Taxes Don't Drive Out California Rich: Study

[NeoConsSuck]

Source: CNBC

As Californians debate the "rich tax" contained in Gov. Jerry Brown's Prop 30, a new report challenges one argument for lowering tax rates on the wealthy: that millionaires simply move to avoid higher taxes, leaving the middle class with a higher burden.

The study, by sociologists at Stanford and Princeton, looked at two tax changes in California, a 1996 tax cut on high-income filers and a 2005 levy called the Mental Health Services Tax that took one percent of income over $1 million. Using tax-return data, the researchers examined how the changes affected "millionaire migration" in or out of the state before and after the tax laws were passed.


The research showed that millionaires not only were unmoved, so to speak, by their taxes being raised, "the highest-income Californians were less likely to leave the state after the millionaire tax was passed," wrote Charles Varner and Cristobal Young in their report.

In fact, the richer the Californian, the more likely he or she was to stay, the study found. Nor did the data suggest that lowering taxes lured millionaires to the state. (Read more: Millionaire 'Munger Sandwich' Squeezes Gov. Brown)



Read more: http://finance.yahoo.com/news/taxes-dont-drive-california-rich-194018632.html

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<sarcasm>Why is CNBC embracing socialism?</sarcasm> Here is a study that will make Teabagger heads explode.

[cantbeserious]

1. One More Republican Myth Bites The Dust

eom

[pediatricmedic]

12. Not really, 1% tax rate barely even register to most people in all tax brackets...

Especially after some nice tax breaks.

This study is pretty fualty.

[cantbeserious]

18. Beg To Differ With Your Opinion

eom

[bloomington-lib]

2. Heads exploding implies there's some kind of reaction in there. More like a flat fizzle tsssssssssss

[riderinthestorm]

3. K&R. nt

[zentrum]

4. I Don't Think the 1%...

....tax amount on income over a million is a large enough amount to discount the Republican talking point.

To make the case, we need a real tax increase on the rich and on corporations and 1% is barely noticed by the them.

So I don't think this study does much for us.

How big was the 1996 cut?

[dimbear]

5. California is a wonderful place to live. When you have money, you can live wherever you want to

live, such as in California.

[truedelphi]

7. Like how many millionaires are going to leave the beach house to

Live in the Dakotas?

Doesn't make sense.

There is however, a lot of "white flight" involving those in California's middle class, as California is very pricey and it's impossible for a family to make it in LA or the Bay area on less than $ 100 K (Unless they have inherited a house or something.)

[CountAllVotes]

13. huh?

As a fifth generation Californian, I'd like you to know that I am not a millionaire and my income is borderline poverty level and it has been that way most of my life and yes, I lived in San Francisco and the Bay Area for about 40 years or so.

Thanks for adding to the myth that Californians are a bunch of rich people sitting around counting their money. This is certainly not the case nor is it the case of most people that I know that live here.

Sure, I know a few of the "haves" but they have nothing at all to do with people like myself and these same "haves" tend to be from other states, not California, just fyi.

[Momgonepostal]

16. I'm a Californian too, but I get what he's saying

We're not all a bunch of millionaire beach bums, but it IS easier to live here if you have money. You don't get a lot of housing "bang for your buck" here. I'm a 4th generation resident, gold-rush descendant, but I would have bailed a few years back because of the housing market, if I could have talked my husband into it. As it turns out, we stuck it out and got a house during the 60% off sale.

[CountAllVotes]

17. yeah I did the same thing

I managed to get on the waiting list with the USDA Rural Housing Program.

My name finally came up after 10 years on that list and yes, I got a house that way -- a foreclosure that no one cared to live in nor want (sat empty for about 2 years from what I know).

It is a small house but suits my needs just fine and the taxes are low and the cost of upkeep is low as well. I managed to get this before the big BOOM hit in 2000 luckily.

If not for this, I'd still have nothing to show for my life in California. Damn glad to have what I managed to finally obtain after waiting for years and years and years ...

[truedelphi]

19. White flight among members of the middle class exists.

It's a reality. Whether you or I have chosen to leave the state is not the point. The point is that other people have been making that decision.

If you don't like that fact: fine. But don't shoot the messenger.

One thing that factors into it is that during the time period when rents were outrageous, a middle-incomed family might not be able to afford owning a home. So they put a lot of money into rent. Rent monies don't offer any mortgage deduction. If you have two or three kids, you should be saving for college, but the government is taking probably an additional 15% on account of no mortgage deduction.

Factor into this the other factors - extreme congestion, pollution, and the tremendous burden put on students by the colleges and universities (it now takes many students five years to get through the state university system, and now tuition is escalating, while employment while attending schools is harder to come by), and the idea of living elsewhere becomes easy to understand.

My son made the decision to go back to college in Illinois some twenty years ago.

His student housing costs while attending college were minimal. He'd have been paying at least and possibly over 5700 dollar for nine months each year to go to UC San Diego. And I'd have owed taxes on those housing payments!

[SunSeeker]

6. Well duh! If they're paying $50M in CA for a mansion that would only cost $5M in TX,

they would be more than willing to pay the extra 3% in taxes to keep living here in millionaires' paradise.

[muntrv]

8. I believe Mitt Romney has a house in La Jolla, CA.

[slackmaster]

10. Yes, and I can guarantee you he won't be filing a California Form 540 in April

He pays substantial property tax on that place and he pays sales taxes when he's here, but there's no way he'll claim California residency.

[slackmaster]

9. It all depends on how you define "leaving" the state

I personally know people who live in California for most of every year, but maintain their permanent residences in other states - Ones that have no personal income tax.

For a person living on a fixed and taxable income, that's equivalent to about a 10% pay raise.

[mountain grammy]

11. When FDR was told the wealthy would leave America if taxes were higher, he said:

"I will miss them."

[kooljerk666]

14. LOL boy he was being generous..............

That is one thing that irks me about New Hampshire. No state income tax & rich ass tax dodgers flee to there. If I was a resident I would work real hard to get a progressive income tax to drive rich selfish trash OUT.

In PA I am pretty sure we have a flat line tax on income, I want to see it changed to be more progressive. ie more tax on more income.

Seriously anybody know of any reasons why anybody would want these bastards in their communities???

[ck4829]

15. K&R