By increasing it's maximum tax rate, California is driving out it's most productive - therefore wealthiest - citizens.
According to a new report from the Golden State’s Franchise Tax Board, the top 1% of earners paid $25.7 billion in state income taxes in 2007. Two years later, the most recent for which data are available, that figure dropped by half — to $12.3 billion.Of course this is nothing new. The genuises running the state have known this for years. Over three quarters of a million taxpayers have fled the state since 1992, taking their skills, their jobs,their wealth with them to less greedy states that respect their work ethic.
Researchers note that the economic downturn contributed to this drop. But that’s not the only cause. A huge number of high-income taxpayers have simply left the state.
Between 1992 and 2008, California suffered a net loss of 869,000 tax filers. About 3.5 million moved into California, while 4.4 million left.
Those that left were disproportionately wealthy. The average adjusted gross income for people leaving the state over that period was $44,700. Meanwhile, the average person moving into California posted income of just $38,600.
The mass migration of top earners has seriously damaged the Golden State's tax revenues. Ratcheting up rates might provide an influx of cash in the short term. But over time it will drive out payers and shrink the tax base.
Indeed, California lost a stunning $44 billion in tax revenue from the 869,000 taxpayers that left the state between 1992 and 2008. And that figure is probably too small. It only counts earnings for one year — the difference between paying state taxes one year and not paying them the next year, after the payer moved.
3 comments:
This is how it is, not only supposed to but, must happen. Much like the child who eats all his candy on Halloween. He gets a tummy ache and has no candy later. I merely hope they continue so as not to become a shadow government. The state needs a complete collapse in order to begin recovery. That IS my well wish for Cali. Sadly.
For those who choose not to move off the tracks, when they see the train far away and have heard it's clarion call for even longer. That's a stubborn contrarian-to-logic choice. MOVE!
Doom - California's politicians are too busy pandering to special interests to take care of real business. The entire State suffers for this.
There should be a nationwide limitation of just two terms for all politicians - federal, state and local.
I used to miss the point on term limitations. I always thought it was too timid and mild. Well, I still do, I would change a few things to that limitation.
I would add that the limits include going from one elected job to another, say, senator for two terms, then on to congressman, at any level, save perhaps running for president). Simply... eliminate lifelong politician's current scam for life.
I'm not sure what to do with judges, perhaps limits there, even on the supremes, with an easier recall ability on any/all of them. Not sure on that, I know the arguments about judges, and see some points, but with so many activist judges, I shudder.
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