[mark212]

This is such a misleading essay. AB 2088 (to tax net worth over $30 million at 0.4%) was a gut-and-replace two weeks before the end of the session which never even got a vote in committee.[1] It hardly reflects the will of the Assembly, much less a serious attempt to change California law.

The other parts of the essay do a bait-and-switch between noting that some businesses are leaving and implying that it’s the over-regulated business environment —- but if you drill down it’s really motivated by the state income tax. Which, yes, is high and can be significant especially on the sorts of people that are successful at running their own business, which is to say high earners.

And still, how many businesses did California lose in 2018 and 2019? Less than 800 total. So out of the 40 million people that live here, 0.001% chose to leave every year. Even if that’s a net number (which the author doesn’t clarify) it doesn’t rise to the level of something policy makers should care about.

One would think economists writing at the Hoover Institute would be more rigorous about their facts and argument, and not just whine in print and get it published.

[1]https://leginfo.legislature.ca.gov/faces/billHistoryClient.x...

[refurb]

And still, how many businesses did California lose in 2018 and 2019? Less than 800 total. So out of the 40 million people that live here, 0.001% chose to leave every year.

I assume a business would have more than 1 employee?

[jjeaff]

I would assume few businesses that move would convince a significant number of their employees to move.

In other words, I can't imagine very many businesses with lots of employees moving at all.

[refurb]

There have been a few very large companies who have moved their headquarters out of state. From what I can remember, McKesson (top 3 drug distributor), Schwab.

Of course they are headquarters, not the entire companies, so it's still only a few thousand.

Regardless, I don't think California is hurting for companies. At least not right now.

[primrose]

The fact that the "gut-and-replace" wealth tax happened in the first place is a problem. Rob Bonta then gets on TV and justifies it ensuring no one with substantial assets will come here.

Income tax at 13% is enough to encourage some founders not to come here. 16% will be worse.

https://www.youtube.com/watch?v=QrEK5hgr3vY

[mark212]

If your point is that at least a dozen or so elected pols thought it worth doing this as a “virtue signaling” exercise, then yes I agree. Not sure it has all that much chance of dissuading rich folks from coming. I honestly don’t know who in their right mind with the geographic option would ever choose to make their permanent residency in a state with income tax. Buy a condo in Las Vegas, register to vote there, and spend all your time in San Diego.

As to your second point, I sincerely doubt California’s greatest problem is too few wannabe founders. ::smiley face emoji::

[primrose]

Here's a rich dude named Peter Schiff: https://twitter.com/PeterSchiff/status/1294454477299363840

He moved to Puerto Rico to avoid taxes. He is an outlier but his sentiment is correct.

This is a spectrum. If California raised it's taxes to 100% no one would live in the state. If they dropped the taxes to near zero lots of people would move in given everything wasn't chaos. The higher the taxes go the more likely someone is to not move here.

> Buy a condo in Las Vegas, register to vote there, and spend all your time in San Diego.

California will charge you income tax for the time you spent in San Diego. California will even charge you income tax if you never set foot in the state if your income is earned from the state: https://www.forbes.com/sites/robertwood/2019/10/22/now-calif...

> I sincerely doubt California’s greatest problem is too few wannabe founders

You underestimate the influence of the rich. People mimic what they perceive to work. If rich people don't move here, people who aspire to become rich will not move here.

[dariusj18]

> If California raised it's taxes to 100% no one would live in the state

That would obviously depend on the services provided.

[primrose]

You underestimate people's need for freedom.

[dariusj18]

Freedom is an illusion, and having a 100% tax doesn't technically restrict freedom. Any policy that arose would itself need to be measured against the tolerance of the people, but if that 100% tax came with guarantees of the things that actually restrict our freedom, there might be a lot of people who would tolerate it.