Comment by 88913527
4 years ago
It seems doubtful people are leaving California due to jobs, taxes, and public universities, but I would certainly believe it was due to cost of living. CA is the world's 5th largest economy, the universities are world-class, and most people are unwilling to give up their family, friends and life to establish something new simply to save a few percent on taxes.
But “most people” aren’t leaving California, you need to look at the margin. A marginal mover might very well be swayed by high taxes to a significant degree. For example, when I was moving to the States, one major factor for choice of Washington over California was exactly state taxes. I also have friends who are planning their move out of California to Texas, and for them taxes also play a significant role in their choice. It’s not only taxes that made them decide to move, but it’s rarely only a single factor that makes people move.
But taxes are trivial compared to cost of living.
For example median rent in Austin is $1360 vs $4150 for San Francisco. Over 300% higher.
On the other hand, how much higher are taxes in SF? Like 10% higher at most. Completely trivial.
I get your point about marginal costs, but I think in general SF taxes contribute to making the city a more developed and attractive place to live and ultimately make people more, not less likely to move there. If the rent was the same nearly everyone would choose California over Texas.
If you’re a senior software engineer, moving from SF to Seattle will immediately increase your after tax income by $30k, even if you ignore difference in cost of living. This means effectively increasing your after tax income by 15%. That’s a huge raise.
If you make $500k, you pay ~$50k in state income taxes in CA.
That's ~$4200 per month, which does not seem trivial compared to $0 in TX, FL, NV, WA, etc.
That could very well make up a decent portion of your entire spending bill in those states - allowing you to save / invest maybe another 10-20%. This (combined with the lower cost state) could help you retire a decade earlier.
Compared to <$2k per month in GA / Atlanta, it seems like something one might consider.
3 replies →
The university system may still be world-class, but the public schools are definitely not. CA isn’t a great place to live, if you are blue collar.
This is a big oversimplification the same way that the national news is a big oversimplification.
Many of the nation's best public high schools [1] are in the Bay Area - Saratoga (#16), Gunn [Palo Alto] (#18), Lynbrook [San Jose] (#33), Paly [Palo Alto] (#34), Monta Vista [Cupertino] (#46), Lowell [SF] (#59), Los Altos (#85), Mission San Jose [San Jose] (#89), San Ramon (#96), Homestead [Sunnyvale] (#101), Cupertino (#105), Amador Valley [Pleasanton] (#112), Miramonte [Moraga] (#114), Mountain View (#121), Piedmont (#127), Foothill [Pleasanton] (#164), and this is just the top 170 out of 17,000 (1%). That's a huge portion of the region. SF & Oakland get a bad rep because a lot of their schools have legit problems and they're lottery assignment, so there's no way to avoid them other than going private. But outside of lower Manhattan, Silicon Valley probably has the greatest density of top-ranked public schools in the country, beating out even traditional powerhouses like suburban Boston and Westchester County NY.
And yes, the region is a terrible place to live if you are blue collar, but that's because blue collar people can't afford to live in the region.
[1] https://www.niche.com/k12/search/college-prep-public-high-sc...
Thank you for putting that together!
I’m somewhat surprised that the highest rated were only #16 and #18.
Virtually all of those are in elite districts. Gunn, I think, has a household income of $200K.
Only a couple of miles away is the East Palo Alto high school (a charter school!), where only 12% are proficient in math and 52% in reading[0]. That’s where the service workers live.
Overall, California ranks poorly, around #44 [1], while the New England states are in the top ten, except for the ringer Maine at #16 [1]
Blue collar can’t afford to live on the coast, but they can elsewhere.
[0] https://www.niche.com/k12/east-palo-alto-academy-east-palo-a...
[1] https://scholaroo.com/state-education-rankings/
1 reply →
That famous blue collar of Silicon Valley. If you're blue collar you couldn't afford to live in a mailbox in any of those towns. I don't know what you think has been oversimplified.
I actually have a coworker moving to California for their university system. Like taking his sophomore daughter and 4th grader and moving there.
I would put taxes in the cost of living column.
Taxes are only paid to the extent that you're making money. Cost of living hits you equally no matter how much you make. If you're making money, when it rises, you consider whether you'd rather be living in a different place for that price. If you're not making money, you leave (or the bailiffs drag you out.)
COL[1] doesn't really hit anyone directly. It's an abstraction based on some fictional "standard of living" and its costs in an area.
That said, common knowledge is that it's cheaper to be rich than poor.
[1] https://en.wikipedia.org/wiki/Cost_of_living
Does it not depend on how progressive / regressive the tax system is, and how much money the government is spending on things that do not benefit you?
Offset by quality of life represented by the spending of the tax dollars.
Does quality of life, at least among the 50 U.S. states, really track the state taxation level?
2 replies →