A Little Substance wrote:
You can always count on people to turn any negative story into a confirmation of their worldview. California has a significant budget deficit, therefore, the people in this thread say, all the rich people must have suddenly departed en mass because taxes are too high. Do they pause to think how ridiculous that sounds? Of course not.
The CA Office of the Legislative Analyst (a nonpartisan fiscal agency) is what most of these stories are citing. Does the LAO blame the budget deficit on an exodus of rich people? They do not! What DO they cite as the reason for the shortfall?
1. Errors in budgeting. The state conformed with federal tax filing extensions, and so did not realize that income tax revenues were falling until after the last fiscal year had already ended. So they adopted a budget that was out of wack with revenue. i.e. They increased spending too much.
2. Federal Reserve policies have an outsized impact on CA because of the state's reliance on income/capital gains taxes. If you rely too much on these taxes, you are more susceptible to market swings. Fed actions made borrowing more expensive and reduced investment over the last couple years, which has an outsized impact on a state like CA. They got a lot less money from rich people, but obviously not because all them left. (The state had a huge budget surplus just two years ago because of a surge in asset prices created by pandemic stimulus. They should have saved that surplus in anticipation of future revenue swings, but instead much of it was spent or devoted to tax relief.)
You can argue that taxes are too high/volatile but lets stop just making sh*t up.
The FACT is that people are leaving CA. But it isn't the rich, it's the people who can't afford the high housing costs. Because of high housing prices, California homeowners are actually moving LESS. The state is in desperate need of addressing their housing supply issue. Everyone knows this, and yet the number of new building permits hasn't changed in over a decade.
MOAR HOUSES!!!
