Rich People Leaving California for Mysterious Reason

Daniel Greenfield, a Shillman Journalism Fellow at the Freedom Center, is a New York writer focusing on radical Islam. He is completing a book on the international challenges America faces in the 21st century.


budget-jerry-brown-2014

It’s okay, the 1 percent only pays 41 percent of California’s income taxes. And half the state pays no income tax at all. No one will even notice they’re gone.

Prop. 30, approved by voters in November 2012, raised state income taxes retroactively to Jan. 1, 2012, on singles making more than $250,000 and married couples making $500,000. It raised rates by one, two or three percentage points through 2018, bringing the top rate on incomes above $1 million to 13.3 percent, the highest in the nation.

Bryan Goldberg, who founded the Bleacher Report sports website and sold it to Turner Broadcasting for about $200 million in mid-2012, is moving his primary residence from San Francisco to New York this year. A major reason, he says, is Prop. 30 and the way it was applied retroactively.

Lee Schneider, a hedge fund salesman who works from home, also cited Prop. 30 as the “deciding factor” for his move from Walnut Creek to Austin, Texas, in 2012. The California native had recently built a $2 million house at the foot of Mount Diablo and took a loss on the sale, but “I can make half of it back in one year of tax savings,” he says.

Schneider’s neighborhood in Texas, which has no state income tax, is full of cars with license-plate frames from California dealerships. On a flight from Austin to Los Angeles shortly before Christmas, 11 of the 12 seats in the emergency row were occupied by people who had moved from California to Texas, he says.

Gov. Jerry Brown’s budget proposal released last week estimates that Prop. 30 alone will generate $5.7 billion in additional income tax revenues in fiscal 2014-15. That represents 5.4 percent of total general fund revenue, projected at $106 billion.

The budget makes no allowance for migrating millionaires.

I’m sure it won’t be a problem. Governor Moonbeam is a financial whiz. California’s financial problems have been solved and it’s now free to spend, spend, spend.

The $155-billion budget proposal would increase general fund spending by more than 8%, to $106.8 billion.

“We’re putting $10 billion into the schools of California after years of drought and cutbacks and pink slips for teachers,” Brown said.

Brown defended a proposal in the budget to tap into the $850 million generated by new fees on polluters to help finance the troubled statewide high-speed rail project. Brown says the so-called bullet train will help California “pull together to form a greater community” and reduce greenhouse gases over time.

Sounds fantastic. How much will this cost?

Mr. Brown and his advisers have strongly affirmed their support for the planned $68 billion rail line

That’s gonna require a lot of fees on a lot of polluters. And a small army of inspectors to fine people for polluting to fund a bullet train that will fight pollution and then more money to cover the pensions of the inspectors…

Retirement benefits for public employees are underfunded by $218 billion, according to administration estimates, and the state has billions of dollars in other outstanding obligations and debts.

Brown on Thursday said there will be progress on teacher pension funds once people see the “disaster ahead.”

They did see the disaster ahead… and they voted for it.

Speaking of disasters ahead on the other side of the coast

Mayor Bloomberg warned that raising taxes on high earners could drive them from the city. “One percent of the households that file in this city pay something like 50% of the taxes,” explained the Mayor. “In the city, that’s something like 40,000 people.”

Fortunately Bloomberg was replaced by a sensible Communist who ran on a platform of banning plastic bags, taxing the rich and eating pizza with a fork.

But it’s not like William Wilhelm Jr aka Bill de Blasio inherits a city deep in debt and teetering on the edge of ruin.

New York City debt doubled under Bloomberg to $110 billion. The interest on that debt is at $6 billion. Three years of interest on New York City’s debt equals the debt that drove Detroit into bankruptcy court.

With $90 billion in unfunded pensions and more retired city workers, in some branches of public employment, than active workers, New York City’s total liabilities exceed its assets by $125 billion.

All we need now is a high speed train to San Francisco.

  • laura r

    people have been leaving california for 10ys. i read this in the NYTimes. they are moving back to the east coast where they are originally from. i dont remember the reasons.

  • antioli

    Don’t you all worry non about California son.ya hear?
    The tax payers of the entire country will soon be forced to bail out California.

    • Tim N

      To date California has been sending more money to the Federal government. than they have been getting back. Well- we shall see how all this plays out.

      • NAHALKIDES

        Even if that were true – which I doubt as it’s a standard Lefty talking point taken from dubious sources – it’s not relevant. The issue is the irresponsible State government of CA, which can’t possibly meet its future obligations. The rest of us, especially those in more Conservative states, are not going to pay taxes to bail out CA Democrats. Let the people who voted Democratic learn what that means – eventual and certain destruction, Detroit-style.

  • Robert Johnson

    I knew someone who just moved to Florida from California and their first year they saved 47,000 dollars off their taxes. Nice!

  • truebearing

    California is the ultimate proof that the utopia promised by Marxists is a massive lie. If they couldn’t do it there, where could they?

  • Well Done

    Increase taxes while announcing billions of dollars in NEW projects, never mind funding those already in place? Yup, that’s insane. You bet it is.

    • truebearing

      They’ll just get the money from the enemy…white people.

    • D_Smith2020

      Don’t forget the leftards are driving off businesses too. They just lost the $500 billion USD battery company investment. It’s going to Nevada. But we took in another million poor criminal immigrants so the leftards think that will balance it all out.

  • Drakken

    To semi quote Ole Ross Perot, do you hear that sound? That is the sound of wealth and business leaving and they will suffer for it.

    • D_Smith2020

      My whole family’s either already moved to other states or is planning on it when the grandparents kick the bucket here in a few years as they’re in their nineties. They are all middle class taxpayers who don’t want to pay CA taxes anymore.

  • TokyoTengu

    Amazing, like a vampire from a crypt, the high-speed train is back once again. How many times has this thing been killed and resurrected in the last 40 years? Too many, that’s for sure. Does anyone really think there is the slightest chance it will be built this time? Please! All that this is going to do is make a huge number of lawyers rich.

    Oh, what’s the use? California was stupid enough to elect Jerry Brown a third time, let them enjoy their insanity.

    • Tim N

      Brown was eminently beatable. The Republicans choked and ran Meg Whitman whose only qualification was that she could self finance her own campaign. The Republicans deserve some of the blame for being unable to field a solid candidate. (The same thing with Barbara Boxer- a beatable candidate vs …Carly Fiorina). There was nothing to energize the Republican base let alone woo the voters on the fence.

      • NAHALKIDES

        No Democrat is beatable by a reasonably Conservative Republican any more – CA is past the tipping point. There are so many takers (welfare recipients and government workers) that combined with the Lefty true-believers, they now have a permanent voting majority. Immigration also had a lot to do with this, as third-world peasants love welfare and big government, and couldn’t care less about ruinous taxes they won’t have to pay.

        Whitman and Fiorina weren’t the problem – a corrupted electorate was. Republicans can still win some seats in the legislature, but not enough to stop the Democrats. It’s time for we non-CA Conservatives to start thinking about how to approach the CA situation – after it collapses. Assuming we can keep Democrats from destroying the rest of the country.

  • Kimo

    –”It’s okay, the 1 percent only pays 41 percent of California’s income taxes. And half the state pays no income tax at all.”–

    The flip side of “income inequality” the Democrats never talk about.

  • A Z

    “Since politics is based on illusions, zazen definitely provides new insights for a politician. I then come back into the world of California and politics, with critical distance from some of my more comfortable assumptions.” – Jerry Brown”

    I don’t think he’s rethought a damn thing.

    If he studied calculus and economics instead of running off to study Zen, he might have learned to see the world differently.

    “When you are trained as a lawyer and that is the only tool in your toolbox, people look like nails.”

  • A Z

    If they were really concerned about CO2 and energy expenditure they would not be trying to go as fast as possible.

    “The force due to air resistance is proportional to the speed, and is applied in the direction opposite to motion.”

    - http://oregonstate.edu/instruct/mth252h/Bogley/w02/resist.html

    • Zach Smith

      Also, people get nervous at high speed and breathe harder, producing more CO₂.

    • A Z

      If they want to lower the speed limit of cars to 55 mph to save gas (chemical energy & now to lower CO2), the same concept would apply to a train.

      It is just another “box” you are trying to push through the air.

      https://www.youtube.com/watch?v=RvV3nn_de2k

  • tic…tic…BOOM

    The ones deserting “utopia” for tax friendly states are the same ones who voted for the democrats that created this mess. They take their liberal/progressive ideas and votes with them and then infect the new state. Soon they will have no where to hide.

    • ZZ

      100% true but good luck getting most people to listen. The tragic thing about CA is that the human locusts who are destroying it are mostly immigrants. They came to feed off its bounty and have been killing their host. Lefties from other states and Mexicans are responsible. They absolutely will move on to new hosts when it becomes a wasteland.

  • rubber stamp

    If we stop using Google, Facebook – we will suffocate California’s tax revenue by a significant amount )) . Use Bing as a search engine, they are based in Seattle WA (Microsoft Corp)

    • bhoilee

      dumba$$, how wil your Bung search engine effect Cali’s taxes since neither Google or FB pay any income tax to Ca? Nobody outside of Ca pays any sales tax to companies located there either! YOU ARE AN IDIOT!

  • Hard Little Machine

    The French tried this 3 years ago. The expected a huge windfall and then promptly forgot that Luxembourg and Switzerland are right next door resulting in an even bigger revenue gap.

    • carpe diem 36

      did the french finally run out of other people’s money?

  • carpe diem 36

    what if they gave a” bullet train ” and no one came???

    • carpe diem 36

      why does this comment require an edit?

  • carpe diem 36

    what if they gave a “Bullet Train” and no one came?

  • carpe diem 36

    why is it that the only comments need editing are mine?

  • Tahoebum

    We left the golden state last year and now live most of the year in Incline Village, Nevada. The retroactive Prop 30 was the last straw for us. Our state income tax savings more than pays for our monthly mortgage, property taxes, utilities, and food. The rich will soon be leaving California in droves.

  • California Refugee

    Oregon has a lot going for it. One place that many people over-look is the Coast of Oregon. Near Newport, which has excellent medical and other services including modern grocery stores, are small communities such as Otter Rock that are often over-looked. They’re wonderful places with essentially NO CRIME. In the 10 years I lived in Otter Rock there was ZERO reported crime. But online
    there aren’t statistics kept for some of these smaller towns. On the
    coast of Oregon you have to like weather and many people come there to
    storm watch, but the good thing is the storms don’t linger, they blow
    through. Often in the same day as a large storm we get sunshine in the
    afternoon, unlike Portland where it stays socked in for days. It’s a
    wonderful place with friendly people. No sales taxes! Veterans get a
    huge State income tax break as well as other breaks like with DMV fees! I
    could go on for pages. I really like Oregon.

    • behoilee

      oregon is great if you like ugly chicks with hairy underarms!

  • ditchdigger

    Producers are poluters. How far do we wan’t to go with this. Who would gain, those that set the rules. They could control the world.

  • Keep the change

    Liberals are pathetic fools

  • D_Smith2020

    Moonbeam, the La Raza legislature, and the two radical leftist Jewesses just raised the gas tax to the highest in the nation. They said it would prevent global warming. After I got off the ground from laughing until I literally cramped up, I realized it’s because anyone with real money is making plans to move.

  • David

    My wife and I are both professionals. We were forking over $1500/month in state income taxes and our rent was $1750/month. We moved to Texas. We own a condo (paying $1200/month) and no income taxes. I figure that by living in Texas, $24,000 every year goes to us instead of the state. Cannot figure who a professional still lives in California.