Saturday, February 11, 2006

Off to Greener Pastures

Thanks to this housing bubble, our insane taxes, and the residual effects of the stock bubble, people are packing up and leaving the state; not just those who are struggling but the wealthy too.

Some choice quotes:
The rebel colonists who dumped 45 tons of tea into Boston Harbor showed the power of one kind of tax revolt -- the raucous kind. Now, 233 years later, large numbers of taxpayers across America are taking an entirely different approach. Quietly, without banners or raised fists, they are packing up their families and belongings and moving from high-tax states like California and New York to lower-tax locales like Florida, Nevada and Texas.

"It's a stealth migration, and it's one of the biggest, most significant yet least recognized movements of the population in American history," says Vedder. "People are voting with their feet to say that taxes do matter."

Wealthy Americans, in particular, seem fed up with giving an ever-growing share of their riches to the state tax man. Many are upset at moves by New York, New Jersey and a number of other states to squeeze ever larger revenues from estate taxes.

The basic math of moving to a low-tax state certainly can be compelling for the wealthy. "Their savings can be so large that it makes relocation all that much more worthwhile," says Len Adler, a wealth adviser for JP Morgan in Palm Beach, Fla. He and colleagues at Morgan have seen a noticeable increase in clients who are willing to pull up stakes to save taxes.

Out west, California residents, who pay one of the highest income-tax rates in the nation -- 9.3% -- are hopping across the border to Nevada, the region's biggest tax haven, with no income or estate taxes. It's not just Las Vegas -- Californians also are settling into the likes of Reno and Carson City

In all, California suffered a 693,730 net decline in its population so far this decade, despite a burgeoning immigrant population. One of those departing was Michael Todd, 58, a real-estate developer and consultant. Fed up with the Golden State's income tax and rising property taxes, Todd and his wife, Cheryl, relocated from Orange County to Prescott, Ariz. Says he: "Our state income taxes are 30% lower, and we're paying less in property taxes even though we've got a lot more home for our money."

Not surprisingly, many states are feeling the drain of fleeing taxpayers. At a time of serious competition between states for jobs and tax revenues, "states with high taxes are losing their wealthiest and most successful taxpayers, as well as businesses, and they're not creating as many jobs," says Dan Clifton of Americans for Tax Reform.

7 Comments:

Blogger fredtobik said...

What do you mean Prescot, Vegas and Texas arent culturally sophisticated? You mean High School Football is more important that education? I can't go outside? but the sun is out? what??? 120 degrees? wtf...
Why does my nine year old know what a vig is, and juice isnt OJ? Thank God I left California to save MONEY... oh wait people are leaving for money... weird... how people place money as such a great importance they would pick up and move... again... /hug Darwin

"Aside from making all the right legal moves, you need to choose a state you'll like. "People go to Florida just for the tax breaks and then complain, 'It's too hot, I don't like the hurricanes, I miss my friends, the pizza doesn't taste good,' " Slott says.

Cliff Diamond, 44, says he made a big blunder moving to Las Vegas from Santa Clarita, Calif., 10 months ago. As a self-employed appraiser, he had the flexibility to relocate with his wife and four kids without interrupting his income stream. But now, realizing the schools aren't as good for his kids and missing the sophistication of Santa Clarita, he has listed his house for sale and is looking forward to moving back "home," he says.

In South Carolina, back-and-forth movers even have a name: halfbacks. "It's for people who were originally up North, moved to Florida and then ended up around here," Stephen D. Kirkland, an adviser in Columbia, S.C"

Feb 11, 2006, 1:52:00 PM  
Blogger Wickedheart said...

Well, I never really minded paying CAs higher taxes too much when I felt I was actually getting my moneys worth. It used to be that CA had the best schools, the best roads and so on. Now the state infastructure is crumbling, our roads are sorry, our spending on schools is near bottom and the schools are crap.

Feb 11, 2006, 2:05:00 PM  
Blogger fredtobik said...

lol I wonder why California Schools are considered poor...

Should I put on my racist mask?

The Economist magazine did a report on California Schools a few years ago, the conclusion was stay away from locales where english isn't the primary language, or getting a day laborer was as easy as going out your front door.

Ya I'll move to the Carolinas or Florida for the roads, I don't want ruin my SUV on these crappy Californian roads.

Feb 11, 2006, 2:31:00 PM  
Blogger David said...

"In all, California suffered a 693,730 net decline in its population so far this decade, despite a burgeoning immigrant population."

These number are plain WRONG.

Feb 12, 2006, 1:02:00 PM  
Anonymous rejunkie said...

Yes, they are. This from the US census bureau:

7/1/2000: 34,002,756
7/1/2005: 36,132,147

That is a gain of 200k not a loss of nearly 700k.

Feb 12, 2006, 2:52:00 PM  
Blogger Rob Dawg said...

I was going to correct the false numbers in "greener pastures" article but people beat me to it. It is a shame that an important trend is misreported in the fashion. Kalifornia isexperiencing anet out migration to other states. International illegal and legal immigration along with births aremassively swelling the population at the same time. We are losing the smartest, most productive and most civic minded and replacing each one with 2 net drains on society.

Feb 13, 2006, 7:57:00 AM  
Anonymous rejunkie said...

Robert-

Just to be clear -- legal immigration is not a net drain. People who come in through the front door have to pass the test to get a green card which is extremely difficult to get. Usually educated, white collar individuals in their 20s and 30s do best at obtaining green cards. Legal immigration is almost always a boost to the economy, since the expensive (to the state coffers) step of raising and educating a child has been skipped.

Illegal immigration is debatable as to whether it contributes more than it takes away.

Feb 13, 2006, 9:11:00 AM  

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