THE PROBLEM CALIFORNIA FACES:
With an average “SALT” bill of $18,438 in 2015, the ability to deduct all SALT payments saved the average Californian about $4,000 in federal taxes. But implementation of the TCJA for the 2018 tax year is expected to cost the average Californian $1,800.
According to the Cleveland Federal Reserve Bank, the resulting higher tax payments will also have a negative wealth effect of about 7.9 percent on California home values.
A Sacramento Bee study based on U.S. Census data found that about 130,000 more residents left California than arrived from other states in 2017.
The Newsom administration is afraid the combination of higher effective federal tax rates and falling home values will accelerate the “negative net domestic migration rate,” as very wealthy Californians “vote with their feet” by moving to low-tax states.
Wasn’t CA just bragging about all the rich people moving on to take the place of the middle classers moving out?