
High taxes be damned, the rich keep moving to California - spking
https://www.latimes.com/politics/la-pol-sac-skelton-income-tax-california-wealthy-20190311-story.html
======
alkibiades
It defines rich as 125k. That definitely isn't rich in california. It also
says there's a net migration outwards and that the middle class and poor are
fleeing.

~~~
bthornbury
Might be able to afford an apartment

~~~
m0zg
With a 2hr commute.

~~~
lsc
meh, if you don't have kids, $125K is plenty to live in a so so part of
sunnyvale or mountain view (which is totally safe, just your apartment will be
built in the '60s to working class standards, which isn't as bad as it sounds;
the weather here means that having flimsy and poorly-insulated housing isn't
as big of a deal as it would be otherwise.)

I mean, you won't be buying right now, but you will be able to save money; if
we have another big drop in housing prices, you will be all set: otherwise,
you will just have to move when you retire. (which actually is pretty sad,
'cause those social connections are really important. but just saying, if you
have $125K/yr, two people can live here comfortably.)

If it's really important that you have a lot of room, you aren't going to like
it here. Really, I think that's the big difference.

My own impression is that as a sysadmin without a degree, I get like 2x here
what i would other places, and yeah, housing is more than 2x, but... housing
is a kinda small part of my budget. I save a lot more working here, and have
access to a lot more luxuries that don't involve personal space.

Honestly, if you wanted to get me to move? Probably the best thing you could
promise me is a job with an office... or even just the sort of large cubicle
my job role rated in the mid to late aughts. I mean, my job pays really well,
the food is good and people are nice to me, and I really appreciate it, but it
seems like every year my desk shrinks. I think the parking spot they reserve
for the car I don't use is allocated more space than the desk where I sit all
day.

~~~
m0zg
>> if you don't have kids

Most adults do have kids, though. It's unreasonable to expect that one will
not have kids, seeing how we're all here because our parents were in a
position to have kids. So I chose to live elsewhere instead.

~~~
hellisothers
I support your ability to choose but so much of the commentary here is to the
effect of “nobody should live in CA, living in CA is impossible, nobody wants
to live in CA in fact everybody is leaving!” I’ve even seen a post say it’s
negligent to consider raising kids in CA or the Bay Area. We’ve lived in the
Bay Area 18 years, we have a kid and a house and save money, it took us 15
years to get to this point, if you want to just show up and have it all then
maybe choose slewhere but crapping in living in CA or the Bay Area is getting
tired

------
foxyv
You have to be rich to live in California. Either that or willing to sacrifice
your retirement, because saving money is nearly impossible for lower and
middle class Californians. There are too many costs that come with living and
working there.

~~~
zerr
Do you mean the Bay Area only or the whole state?

~~~
HNLurker2
And immigrants have no chance?

------
gamechangr
This has been posted a few times today...

[https://news.ycombinator.com/item?id=19359510](https://news.ycombinator.com/item?id=19359510)

~~~
dang
On HN, we don't count submissions as dupes if the story hasn't had significant
attention yet. This is in the FAQ:
[https://news.ycombinator.com/newsfaq.html](https://news.ycombinator.com/newsfaq.html).

The idea is to give good stories multiple chances at attention, since
otherwise the randomness in what makes it off /newest is too great.

------
neonate
[https://outline.com/sdH9NZ](https://outline.com/sdH9NZ)

------
snazzycalynx
First off, making $110k a year does not make you rich. Secondly, the article
does not address the rich that live in California but make their money outside
of California. Many truly rich people buy homes in California even though they
have a "primary residence" outside of California.

------
squozzer
>In fact, more wealthy people are moving to California than leaving, research
indicates. It’s the poor and middle class who are departing.

The LA Times must be so proud.

And who will provide all the services that the sophisticated rich demand?

------
gnicholas
Once tax day has come and the full force of the capped SALT deduction is felt,
things may change.

A high-earning couple with $500k in combined income (roughly $45k in state
taxes) and a $2m home (roughly $20k in local taxes) will go from a $65k
deduction to a $10k deduction.

~~~
esf
Am half of a high earning couple in a bit above this range in California.
Surprisingly, my taxes changed very little this year. In years prior, I always
had to pay AMT, in which SALT deductions were already disallowed. The new tax
law is basically a wash. I don't pay AMT, just pay higher regular. I didn't
check exactly but my effective rate this year may even have gone down a
little. Many people in this income range will find similar.

~~~
gnicholas
Interesting to hear this. I used to be a high-earner (was a tax lawyer before
a startup founder) in CA and never ran into the AMT. I see several folks
mention the AMT below, but if no one was getting a SALT benefit before, how
could the cap have been a revenue-raiser (which it was scored as) in the tax
bill?

I realize that the lower rates help out high earners and can mitigate the
effect of the SALT cap. But all high earners across the country get the
benefit of low rates, whereas only the ones in high tax states get hit with
the cap. So when weighing the choice between being a relatively high earners
in a low tax state or a super high earners in a high tax state, the balance
shifts toward the low tax state.

~~~
esf
It's a revenue raiser because it does raise the taxes of people outside this
range. Primarily people in 500k - 1m range were hitting AMT before, especially
if married or with children.

Don't misunderstand me: I am responding only to the parent comment that the
new tax law will massively change things for a 500k couple due to deductions.
For that specific range for a married couple it won't (because they likely
already were paying higher taxes due to AMT).

To your second point, that's also highly individual. My household income is
~800k. That makes my California effective tax rate 8.9%. I personally would
have a hard time finding jobs for both my husband and myself in a new state
taking only an 8.9% pay cut.

The phenomenon discussed in the article of continuing net inflow of high
earners to California and out flow of middle and lower earners is not new:
[https://www.sacbee.com/news/state/california/article13647809...](https://www.sacbee.com/news/state/california/article136478098.html)

I am not saying this is good! But the simplistic "everyone is fleeing high CA
taxes" narrative is not supported by the data. What is happening is not good
for California but also more complicated than that.

I would say the burden of high housing costs absolutely dwarfs the effect of
taxes for most people.

------
heavyset_go
It's almost as if one of the benefits of being rich is that you don't have to
worry about things like how much taxes cost. Yes, this can be interpreted in
more than one way.

~~~
Gibbon1
My take is for truly wealthy people, there is where you live for tax purposes
and where you spend your time. Those people usually also have a lot of control
how they register their income. And so being wealthy really just means that
paying more or less taxes is a discretionary expense. Like a lot of other
discretionary life style expenses they pay.

Two examples I know of. One guy who had a $200,000 RV parked in a warehouse in
SF. With his office upstairs. But he didn't 'live there'. And another whose
llc owns a condo by the Marina. That guy doesn't 'live there' either. Both
those guys probably paying $100k/year for 'convenience'

Things change radically when you where you live for tax purposes and where you
spend your time are the same place. And you can't decide how you are paid.
Some friends of mine, high paid working for a fortune 500 wanted to relocate
them to Waco Texas. $200k goes a lot farther in Waco TX. And yeah fuck no.

------
edoo
If you actually qualify as "rich" that means you have multiple estates and
your primary residence is surely not in the pirate tax cove of CA.

------
coldtea
Why would the rich care about taxes? They have thousands of loopholes at their
disposal to avoid them. It's all an "expense" to them...

------
xacaxulu
Yes, they keep having their estates and legal residences in Florida, Texas,
etc.

~~~
gnicholas
Maintaining residency outside of CA/NY/etc. isn’t as simple as pretending that
a home in Texas is your primary residence. These states go after high earners
and audit the number of days in/out of state, as well as drivers license, and
even the location of pets. When there’s lots of tax revenue on the line, they
dig up the details. Source: used to be a tax lawyer.

------
m0zg
People who can hire accountants who can bring down their tax rates to below
those of their secretaries are moving to California. News at 11.

------
mario0b1
>highest-in-the-nation 13.3% income tax rate

That sounds very comfortable and affordable

~~~
fromthestart
That's state tax, which is paid in addition to federal (nationwide) tax. Some
states, like Texas, have no state income tax.

~~~
carlivar
And the states without income tax usually make it up somewhere. I believe with
Texas it means higher property taxes (California's are quite strictly limited
thanks to the notorious Prop 13).

~~~
rch
Texas also gets 36% of its tax revenue from sales tax:

[https://taxfoundation.org/sales-taxes-percent-
collections/](https://taxfoundation.org/sales-taxes-percent-collections/)

