Millionaires Fleeing California After Tax Hike

The Looney Left Report

Big-spending/high taxing liberals in California are driving high income people out of California, according to a new study

Forbes.com reported:

According to new research released by Charles Varner, associate director of the Stanford Center on Poverty and Inequality, California lost an estimated 138 high-income individuals following passage of the Proposition 30 income tax increase championed by Gov. Jerry Brown (D) and approved by Golden State voters in 2012.  

This new research by Varner updates a previous paper released six years ago that looked at domestic migration to and from California following a 2004 income tax hike.  

“One reason we wanted to update our previous paper is that this tax change in 2012 is the largest state tax change that we have seen in the U.S. for the last three decades,” Varner said. 

Prop. 30 raised the state’s top income tax rate by 8%, increasing it one percentage point from 12.3% to 13.3%, which is now the highest state income tax rate in the nation. Prop. 30 also hiked the tax rate on income between $300,000 and $500,000 by two percentage points, and raised the rate on income in excess of $500,000 by three percentage points.

In 2016, California voters extended the Prop. 30 income tax increases, which were originally scheduled to expire in 2019, until 2030. There will be an effort to extend those income tax hikes yet again prior to their expiration in 2030; book it now.  

Varner’s new research examined taxpayers who were and were not hit by the Prop. 30 rate hikes. He found that in the two years before the Prop. 30 tax hike was imposed (2011 and 2012), net in-migration for both groups “was positive and roughly constant.” Yet following 2012 and the passage of Prop. 30, net in-migration dropped for households that were facing an effective tax increase of 0.5 percent or more. The reduction was greatest for households facing the highest effective tax hike, according to Varner and his coauthors, who include Allen Prohofsky of the California Franchise Tax Board. 

This isn’t surprising for those who are familiar with other attempts to soak the rich with punitive state income tax hikes on high earners. 

Who will be left holding the bag? Lower income earners. Further down in the article, the state of Maryland did the same thing as California and drove out high-income earners.

To read more, go here.