Monday, December 5, 2011
Tax practitioner and blogger Russ Fox is fleeing California for Nevada:
My tax bite is roughly 10% to California. For every dollar I make, ten cents goes to Sacramento. (Yes, I get a benefit from that in that state income tax is deductible on federal tax. However, because of the Alternative Minimum Tax even that benefit is capped.) For the past few years I’ve considered if I could move my business to a friendlier environment. Earlier this year, I decided to do so.
I’ve sold my house in Irvine, and am in the process of purchasing a home in the Las Vegas area. I will be in a much friendlier business environment, with a lower cost of living. The home I’m purchasing is nearly double the size of my current home and costs almost 50% less than what I sold my current home for.
There comes a point where decisions are forced on you. With the growth of my business, I looked at possibly hiring another tax accountant in 2010. When I ran the numbers, I found that I would lose money by hiring a productive tax accountant. That’s because of all the regulations and costs that I would immediately incur if I had an employee. I’m not stupid: If I lose money by hiring someone, I’m not going to do it.
Yet my business was (and is) growing, and I had to do something. ... As of a week from now, I will have executed my own Escape from California.
Tax Update Blog:
Russ doesn't say that taxes are the only reason he is leaving California. He is saying that high taxes are a significant part of why California is business-hostile. When things are bad enough to drive a growing business from the perfumed air and divine weather of Orange County to the desert wastes of Nevada, that's saying something.
The IRS today released updated statistics on the number of taxpayers moving to and from each of the fifty states. Tax Foundation data is here. Here are California's net migration data: