Friday, August 14, 2020

This is why people are getting out of California right now.

...the California proposal would raise the highest state tax rate in the country even higher, and renew the possibility of wealthy Californians fleeing the state. ...The tax would only effect the top 0.5% of California taxpayers. But that small group of super-earners — many of them in tech — pay 40% of the state’s tax revenues, according to California’s Franchise Tax Board. The new tax rate would also apply to capital gains, which accounts for a large share of tech income, since California taxes capital gains at the same rates as ordinary income. With many tech companies now allowing executives to work remotely for the next year, top earners could more easily leave the state and work in places with no income tax, like Nevada and Texas. If the new tax is approved in August, it would be retroactive for this year and apply to income earned since January 2020. “The tax hikes would be the tipping point for many taxpayers,” said Robert Gutierrez, president of the California Taxpayers Association, which advocates lower taxes, “prompting them to book a one-way trip to one of the 49 states with lower taxes.”