Will the Wealthy Start Exiting California if Tax Hikes Are Extended?

Will the Wealthy Start Exiting California if Tax Hikes Are Extended?

Will the Wealthy Start Exiting California if Tax Hikes Are Extended?

Just about everyone is aware that California has one of the highest tax rates in the country. So it wasn’t much of a surprise when voters passed a temporary tax increase back in 2012 that raised the state’s marginal income tax rate to 13.3 percent at the top level. That meant that the state’s wealthiest taxpayers had a combined tax rate of 52.9 percent.

Although many threatened to leave and many others feared a mass departure, the exodus from California among the wealthy never really materialized. While some of the state’s wealthier individuals did leave for other locations, studies showed that “millionaire tax flight is occurring, but only at the margins of statistical and socioeconomic significance.”

In fact, while California did see an overall loss of about 625,000 residents between 2007 and 2014, the state saw a net gain in college-educated residents. So even though more people have moved out than moved in, the rate of individuals with a higher tax rate has not experienced a major change. However, could that change if those temporary tax rates are extended or made permanent?

There is a current proposal that would extend the tax increases another 12 years, and many believe if it passes then the same group would seek to extend it again or even make it permanent. If that happened would the wealthy then be more prone to leave the state? No one knows the answer for sure, but if the tax increases are extended it will be interesting to watch how the scenario all plays out.

http://www.sacbee.com/news/politics-government/politics-columns-blogs/dan-walters/article91351432.html

 

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Alan Olsen, CPA

Alan Olsen, is the Host of the American Dreams Show and the Managing Partner of GROCO.com.  GROCO is a premier family office and tax advisory firm located in the San Francisco Bay area serving clients all over the world.

Alan L. Olsen, CPA, Wikipedia Bio

 

 

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The American Dreams show was the brainchild of Alan Olsen, CPA, MBA. It was originally created to fill a specific need; often inexperienced entrepreneurs lacked basic information about raising capital and how to successfully start a business.

Alan sincerely wanted to respond to the many requests from aspiring entrepreneurs asking for the information and introductions they needed. But he had to find a way to help in which his venture capital clients and friends would not mind.

The American Dreams show became the solution, first as a radio show and now with YouTube videos as well. Always respectful of interview guest’s time, he’s able to give access to individuals information and inspiration previously inaccessible to the first-time entrepreneurs who need it most.

They can listen to venture capitalists and successful business people explain first-hand, how they got to where they are, how to start a company, how to overcome challenges, how they see the future evolving, opportunities, work-life balance and so much more..

American Dreams discusses many topics from some of the world’s most successful individuals about their secrets to life’s success. Topics from guest have included:

Creating purpose in life / Building a foundation for their life / Solving problems / Finding fulfillment through philanthropy and service / Becoming self-reliant / Enhancing effective leadership / Balancing family and work…

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