Californians Fleeing to Nevada

Taxes have consequences. That’s something tax increasers don’t understand. Remember how Gov. Jerry Brown and others campaigned last year for Prop. 30, saying millionaires had to “pay their fair share” (even though “millionaire” was defined, in California math, as someone making $250,000 a year)? But they insisted the tax increase would not drive people out. Wrong.

The reality, from Joel Fox:

Anecdotal, yes, but a news report indicates that warnings made during the Prop 30 campaign last year are playing out — higher taxes are sending some Californians across the state line to Nevada.

Under the headline, California Rich Seek Nevada Tax Haven, in the Tahoe Daily Tribune, the article says that Californians accounted for 43 percent of the 288 sales so far this year in Incline Village and Crystal Bay. More to the point, an Incline Village real estate broker reports that of the 39 sales on Nevada shores of Lake Tahoe to Californians since the beginning of the year, 15 buyers, forty percent of the total, specifically said they moved to Nevada to escape the Prop. 30 tax hikes. 

Other brokers confirmed that there has been an increase in high-end housing sales that the reporter wrote was attributed to California residents’ “desire to get beyond the reach of the Golden State taxman.” Sales on the Nevada side of Lake Tahoe were stronger than on the California side with a broker quoted as saying, “Prop. 30 probably has something to do with that.”

Some would argue the numbers reflected in the article are not significant. However, since the California tax system is built something like an upside down pyramid with the few at the bottom holding up the structure, a small but significant stream of high end taxpayers moving to low tax states could have consequences on California’s bottom line.

I hope so. I hope tax collections plunge sharply so the taxpayers get to keep more of their money and the state’s finances implode faster. The faster that happens, the faster we can enact reforms.

By leaving California for Nevada, a wealthy person’s income tax rate drops from 53 percent (federal and state) to 40 percent. That’s a whopping 25 percent drop. More from Fox:

Perhaps more troubling was the note in the article about “California entrepreneurs, many of them owners of mid-sized companies in the Central Valley, who want to move their companies lock-stock-and-barrel to Nevada.”

According to the report, the business owners want to keep their companies close while at the same time protecting themselves from the taxman.

Many of these firms are S Corporations, which pay taxes at the high 53 percent California level, same as for persons. By moving to Nevada, their company also gets a 25 percent tax cut.

Here’s a slogan: “California. It’s a place to leave.”

(John Seiler is the managing editor of CalWatchdog. Originally posted on CalWatchdog.)

Comments

  1. “California. It’s a place to leave.”

    Increasingly, for the last 2-decades, with no respite in sight.

    • But askeptic, if you love California as I do, then you welcome the pain to gain the chaos. After all, it is the socialist progressives’ executive, and legislative expensive house of cards bureaucracy at risk. It trembles and sways now, but will eventually succumb to financial gravity (debt).
      The beauty part is tht it is the socialist progressives’ reckless spendoholism that continues weakening the whoe rotten mess day-by-day.
      It will be horrible and glorious when that day comes. A fresh new California future will dawn then.

  2. PRIME example on how democraps can ruin a state. I was born and raised CA and can’t load the moving truck fast enough. Crime, Tax’s, loss of constitutional rights and gays lesbians and illegal’s have taken over and get everything they want. Brown has yet to come out with ANYTHING that improves the law abiding LEGAL citizen’s life.

  3. First time we figure out a way to phone it in at work we are gone.

  4. Interesting…. I believe it.. What I cannot believe is the article in the 12 Sep. 2013 edition of Rolling Stone magazine which suggests that Gov Brown has “rescued California” and goes on about “HowJerry Brown Turned Around the Golden State”. If you haven’t seen it/read it I would like a rebuttal from California Political Review.
    Sincerely,
    Douglas Settle
    California Taxpayer for 53 years!

  5. CA Golden State already dead since commie democrap party controlled its in decades. The new name is Crazifornia or Mexifornia the place of Union & democRATS corruption politicians at all levels plus freeloaders & illegal invaders.
    Democrap politicians had only one solution for spending free is TAX, TAX, TAX,……..

  6. 13%, not 25%. 53 minus 40 is 13. Sales tax is lower. Property tax is calculated at approx. the same rate except that a house that costs 150,000 in Nevada costs 500,000 – 700,000.

    • Curtis, can you do math? It IS a 25% decrease by moving to Nevada. You were looking at it like a subtraction problem, and not at the percentage. Another fine example of the California educational system.

  7. We own a convenience store / gas station in north eastern California. We are a bedroom community for the Reno area. People commute to Reno and buy fuel there because of the major price difference. We have to deal with higher tax’s, overbearing regulations and excessive enviromental controls compaired to our neighbors just 38 miles away. Our business has been listed with a commercial realitor for 5 years now and we havent even had one offer. We would like to retire but cant. We want to sell out, pay off our distributors, and move to Nevada!!!

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