Will regulations lead to a California tech exodus?
MarketWatch Technology Editor Jeremy Owens on the push for big tech regulations in California and concerns over Huawei.
When California raised personal income taxes in 2012, the state inadvertently caused wealthy residents to move out-of-state at an “abnormally high” pace, according to a new study.
Continue Reading Below
According to the 74-page report published by the National Bureau of Economic Research and authored by Stanford University economists Joshua Rauh and Ryan Shyu, the tax hike in 2012 caused 0.8 percent of Californians who were in the top tax bracket to move in 2013, mostly to states with zero income tax (including Washington, Texas, Nevada, Idaho and Colorado).
MORE ON FOXBUSINESS.COM…
The authors analyzed taxpayers earning more than $5 million in 2012, and found that departures spiked to 2.125 percent in 2013, compared to 1.5 percent in 2011. On the other hand, moving rates for taxpayers earning under $2 million were “negligible.”
“The fact that the effect increases with income is consistent with the established theory that average tax rates matter for extensive margin individual location decisions,” the authors concluded.