Posted on 01/18/2018 6:35:38 PM PST by Beave Meister
The Republican-backed federal tax bill flipped the tables on a never-ending question for California politicians: Will high taxes lead the state’s wealthiest residents to flee the Golden State for the comparable tax havens of Florida, Nevada and Texas?
Republicans reliably raise that alarm when Democrats advocate for tax increases, like the 2012 and 2016 ballot initiatives that levied a new income tax on very high-earning residents.
But now, with the federal tax bill cutting off deductions that benefited well-off Californians, the state’s Democrats suddenly are singing the GOP song about a potential millionaire exodus.
“People with higher incomes pay a lot more money, and some of them may be tempted to leave,” Gov. Jerry Brown said when he unveiled his 2018-19 budget proposal last week. “This was an assault by the Republicans in Congress against California.”
That fear animates Senate President pro tem Kevin de León’s bill that would allow California residents to write off their state taxes on their federal returns as a charitable deduction, as well as other proposals that Assembly leaders have hinted they’re preparing to offer. De Leon’s bill cleared a second committee this week and is on its way to a vote on the Senate floor. Trump administration officials say it won’t pass muster with the IRS.
Democratic state lawmakers are worried because California relies so heavily on the income taxes it collects from high earners to fund government services. The state’s wealthiest 1 percent, for instance, pay 48 percent of its income tax, and the departure of just a few families could lead to a noticeable hit to state general fund revenue.
(Excerpt) Read more at sacbee.com ...
Gas is hire in reno
In the long game, this will end up being a good thing for the taxpayers of California. It’s going to be painful though. Feet to the fire you (Cali legislators) leftist scum!
Why? Are they afraid that millions of Hispanics and Asians will start voting for Republicans?
LOL!
That’ll be the day!
I thought California Democrats would be ecstatic.
Is this not the final step in every Leftist revolution?
The wealthy and most productive citizens flee, followed by the imposition of a police state to control every thought and action of the feckless drones who are left behind.
Step 2: Replace them with "takers?.
Recipe for success.
And if you get something of value from your "charitable" contribution, like football tickets for a contribution to a college then it doesn't count as a charitable contribution. So if you get a state tax credit for the entire amount of the contribution it isn't a charity so no deduction for you.
Maybe California could just build a wall to keep rich people in.
How is NA (cuz NC is already taken), how is NA gonna be able to pay for all their crap? Increased taxes on the rich? Oops!
It will serve to force these politicians to rethink their positions on taxes and social welfare policies. Like I said, it will be a painful lesson.
Build The Wall!
...to keep them in...
Beat me to it.
Great minds thinking alike... ;)
And they want to tax Space launches (Mojave airport, and Vandenburg).
hire, or higher????
With the far cheaper cost of living in Texas, the wealthy Californians can take a lot of vacations to California and still be way ahead.
Your pick
Lots of us here in AZ, to the dismay of many Arizonans
Or follow the lead of the their pals and build their own wall to keep its people in.
at the state property tax rate say 1.18% of purchase price the property tax used to be totally deductible.
If you stay in your 20 million Every Hills mansion it still is totally deductible. But if you move up to Beverly hills and buy 20 million then about 23,000 is the tax and only 10,000 is deductible. So no break on the 13,000 additionally. If your tax rate is 37% you pay federal on the 4500 or so.
There are 9 figure estates in california so you can do the math on say 100 million.
This is the difference for wealthy people. 10,000 in property tax is abut a 850,000 home here.
I see a slight impact on the high end market. If you watch Million Dollar Realtors on H>V those are the agents who may have slight downturn in business.
If you have a few billion it probably doesn’t matter much.
They have been for years. Look at Colorado.
Exit tax....make it to expensive to leave.
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