Are You Leaving If Proposition 30 Passes? (income, property taxes, to live)

[josh u]

Prop 30 is probably gonna cost me an additional $2500-3500 per year. I'm not gonna move but it means I'll buy less things, eat expensive foods like sushi less often, spend less on remodeling my bathroom when the time comes, etc. On top of that, there's the Obamacare high-earner tax that's coming. This all means less money for private business from me, and more money for lazy DMV workers or obese cops.

[littlejoe]

I agree with "leaving the Golden State". The passage of Prop 30 is the proverbial "straw that broke the camel's back" for us. We've been in California for 18 years and stayed after the mental health millionaires tax passed several years back- but this new tax on top of increased federal taxes-is absurd. I laugh when I read articles that say that millionaires won't leave because I know of several who ARE leaving as a result of Prop 30 passing. We are taking a trip to Austin, TX in the next few weeks ( following one of my husband's high tech clients who personally moved, and is moving his company there) to look at schools and houses. As others have stated- we can still visit CA anytime we want!

[Boompa]

When I go up to the Interstate I'll watch the number of UHauls and Penskes headed east vs the number headed west. When the eastbound get to about 60%, I'll be moving back

[USDefault]

Originally Posted by littlejoe

The passage of Prop 30 is the proverbial "straw that broke the camel's back" for us. We've been in California for 18 years and stayed after the mental health millionaires tax passed several years back- but this new tax on top of increased federal taxes-is absurd. I laugh when I read articles that say that millionaires won't leave because I know of several who ARE leaving as a result of Prop 30 passing. We are taking a trip to Austin, TX in the next few weeks

Same with us. My partners just agreed to move our business to either WA or FL. Shortly we will be scouting small offices to reestablish, we're already flying out to look at homes.

Proposition 30 is beyond terrible if you are a small business owner. The money we save in taxes from just one year will be significant, the move is a no-brainer and frankly we should have done it a year ago. Because proposition 30 is retroactive to the beginning of this year. Coupled with likely higher federal taxes on income and investment returns, it's a massive triple drop kick in an era of rising prices and inflation.

I'm looking forward to moving out. Other states are doing much, much better than California. Washington and the Gulf side of Florida are beautiful, and you can purchase a waterfront home for just a third of the price in California. No income tax, much lower housing costs, lower sales taxes, lower car and gas fees/costs -- this snowballs into massive savings via lower cost of living. The zero income state tax (and everything else) is going to be so significant that it means we can likely retire years earlier. This matters.

Anway, we've paid our fair share of taxes to California. But no more, the voters and politicians have gone too far in CA. We're out within six months. I feel bad for a couple of staff members we have to lay off, but this is the stark economic reality: we refuse to pay Proposition 30 tax rates. We are done and gone.

[steelstress]

I finish schooling next spring, and I'll be looking outside of CA to take my new higher earning power.

CA... *********.

[bradleyyo]

Based on the loony comments from Republicans here, here is where the rightwing wackos are now:
1) Denial
2) Anger <-------
3) Bargaining
4) Depression
5) Acceptance

[USDefault]

Originally Posted by bradleyyo

Based on the loony comments from Republicans here, here is where the rightwing wackos are now:
1) Denial
2) Anger <-------
3) Bargaining
4) Depression
5) Acceptance

I don't see this from the comments. Not at all. What I do see are everyday folk genuinely worried about sky-high tax rates which are going to eat 53% of a person's income between state and federal taxes. It's an outrageous number because of government overspending (two unfunded wars, generous pensions that were never properly funded, entitlement programs run amok). Make $1,000, and fully $530 of it evaporates into a black hole.

And that is only income tax (pre-Bush rate plus Prop 30 rates). Even more taxes with sales tax increase.

Finally, I'm not angry. We simply have concluded California's income tax is now too great a burden for us. Period. We refuse to pay it. Our relocation plans are in full swing, we'll be touring Gulf coast properties in December and we have the liquid means to stroke a check and buy a home (for a fraction of the cost of California, I might add). This is not difficult for people like us who save money and don't live beyond our means.

Thank god I had the foresight to never purchase a home in California and always rent. I avoided entirely the California housing runup and meltdown, boy has that done wonders for our bottom line. Tons of flexibility for us. We currently rent. And we can run our business from anywhere in the country. As soon as our lease is up, around five months from now, we're gone for good, and so are my business partners who will be selling their homes. It is done.

This isn't loonytunes, or denial or anger or bargaining. It's just the stark truth: we're high-income professionals, and we are out of here. I don't bear you any ill will for thinking differently than I do, or for your belief Proposition 30 is good law. You are welcome to your beliefs. Myself and others, however, have drawn a line at paying for these taxes, which we refuse to do. And I am thankful we have the means to immediately put our plan into action.

[Ultrarunner]

Originally Posted by USDefault

Same with us. My partners just agreed to move our business to either WA or FL. Shortly we will be scouting small offices to reestablish, we're already flying out to look at homes.

Proposition 30 is beyond terrible if you are a small business owner. The money we save in taxes from just one year will be significant, the move is a no-brainer and frankly we should have done it a year ago. Because proposition 30 is retroactive to the beginning of this year. Coupled with likely higher federal taxes on income and investment returns, it's a massive triple drop kick in an era of rising prices and inflation.

I'm looking forward to moving out. Other states are doing much, much better than California. Washington and the Gulf side of Florida are beautiful, and you can purchase a waterfront home for just a third of the price in California. No income tax, much lower housing costs, lower sales taxes, lower car and gas fees/costs -- this snowballs into massive savings via lower cost of living. The zero income state tax (and everything else) is going to be so significant that it means we can likely retire years earlier. This matters.

Anway, we've paid our fair share of taxes to California. But no more, the voters and politicians have gone too far in CA. We're out within six months. I feel bad for a couple of staff members we have to lay off, but this is the stark economic reality: we refuse to pay Proposition 30 tax rates. We are done and gone.

California still has Prop 13 providing some predictability to property taxes.

The reason I mention this I know quite a few Californians that moved to WA State... for the most part they are staying put.

The one shocker is individual Property Tax is not subject to limitations... very good friends bought a home that had been listed for about 7 months up there... just by coincidence or not... they price they paid was also the assessed price.

16 months later... the assessed value jumped 80%... yes, 80% and there was not a thing they were able to do about it. They were not old enough to be eligible for senior deferrals.

After much back and forth with the county Assessor with no reduction... they learned all the local property taxes took a huge jump based on the outrageous price someone from California happened to pay for some acreage with the idea to sub-divide and make a killing... this was in 2006

Eventually, the guy that paid the outrageous price declared bankruptcy and was never able to go anything with the land... that was little consolation for the neighbors left with the legacy of up to 80 assessment increases..

All I'm saying is do your research... my friends did and after they bought the Washington State equivalent of Prop 13 called I-747 was overturned in court and that was all that was needed for assessments to spike.

[JGC97]

Yes. Next Spring but I made that decision before Prop 30 passed. This was just the catalyst to get me going. Seeing where the state is headed, I don't intend to stick around and watch it. My obligations here are done and I'm ready for the next chapter in my life's book.

[mark313]

I will add my 2 cents here. I am the owner of a smaller Internet company that has been in California for a number of years now. I pay a lot of money to the state each year, both directly: my own personal income, sales and property taxes, corporate payroll taxes, various business and services taxes, etc; and indirectly: personal income, sales and property taxes from each of my employees, etc.

I watched the debate of proposition 30 with much interest, because to me, it wasn't simply a debate about one proposition but instead a thinly veiled exercise in class warfare and a debate about whether successful people should be viewed with respect, and supported by the state in their efforts, or whether they should be demonized and viewed as leeches and the "enemies" of the middle class. I saw too little of the first sentiment and far too much of the second, for my taste.

Many times over the last few months I was accused, as a "1%" opposed to prop 30, of an unwillingness to sacrifice to help the state's future. But whenever I turned the conversation to prop 13, how weak their own appetite for shared sacrifice became! For suddenly these "have nots" (by income) became "haves" (protected by prop 13). They transitioned roles so quickly - it stunned me - and it convinced me that this is not a debate about how to really fix problems in the future but rather dirty, ugly class warfare and nothing more.

Because of what I saw, I have decided to move my business out of state, either to NV or TX. Can I afford to pay an extra 3% in income tax? Yes, I have more money than I will ever spend. I save or donate over 80% of my income every year. It's not about the money; the new tax wouldn't impact my lifestyle at all. So why move? I don't want to be one of those people who has certain beliefs and principles, but is afraid to live up to them. I believe that California's next two decades will see continued polarization of the lower and middle classes, more class warfare type rhetoric, more demonization of successful entrepreneurs and small business owners, and of course, many more taxes and fees. I prefer that my hard work and success (and that of my partners and employees) support a community which celebrates and supports the same values of hard work, independence, and self reliance that I have always lived by. This was not an easy decision for me, but at the end of the day, what are a few less days of sunshine compared to my ability to really live true to my values? Where would I rather raise my children and build out an extended family?

It will be a slow wind-down process. My employees are excellent people and I will not fire any who choose to remain in California. Based on some initial conversations I anticipate about half of them to move immediately and the other half to move in 2013 or look for new jobs in California. If they want to work from home once we close up shop here completely, then I would support that. I will continue to own rental property and other investments in California which I will pay taxes on. But all new hires and new investments will be made in our new home.

I didn't write this in response to any of the pro prop 30 posters. I wrote it for other entrepreneurs like me (you know who you are). At the end of the day, we're the ones who provide innovation - where we choose to do that matters - and that choice is ours. Good luck.