Comment by xyzzyz
4 years ago
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.
> That's ~$4200 per month, which does not seem trivial compared to $0 in TX, FL, NV, WA, etc.
But you'll have a much harder time finding that 500K job in TX, FL, NV, WA.
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