Posted on 02/17/2023 9:52:47 AM PST by george76
The very wealthy can hire top-notch tax attorneys and they need not worry about California taxes.
There are thousands of ways to work around taxes and hide income—and meet whatever “residence” tests there are.
If you have six houses around the country and/or world it is trivial to minimize your income subject to California tax.
49% of the budget goes to schools by law
Agreed, for the ultra wealthy.
For a local businessman entrepreneur who makes a million or more, it’s a little more difficult. Cost of living is high especially in the city and few who make a million bucks choose a very frugal life. Some do but most have to (for business reasons) or want to live like the Jones’. They are pretty much stuck. I know several. A lot of them made good money before the tax rates went berserk.
At least California has Prop 65 - which limits how much the state can raise property taxes so people who’ve owned their homes a long time don’t get killed by property tax increases, and people who paid off their homes and want to live on retirement income also don’t get run out of state they have cost basis on the home maybe 1/10th or 1/15th what it would be assessed at if they tried to buy it today. If you paid $1 million for a home now (which doesn’t get you any home other than a condo in a metro area, and a decent well furnished tract home if you will go to the far suburbs) you’d be paying $15,000 a year in property taxes alone. But a lot of those homes sold 20 years ago for $150,000 so their property taxes are only a few $1000 a year. Luckily for Califoria a lot of homes have flipped many times in the last 20 years so the taxable rate has been re-assessed at the higher valuation.
Anyway, my point was the local business guy who has a very successful business; he has a family, kids, maybe grand kids they all live in California. He can pass off some of his income to them (and probably does) putting them on the payroll. That kind of stuff. But you don’t want to leave a hands on business and all your family for 8 months of the year just to avoid $100,000 in taxes (or maybe you do lol). Maybe it’s not going to save much if you did.
Depending on the type of business, you can set up out of state companies and sell your wares at deep discount to that low tax entity which then resells them; and keep the profits there. With the Trump Corporate Tax Rate at 21% it can make sense to keep money in a corporation. Make $100,000 profit, pay $21,000 in taxes, and leave the $79,000 profit in the bank out of California. That would save you $14k in taxes for every $100,000 in profit you keep in a no income tax state.
It’s time to face reality my FRiends. Democrats don’t have the knowledge or ability to solve real problems. They live in a fantasy world and anything that doesn’t fit into their reality upsets them.
For the first time about an hour ago I saw two lethargic junkies / homeless get their fix. Had been asleep at their table. Went into the restroom and obviously shot up. Came out super animated and at the top of the world.. This is a VERY conservative area .. voted Trump .. a new phenomenon for here.
When he was the mayor of SF, Newsom violated state law and started allowing gay marriage. He’s a hero to the wokesters.
The Supreme Court took that case and slapped California down hard. I have heard that they still try it sometimes, but the law is against them, so their efforts are readily smashed.
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