Money flees CA onerous taxation, regulations, and ridiculous cost of living
Image by Vincepal on Flickr
The pandemic lockdowns accelerated flight from states with onerous taxes and a high cost of living. The latest data from the Internal Revenue Service shows that the exodus has continued after life got back to quasi-normal. And CA's revenue drain--led by Silicon Valley--is the hardest hit. The WSJ reports.
The IRS last week published its annual data on the migration of taxpayers and adjusted gross income (AGI) between states. California ranked, again, as the biggest income loser ($23.8 billion) in 2022, followed by New York ($14.2 billion), Illinois ($9.8 billion), New Jersey ($5.3 billion) and Massachusetts ($3.9 billion). The top gainers were Florida ($36 billion), Texas ($10.1 billion), South Carolina ($4.8 billion), Tennessee ($4.7 billion) and North Carolina ($4.6 billion).
Although higher interest rates and housing prices reduced mobility in 2022, the flight from progressive states far surpassed pre-pandemic levels. California lost nearly three times as much income in 2022 to other states as it did in 2019. New Jersey’s net income loss hit a record in 2022, largely owing to fewer New Yorkers moving across the Hudson River. ...
Blame in part ... high energy and housing costs. Electricity costs two to three times as much [in California], and gasoline $1 to $2 a gallon more, as in states without burdensome climate mandates. California’s median-priced home ($860,500) is double that of most states owing to a housing shortage caused by zoning restrictions and environmental laws. ...
The Bureau of Economic Analysis last week released data that shows annual growth in proprietors’ income since the start of the pandemic has lagged the rate of inflation in California (1.6%), New York (1.2%), New Jersey (0.3%) and Illinois (-0.6%). Business income has grown significantly faster in Texas (4.1%), Florida (7.6%) and Tennessee (8.5%). So have wages and jobs.
Read the whole thing via taxprof blog.
Follow Opportunity Now on Twitter @svopportunity
Opp Now enthusiastically welcomes smart, thoughtful, fair-minded, well-written comments from our readers. But be advised: we have zero interest in posting rants, ad hominems, poorly-argued screeds, transparently partisan yack, or the hateful name-calling often seen on other local websites. So if you've got a great idea that will add to the conversation, please send it in. If you're trolling or shilling for a candidate or initiative, forget it.