State taxes don't explain people leaving California
Dana P Goldman
Founding Director, USC Schaeffer Institute | University Professor of Public Policy, Pharmacy, and Economics | LinkedIn Top Voice
There were fireworks in the recent Fox News TV debate between Governors Ron DeSantis and Gavin Newsom . One particularly explosive issue involved California's high rates of taxation -- and there is not dodging it, we have some high taxes. But they are not the highest; that distinction belongs to New York. When you add up tax rates for income taxes, sales, property, and other sources -- as US News & World Report has done -- you find, on average, the highest and lowest taxed states look like this:
So where are Californians going? A lot go to Texas and Florida, of course, but those are very large states. What happens when you adjust for population size?
The researchers at USC Neighborhood Data for Social Change (NDSC) of the USC Lusk Center for Real Estate were kind enough to put together the following scatter plot (and all the charts you see here):
On the vertical axis is the tax rate, and you can see New York and Hawaii are outliers. On the horizontal axis is the rate of outmigration -- adjusted for the population of the destination state.
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If taxes were driving where people went, we would expect a downward-sloping line. In fact, the relationship is flat. The bottom line is that, on average, it does not appear that taxes are explaining the large outmigration from California.
This makes simple sense if you think about California's very progressive tax rates. Rates are among the highest in the nation for the wealthy. For the average California taxpayer, rates are still pretty modest.
So, neither Governor really got asked -- or answered -- the right question. Taxes do not explain average (or total) migration pattern. The real queston is whether the wealthiest taxpayers -- perhaps the 1% -- are leaving because of the highest marginal rates. California is surprisingly dependent on their income taxes for its revenues.
While we hear anecdotes about the rich leaving -- like Elon Musk -- a lot of wealthy people build companies in California, remain here, and pay their taxes. A full accounting of the migration patterns of the 1% is not yet clear.
Student at UCLA
11 个月Well May This Does As A Former Californian Business Owner here- Me and my family and I didn't leave CA. We were pushed out by failure of Ca government at every level Pushed out by over regulation. Read Google The List of Business that have Left CA Pushed out by over Taxation Exhaustion. City Sales Tax above %10 Pushed out by State, County and City Fees disguised as Taxes Push out by False Advertising of California Govt initiatives, Bills (Help the needy/Elderly Which Are going to pay for more Bureaucrats and their pensions) Push out by Multiple Bonds attached to property taxes. Which Are really Just Taxes Push out by High Energy Prices $6/gallon Premium Gas, Electricity $300+/mo 3 bedroom Apt/House. Push out by High Insurance Premiums (Home& Business) 50% Increase in the Last 3 Yrs Others 300% Increase Push out by Insecurity i.e. Rampant Crime Due To Lax Enforcement During Covid. Push out by Endless Man Person Hours Waiting In CA Atrocious Traffic In Big Cities
Building Community by Integrating People, Projects and Places
1 年Run the same analysis for states with the highest in-migration and chart correlation with tax policy?
Critical Thinking | Analytical Solutions
1 年Run that same correlation analysis with businesses leaving California and see what it reveals?
Basic Health Access
1 年The growth is not in rural populations in the 2621 counties stuck at 37 million or 75% of the rural population.. Growth in rural is seen where health care has the most lines of revenue and highest payments (Geisinger, Bassett, Marshfield) where recruitment and retention of the better employers is found as well as the best health plans (25% of rural). The growth is most specific to the red line urban portion of the 2621 counties which will likely quadruple from 1970 to 2070. Those there cannot leave and more are driven there from other locations. More for biggest and most concentrated with less for most Americans is a major theme of US health care and some other designs.
Basic Health Access
1 年California is not alone as counties lowest in health care workforce that are lower in cost of living and energy have added millions. Notice how health care design has added more lines of revenue and highest payments in counties top and higher in concentrations of workforce for 40 years. Cuts, losses of lines of revenue, and losses of hospitals and practices are seen for 40 years in the counties lower in workforce where growth is maximal in population numbers, demand, and complexity.