency count by 2 on your statistics since no one has asked me and my wife to participate in your studies….

    Reply this comment
  3. Douglas
    Douglas 13 October, 2012, 11:13

    Reductio ad absurdum

    If reducing the tax rate increases total tax revenues,why don’t we reduce the tax rate on millionaires to 1%?

    (including all those state retiree “millionaires”, of course)

    Reply this comment
  4. us citizen
    us citizen 13 October, 2012, 11:50

    Also what about the middle income people? Its not just the millionaires. They get hit with more sales tax also. That new car is now going to cost them more. So is that new kitchen or pool or whatever. This state has the highest tax rate in the union. And is 47th in education. What does that tell you? It says that throwing more money at schools is not helping. Besides prop 30 doesn’t guarantee that money goes to the schools no matter what those commercials are saying.

    Tax Target is right. There will be the millionaires and the poor and the illegals. And quite frankly I’m tired of paying for the latter two.

    I’m a native from here. These schools are out of control compared to the past. You really think I want my money going to a system that can’t keep drugs under control or gangs? Or guns and knives? What the hell happened? You can give condoms to kids but not an aspirin? You can’t wear a US flag T-shirt because you might offend someone else. The class is held back because of a few who cant keep up, instead of holding them back a grade?

    Oh that’s right. You have to bring everyone down to stupid level and then wonder why SAT’s are so low.

    Its time to cut the crap. Go back to reading, writing and arithmetic. You flunk, you do a do over. You get grades and not passes. You keep competition up so everyone tries. You put all subjects back in school to give a rounded education. You enforce discipline. If a teacher stinks, you fire them. You cut these ridiculous pensions, administrative fees, and high salaries for 9 months worth of work a year. You get these kids back into respect mode and stop with all the political correctness garbage.

    Then you tell the university professors, that until they run their own business, they don’t know what the hell they are talking about. Because people will leave when they have had it!

    Reply this comment
  5. kkong
    kkong 13 October, 2012, 11:52

    I’ll be leaving this sh*thole as soon as I retire. I’ll be taking my six-figure annual retirement income with me to keep it out of reach of whatever dim-o-crap is in control of redistributing funds to the illegals and the lazy.

    Reply this comment
  6. Douglas
    Douglas 13 October, 2012, 12:50

    “This state has the highest tax rate in the union.”

    Please recognize the difference between tax “rate” and “effective” tax.

    My marginal California income tax rate is 8%, but my total state tax was about 2% of gross income.

    In sales tax, California is the fifteenth highest state per capita.

    In TOTAL state and local taxes paid (income, sales, property, etc.), California is the eleventh highest state in taxes as a percent of income.

    Reply this comment
  7. Ulysses Uhaul
    Ulysses Uhaul 13 October, 2012, 13:30

    Love these moving articles…good for business.

    PACK AND SHIP!

    Reply this comment
  8. Patriotic American
    Patriotic American 13 October, 2012, 13:31

    Dogulas, You absolutely “Must” be a Democrat.
    You seem to have no difficulty in presenting false narratives about California’s Tax situation, and doing so, as if you are not spinning the true facts.
    Well done!
    You could be President!

    Reply this comment
  9. Hondo
    Hondo 13 October, 2012, 14:06

    Maybe not so many millionaires will be leaving the state. Most of their mansions are under water too, too much to walk away from. But Kalifornia isn’t attracting many more. Who would want to come to this state of disaster.
    And they aren’t making many more either, except for the public union millionaires.
    Hondo……

    Reply this comment
  10. Rex the Wonder Dog!
    Rex the Wonder Dog! 13 October, 2012, 14:25

    My marginal California income tax rate is 8%, but my total state tax was about 2% of gross income.
    ===
    Well, there you go again Dougie, the total tax you pay will vary depending on deductions, but that is the same in every state. CA has the highest state income tax in the nation.

    In sales tax, California is the fifteenth highest state per capita.
    ====
    LOL…here we go again, Dougie just can’t compute the meaning of tax rate. CA has the HIGHEST sales tax in the nation. In some parts of CAttle sales tax is 10.5% right now. “Per capita” sales tax means absolutely NOTHING. The PER CAPITA sales tax in CA is over 10% in some parts, it is the highest in the nation.

    What Dougie is TRYING to state but does not have the brain power to, is that CA has a lower overall tax rate despite the highest sales tax, but that is just a flat out whopper lie. Sorry Dougie.

    Dougie is like so many public trough feeders, when they cannot argue the facts they try to change them by using some ridiculous, and nearly always wrong, alternative measurement. The CTA does this with education everyday-claiming CA ranks 47th in the nation on ED spending when it is ranked 25th, and when BOND issues are added in it ranks #1 with over $30K per STUDENT.

    Reply this comment
  11. Ulysses Uhaul
    Ulysses Uhaul 13 October, 2012, 17:06

    Poodle stop blasting new posters…your irksome and rude. Deplorable.

    Doughie is at the table with discourse. You’re at Taco Bell with Big Betty!

    Reply this comment
  12. Claude Slagenhop
    Claude Slagenhop 13 October, 2012, 20:01

    I agree. We should reduce taxes on millionares to 1% (or 0% like several other states). Every dollar that a millionaire has goes into investment, is spent, or employs someone. The question is- is it better to pad public employee union pensions or leave the money with the millionaires. I choose the later as this will lead to more jobs for the folks.

    Reply this comment
  13. CalWatchdog
    CalWatchdog Author 14 October, 2012, 08:42

    Remember Gov. Jerry Brown’s definition of a millionaire: if you make $250,000 for four years, you’re a millionaire.

    Katy

    Reply this comment
  14. Bob
    Bob 14 October, 2012, 10:08

    Well, I just got the Cauli(as Ahnode sez)phony Official Voter Information Guide and in there it says that at $48k where the current 9.3% marginal tax rate kicks in the new marginal tax rate will be 10.9% if Molly Mongrel’s tax increase passes!

    An 11% marginal income tax rate at under $50k???? Geez, what in the world is Molly Mongrel thinking? Even the Brown stain, Darrell Stinkbug and Johnny Perez wouldn’t try that, at least not until they get their two-thirds majority in the legislature.

    Reply this comment
  15. Rex the Wonder Dog!
    Rex the Wonder Dog! 14 October, 2012, 13:58

    Remember Gov. Jerry Brown’s definition of a millionaire: if you make $250,000 for four years, you’re a millionaire.

    Katy
    ==

    Hhahaha…that gave me a good chuckle!

    Reply this comment
  16. American
    American 14 October, 2012, 15:07

    I don’t think our politicians really care. They figure that if all the taxpayers in the private sector leave, the illegal aliens and their dropout gangster anchors will pick up the slack. Seriously, they really believe that.

    Reply this comment
  17. Bob
    Bob 14 October, 2012, 15:08

    With a 9.3 marginal income tax rate that kicks in at around $48k (and that rate would increase to nearly 11% if Molly Mugger’s income tax increase goes through) forget about millionaires leaving the state.

    That’s more than millionaires in other states pay.

    The middle and even lower certainly have an incentive to leave Cauliphony if their jobs permit it.

    Reply this comment
  18. Ulysses Uhaul
    Ulysses Uhaul 14 October, 2012, 16:41

    Who will pay?

    Reply this comment
  19. Barb
    Barb 14 October, 2012, 17:14

    When you read articles like the following, you wonder how in the world any voter can contemplate voting any tax increase:

    http://www.dailynews.com/california/ci_21767772/californias-retiring-state-workers-cash-vacation-big-bucks

    So I guess we’re all supposed to just lay down and take it while the state workers make out like bandits! Yeah, that works for me (sarc)! And they want more? The Teachers want more! The politician wants more! The poor want more! At which point do you NO!

    No, instead of focusing so much on tax increases the narrative needs to change to Government Reform. Let’s see reform you say, what does that mean? It’s time to cut the waste, the fat, and the state worker unions! It’s time to break up the monopoly the Democrats have on the state so that we can return to fiscal responsibility.

    Some how I believe the people of CA are beginning to come to their senses!

    November 6 can’t come soon enough!

    Reply this comment
  20. Bob
    Bob 14 October, 2012, 20:34

    Sorry, Barb. I got half way through and couldn’t read any more.

    I am so sick of reading this kind of [email protected] and then hearing our rulers insist we must pay more, more, more!

    God forbid those DemoNcrats get two-thirds majority. Molly Mugger wants an 11% margninal income tax rate on people making less than $50k a year.

    And guess what, Barb? When those DemoNcrats get their two-thirds majority you will look back on these days as the good old days. At least now the DemoNcrats have to have these ballot measures to get most of their tax increases.

    You can bet that when the DemoNcrats have two-thirds of the seats in the legislature it will be Katy (Grimes) bar the door!

    Reply this comment
  21. Rex the Wonder Dog!
    Rex the Wonder Dog! 15 October, 2012, 23:32

    Watching an anti-30 Munger as right now…I LOVE EM!!!!!!!!!! 😉

    Reply this comment

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