Did you know that about 90% of Californians have lower taxes than Texas?
It’s true. Texas, and this applies to a lot of so-called “Low Tax Jurisdictions”.
They are not low tax states for the bulk of their population, they are just low tax states for rich people and large corporations.
This certainly matches the experiences of two people I know/knew, an author and an artist.
The former found his taxes and fees lower in Maryland than in Pennsylvania, and the latter found the same case for New Hampshire and Massachusetts:
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These statistics are relevant, though, to any discussion of why so many people have been leaving California. Taxes often dominate public discussions of such trends, thanks in part to the unrelenting efforts of Republican policy entrepreneurs Arthur Laffer and Stephen Moore, whose 14th annual, mostly tax-based economic competitiveness report for the conservative American Legislative Exchange Council is out this month. But it’s awfully hard to argue that taxes have been the main thing driving the California exodus, given that (1) it has been concentrated among the less affluent, (2) their No. 1 destination has been Texas, according to 2010-2018 Internal Revenue Service data that I tallied up early last year and (3) lower-income and middle-income people face higher effective tax rates in Texas than in California.
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Middle-class taxes are lower in Nevada, the No. 2 beneficiary of net migration from the Golden State, but for a household at the 2019 California median income of $75,235 the 1.8 percentage point difference in effective tax rate adds up to $1,354 whereas the difference in average annual rent for an apartment or house between metropolitan Los Angeles and metro Las Vegas is $6,336, according to Apartment List’s April estimates.
For those in the top 1% of the income distribution, who in California in 2018 had adjusted gross incomes that started at $680,687 and averaged $2.2 million, the story is much different.
I’m thinking that people who protest against inequality should try to address things like states tax codes, particularly those with no income tax, like Washington, Texas, and Florida, and those with flat income tax rates, like Massachusetts, Illinois, and Pennsylvania.
Soaking the rich is popular right now, and the number of people who actually relocate for tax purposes is very small.