If there's no "fiscal cliff" deal to the contrary and higher federal income tax rates return in 2013, the economists reported, California's top combined federal-state marginal rate would be almost 52 percent, even after adjustment for the federal deductibility of state taxes.It's possible that those who could afford to claim their CA home as their vacation home had already done this years ago. If that's the case, then the small business owner may be the ones to feel the effects the most. The impact could be dramatic.
That raises the possibility that while California's tax hike alone might not spark a flight of the wealthy from California, it could be the proverbial straw that broke the camel's back if higher federal rates also kick in.
How difficult would it be, after all, for the high-tech executive living in Hillsborough to declare his ski resort condo in Nevada to be his primary residence, take out a Nevada driver's license, register to vote in that state and treat his California mansion as his vacation home?
A betrayal of the state that fueled his wealth? Perhaps, but consider this: California-based Google is using a front in Bermuda to avoid taxes on billions of dollars in European income.
Sunday, December 16, 2012
Dan Walters: Will California's wealthy residents vote with their feet to avoid new income tax?
I think Dan is being a little too open-minded. The rich can easily still live in Ca but yet have their main residence in another state, thereby circumventing any and all CA income taxes.