Dec 06, 2011 4:49 PM GMT
It defies imagination that there remain those who believe that California can fix its problems through higher taxation or blaming Prop 13 despite their arguments having repeatedly been debunked.
If you’ve been a reader of this blog, you’ve seen me write numerous times about California’s tax and economic policies. Bluntly, if California were a corporation, it would be delisted from the Pink Sheets. (For those unfamiliar with the “Pink Sheets”, that’s the home for stocks that get delisted from the NYSE, American Stock Exchange, or NASDAQ.) Meanwhile, the only recipe that Democrats in Sacramento have is to increase taxes.
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 you may know, I’m adding a partner (Aaron Lion, E.A.). He’s based near D.C. rather than California. As of a week from now, I will have executed my own Escape from California.
Democrats in Sacramento constantly say that with all of California’s advantages (and the state does have a lot: great climate, a large diverse population, and diverse industries) that increasing taxes doesn’t impact employment. That’s hogwash. It’s driven large companies (e.g. Nissan) to Tennessee. It’s driven me to the Silver State, Nevada. Sure, I’m just one job but the money I earn goes to support others’ incomes. That will still be the case, but not in the Golden State, California.