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Take out Silicon Valley and see how your stats look ...
How is that relevant to reality? Take away hogs and see how Iowa looks. Take away corn and see how Nebraska looks. Take away oil and see how Texas looks. Take away the US government and see how Washington DC looks. Take away ....
How is that relevant to reality? Take away hogs and see how Iowa looks. Take away corn and see how Nebraska looks. Take away oil and see how Texas looks. Take away the US government and see how Washington DC looks. Take away ....
... I can continue all night.
Because tech is mobile... oil and farming are static ...
I don’t see people willing to pay 13.3% on top of federal rates over Seattle, Austin or other centres of the tech business.
People with high incomes don’t move to California... high income jobs are created in California principally in one sector of the economy that is based in one specific geographical area. California has a net outflow of residents earning with adjusted incomes over $200k a year. States without a income tax have a net inflow of these residents at a ratio of 1.41 which will accelerate greatly after the full ramifications of the 2017 tax act changes begin to bite. Why do you think the California legislature was trying to get a bill through that made state income taxes a charitable contribution? If the legislature is concerned then you know it’s a real problem coming up.
Because tech is mobile... oil and farming are static
Government is mobile ... take the government out of Washington DC and see what you’ve got.
Listen bub, this is really a dumb tack to set sail on. You really want to argue that Tech is about to abandon California? Billions and billions invested in their presence here for many reasons ... including synergy with each other and the nation’s leading academia brain trust.
To say nothing of how much the fat cats love the weather.
California has been on a juggernaut roll since it’s early beginnings. For a reason. For numerous reasons. People love it here.
Government is mobile ... take the government out of Washington DC and see what you’ve got.
Listen bub, this is really a dumb tack to set sail on. You really want to argue that Tech is about to abandon California? Billions and billions invested in their presence here for many reasons ... including synergy with each other and the nation’s leading academia brain trust.
To say nothing of how much the fat cats love the weather.
California has been on a juggernaut roll since it’s early beginnings. For a reason. For numerous reasons. People love it here.
Waiting for your next analogy to Detroit
Washington DC is fundamentally static much like a oil well... far more static then Google or Apple.
I’d argue California is essentially on the precipice of several major economic problems and the reliance on tech is only one of them. Washington has all of those Synergies and benefits too but is far easier to do business in. Hey I love California... I go there very regularly and my sister owns a beautiful ranch just North of San Diego in a area that I absolutely adore and I might even buy a property there and spend a couple of months a year there. But like many people of my views my sister included I’d never be resident there.
It’s a great place to visit and not a great place to do business.
Washington DC is fundamentally static much like a oil well... far more static then Google or Apple.
I’d argue California is essentially on the precipice of several major economic problems and the reliance on tech is only one of them. Washington has all of those Synergies and benefits too but is far easier to do business in. Hey I love California... I go there very regularly and my sister owns a beautiful ranch just North of San Diego in a area that I absolutely adore and I might even buy a property there and spend a couple of months a year there. But like many people of my views my sister included I’d never be resident there. It’s a great place to visit and not a great place to do business.
Hey, personal preference is, well, personal preference. And you are 110% entitled to your preferences.
That said? The folks whose businesses prosper in the world’s 5th most powerful economy - um - disagree with your preferences.
Washington DC is fundamentally static much like a oil well... far more static then Google or Apple. I’d argue California is essentially on the precipice of several major economic problems and the reliance on tech is only one of them. Washington has all of those Synergies and benefits too but is far easier to do business in. Hey I love California... I go there very regularly and my sister owns a beautiful ranch just North of San Diego in a area that I absolutely adore and I might even buy a property there and spend a couple of months a year there. But like many people of my views my sister included I’d never be resident there.
It’s a great place to visit and not a great place to do business.
Top 5 CA industries:
Tech
Ag
Aerospace
Tourism/service
Motion Pictures
Also big in education, seaports/airports
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Because tech is mobile... oil and farming are static ...
I don’t see people willing to pay 13.3% on top of federal rates over Seattle, Austin or other centres of the tech business.
People with high incomes don’t move to California... high income jobs are created in California principally in one sector of the economy that is based in one specific geographical area. California has a net outflow of residents earning with adjusted incomes over $200k a year. States without a income tax have a net inflow of these residents at a ratio of 1.41 which will accelerate greatly after the full ramifications of the 2017 tax act changes begin to bite. Why do you think the California legislature was trying to get a bill through that made state income taxes a charitable contribution? If the legislature is concerned then you know it’s a real problem coming up.
The debate for states like NY and CA is how to adjust before it begins to do real damage.
Employee salaries are tax deductible.
Also there is a progressive tax schedule. Someone making 200k a year will pay around 8% income tax in total. 12.3% taxes are for everything you earn over 500k dollars. At that point who cares?
The 160k tech job you have in CA may not exist elsewhere or it will come with a lower salary elsewhere. If you've worked in the state for a while you may have a lot of housing equity to buy amazing or vacation homes elsewhere if you leave the state. You may also have bolstered retirement savings from higher social security contributions and more money to toss into a 401k untaxed.
If you're young and single CA is a great place to live. If you have kids and a family CA is only good if you make a lot of money.
Most people even who are well off have a huge incentive to leave the state by age 50 as their money will go farther elsewhere. Retiring in expensive coastal areas of CA is hard unless you're a 1%er usually.
So yeah it makes sense to live in high tax high income blue states like CA, NY or Mass earlier in ones career. The fact that lots of poorer people are fleeing isn't surprising.
Washington DC is fundamentally static much like a oil well... far more static then Google or Apple.
I’d argue California is essentially on the precipice of several major economic problems and the reliance on tech is only one of them. Washington has all of those Synergies and benefits too but is far easier to do business in. Hey I love California... I go there very regularly and my sister owns a beautiful ranch just North of San Diego in a area that I absolutely adore and I might even buy a property there and spend a couple of months a year there. But like many people of my views my sister included I’d never be resident there.
It’s a great place to visit and not a great place to do business.
That's a rather myopic view of things. If you start with the assumption that "My company has X dollars of taxable profit. Which state is best for my company?" then obviously the states with the higher tax rates will end up looking like "bad places to do business." The thing is, taxes are not the only factor in determining where to do business. California's main advantage is geographic and I don't mean just the weather. Due to it's location, the state attracts the best and brightest from all over the world, which in today's globalized economy gives it a huge advantage over every other state in the country.
Just consider, if you have a company in "#1 business climate Wyoming or wherever" and want to hire some talented employees, you get to take your pick out of a pool of only 580k or so people - maybe a few million if you count the surrounding states too. The only folks overseas that want to go to Wyoming are Yellowstone tourists so that's a no go. In California, you would be taking your pick out of 40 million people + the millions of folks overseas who want to come to California. It's pretty clear that CA would be the far superior choice here, hence how companies like Google and Apple got to where they are today. They didn't move to a "better place to do business", because what kind of quality people you can hire is far more important to the success of your business than what the tax rates are. This is particularly true for startups since taxes only hit profits, and startups are often not profitable for their early years so the tax rates are irrelevant.
Even for mature companies, Apple and Google are certainly wealthy enough now that they could move any time they want. But the thing with tech is that while it is mobile, the industry moves so fast that innovation is how those companies keep their edge. To keep up on innovation, you need the absolute best and brightest working for you and that means staying in CA where you can draw on talent from Asia, Latin America, as well as the large local population.
That's a rather myopic view of things. If you start with the assumption that "My company has X dollars of taxable profit. Which state is best for my company?" then obviously the states with the higher tax rates will end up looking like "bad places to do business." The thing is, taxes are not the only factor in determining where to do business. California's main advantage is geographic and I don't mean just the weather. Due to it's location, the state attracts the best and brightest from all over the world, which in today's globalized economy gives it a huge advantage over every other state in the country.
Just consider, if you have a company in "#1 business climate Wyoming or wherever" and want to hire some talented employees, you get to take your pick out of a pool of only 580k or so people - maybe a few million if you count the surrounding states too. The only folks overseas that want to go to Wyoming are Yellowstone tourists so that's a no go. In California, you would be taking your pick out of 40 million people + the millions of folks overseas who want to come to California. It's pretty clear that CA would be the far superior choice here, hence how companies like Google and Apple got to where they are today. They didn't move to a "better place to do business", because what kind of quality people you can hire is far more important to the success of your business than what the tax rates are. This is particularly true for startups since taxes only hit profits, and startups are often not profitable for their early years so the tax rates are irrelevant.
Even for mature companies, Apple and Google are certainly wealthy enough now that they could move any time they want. But the thing with tech is that while it is mobile, the industry moves so fast that innovation is how those companies keep their edge. To keep up on innovation, you need the absolute best and brightest working for you and that means staying in CA where you can draw on talent from Asia, Latin America, as well as the large local population.
Apple is opening a huge campus in Texas and does their manufacturing in China. Google is not only in Ca either. Granted not many techies in Wyoming but there is lots of states out there with smart people. Why would a billion dollar company stay where they have to pay more and more taxes??? Wouldn't be very intelligent. If you listen to Browns exit interviews it's a major concern of his. If he's worried we should all be terrified.
Apple is opening a huge campus in Texas and does their manufacturing in China. Google is not only in Ca either. Granted not many techies in Wyoming but there is lots of states out there with smart people. Why would a billion dollar company stay where they have to pay more and more taxes??? Wouldn't be very intelligent. If you listen to Browns exit interviews it's a major concern of his. If he's worried we should all be terrified.
Anonymous pessimistic poster Finper calls Apple, Google, et al “unintelligent” ... chuckle for the day . I’m sure they’ll be calling for advisory services any minute.
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. I’m sure they’ll be calling for advisory services any minute.
