California has high taxes, but rich not leaving
Very much like the Wall Street Journal article mentioned in my previous post, there’s a NY Times article today about how California has the highest state taxes in the nation, and Governor Rick Perry of Texas is saying that Californians should move to Texas to escape the taxes, but the article doubts that rich people are going to move.
“I am happy to pay my taxes, whatever they are: no problem with me,” said David Geffen, the entertainment mogul, who owns estates on the oceanfront in Malibu and on the hedge-lined streets of Beverly Hills. He said he thought it could hurt the business climate, but added, “I don’t think anybody of means is really going to move because of it.”
What’s between the lines is that the vast majority of rich people would rather pay high taxes than have to live in a state full of rednecks and Jesus freaks.
Lion of the Blogosphere 
I think there are a lot of rich people still moving to Florida. I know a bunch of fairly wealthy people in Ohio who set up residence in Florida for at least a few years. Some now split their residency, making sure to stay in Florida six months and a day, while some have decided they would rather pay the Ohio taxes and be close to their businesses.
The key is that parts of Florida, such as Naples, have lots of rich people. Rich people like being around other rich people.
Also, the thing to remember is that these changes tend to happen very slowly. It’s difficult for people to just sell their houses. But taxes in California and Illinois are going to continue to climb, and eventually it’s going to wreck the economy and make both states unpleasant places to live.
So I can see how people would avoid living in states full of “rednecks and Jesus freaks.” But there are some low-tax havens out there that are pretty nice places to live. They aren’t New York or L.A., though.
ColRebSez
February 6, 2013 at 11:25 PM
One additional item. You might want to read this National Review article by a northerner who moved to Oxford, Miss. Also, just type Oxford, Miss., into Google images. What more could you want? And there are lots of neat places throughout the South. I will admit there are some pretty awful ones, too, particularly for someone from an urban area.
For those of you not wanting to bother reading the article, I’ll point out that Habeeb lives in a house that is valued at $400,000 (or it was when he bought it!) and he pays just over $2,000 a year in taxes. I looked his home up on the assessor’s site and he has about 3,200 square feet on almost 2 acres, He says his parents pay $12,000 a year in taxes in New Jersey for a lot less house on no land (down here, unless we are in the middle of town we tend to have 3/4- to 2-acre yards).
http://www.nationalreview.com/articles/278596/southern-me-lee-habeeb?pg=1
ColRebSez
February 7, 2013 at 12:49 AM
“Also, the thing to remember is that these changes tend to happen very slowly. It’s difficult for people to just sell their houses. But taxes in California and Illinois are going to continue to climb, and eventually it’s going to wreck the economy and make both states unpleasant places to live.”
Get real. Have you looked at housing prices in California?
Yes taxes are high, but lots of other things are way more expensive than the taxes.
http://www.zillow.com/homedetails/937-Cottonwood-Dr-Cupertino-CA-95014/19639308_zpid/
A 50 year old, 1201 sq ft, 3 bed, 2 bath single family home in Cupertino, CA for only $1,068,000.
If you can afford to buy a house in California, slightly higher taxes are not a big deal. The really rich can easily afford to live in California. If you are middle class, you need to have had the foresight to buy your California home in the 1970s.
mikeca
February 7, 2013 at 3:20 AM
Rich people don’t actually pay those high taxes because much of what they have or earn is not taxable at the higher rates or they take advantage of loopholes. Duh.
Places like Texas are higher tax states for the rich because Texas actually collects the taxes it imposes and Texas taxes spending and wealth, not income. California has high published rates of income tax. That doesn’t mean they collect it. People moving up the ladder pay high taxes and high rent/mortgage but people who have money already are paying less. Rich people who are not working are paying relatively very little tax in California.
not too late
February 8, 2013 at 12:02 PM
What’s between the lines is that the vast majority of rich people would rather pay high taxes than have to live in a state full of rednecks and Jesus freaks.
Well that was true in the past. But with racial “diversity” now reaching critical mass we can now expect the steady outflow of whites, from high to lower class, reach tidal wave proportions of white flight from the entire state.
The Undiscovered Jew
February 6, 2013 at 11:32 PM
People in the Geffen league stay in CA because they are SO RICH that the high taxation does not alter the rarefied air they breath and the the gated and guarded security in which they live. Plus, California is still the major hub for their business whether it be in entertainment, internet start-ups, medicine, etc. It would make no sense for people like that to leave LA or SF and move to Houston or Dallas.
fakeemail
February 6, 2013 at 11:32 PM
Texas is a pretty big hub for medicine — MD Anderson in Houston is the biggest cancer center in the country, and one of the top two, in terms of reputation, along with MSK in New York. Houston, of course, is the world capital of energy tech as well, and is a leader in aerospace. Austin is an up-and-coming Internet city too; South By Southwest Interactive attracts a who’s who from Silicon Valley and New York every year.
DaveinHackensack
February 7, 2013 at 7:46 AM
This was my thought too. I would like to see statistics about how many 1%-ers are leaving CA. Say people making 250k +.
steve
February 7, 2013 at 1:44 PM
The super-rich like high taxes because it prevents other people from becoming rich and thus threatening their status.
David Geffen has no interest in other people being rich. They would just bid up the prices of art works he wants and the price of his party drugs for his stable of 17yo run aways.
Lion of the Turambar
February 8, 2013 at 10:11 AM
I’m fairly certain that the folks in flyover country are perfectly fine having rich, homosexual, left leaning entertainment moguls live elsewhere.
The goal of red state tax policy does not appear to be to lure the monied whales to the heartland but rather to indulge in the Galt’s Gulch fantasy of the local electorate.
High Prole & Proud
February 6, 2013 at 11:37 PM
Well rednecks are more pleasant neighbours than Guatemalan gangs.
But of course the rednecks regard themselves as (!) equals to the big fishes. While the Mexican hordes will always defer to sahib. It’s a very nice arrangement to be reminded every second of your life of your superior status. No amount of taxes can destroy that little pleasure.
spandrell
February 6, 2013 at 11:38 PM
David Geffen is not typical. He’s a billonaire, and even among rich people who are not billionaires, there is a certain strata that can’t spend all the money they have. For them they can just pay and live in California. For others, who aren’t tied to their Malibu estates, there are other options. And yes, it may take a few years but the push will be there.
thrasymachus33308
February 6, 2013 at 11:40 PM
how much in taxes does Geffen actually pay? Moguls like him have armies of tax lawyers and a million ways to shelter their wealth. it’s the social climbers who pay high taxes (the top 10%), not the top 1/100 of 1% like Geffen or Buffett.
Jimbo
February 6, 2013 at 11:41 PM
Those armies of tax lawyers cost money too. They can pay the taxes or pay the lawyers, but they still pay.
D.H.
February 7, 2013 at 9:15 PM
If you live on the California coast, then it is unlikely you will move to a flat, hot & humid place like Texas that is full of Jesus-freaks, so this article doesn’t surprise me. Taxes would have to skyrocket to confiscation levels in California before the rich would consider abandoning the California coastline. The weather and beaches are just too nice to leave for a shithole like Texas.
That is why most of the people leaving California for Texas are lower middle class or middle-class folks seeking jobs and/or a cheaper cost of living.
Jay
February 7, 2013 at 12:01 AM
Texas: “shithole”? or utopia?
DaveinHackensack
February 7, 2013 at 7:43 AM
I’ve been to Texas, and it is for the most part a shithole. The only nice area of Texas is the Austin area, which is why so many Californians relocate there.
Jay
February 7, 2013 at 11:23 AM
A little of both, simultaneously.
T
February 8, 2013 at 4:20 PM
The jillionaires don’t give a shit about taxes. There’s not a whole lot of money available from the jillionaires though, so they pretend people making $250K or more are ultra rich Rockefellers and tax them too. They are the ones that leave, not the tycoons of the world.
And no, the David Geffens of the world want nothing to do with Redneck Jesus Freaks. They want to live like medieval nobility.
Some Guy
February 7, 2013 at 12:08 AM
I live in San Jose and I’m staying for the weather and the fact that you can surf and ski during the same three day weekend.
paleopaleo
February 7, 2013 at 12:23 AM
California has sun, beach, mountains, it’s not a bad place to live if you can afford it and you can live isolated from the riff raff. The Mexican invasion is a plus for the very rich, more cheap maids and gardeners. High taxes and immigration are more of a problem for the middle class, who eventually have to leave to other states.
zenocosini
February 7, 2013 at 12:26 AM
Yeah, Florida is loaded to rednecks. Rich people want to live in places with beaches, warm weather, hot girls, and places to spend all their money. If California wasn’t a place of sun and surf they would move where it was.
asdf
February 7, 2013 at 12:27 AM
I missed the part when the entire country is supposed to bow to whatever the rich want. I also missed that part of the Constitution. They can go Galt and go f@#k themselves.
Dr. Grzlickson
February 7, 2013 at 12:27 AM
Mega rich not leaving because as usual they can meander their way around it.
The productive ‘rich’ (ehh maybe upper-middle class, not necessarily rich) will be forced to leave eventually.
Just depends how long they’re willing to hold on to that inferior quality of life.
It’s incredible how much my family’s quality of life has improved ever since we moved from NJ to Georgia, in a better neighborhood as well.
Kaz
February 7, 2013 at 1:22 AM
California can command a premium because of its Mediterranean climate, girls, and rich & famous residents. What does Texas have that’s comparable to Malibu or Santa Barbara or La Jolla? The main problem with California, especially southern California, is the congestion. Living in Malibu sucks if you ever have to go anywhere between 9 and 6.
Vince, the Lionhearted
February 7, 2013 at 1:49 AM
From wikipedia:
Geffen was the Broadway backer for the musicals … Cats
Toad
February 7, 2013 at 1:55 AM
I wonder what Geffen’s tax rate is?
By “whatever they are”, I suppose he means is “whatever my accountants and lawyers can screw it down to”.
ntk
February 7, 2013 at 2:01 AM
Also lets say that people do move across state and national borders in order to seek out lower taxer. Lets also say that it is rational for a country or state to lower taxes because the influx of existing wealth across borders is higher than the wealth that could be crated by the policies allowed by taxes. All that does is create a race to the bottom where every state and country moves towards collecting the bare minimum of taxes required to allow government to protect existing wealth but no spending on policies that allow the creation of new wealth. You just have states and countries fighting a zero sum game over existing wealth rather than positive sum game fought over who can create the most of it.
So even if conservatives are right about people fleeing taxes it’s an argument for collective action on the part of nations and states, not an argument for lower taxes.
Reynald
February 7, 2013 at 2:11 AM
“So even if conservatives are right about people fleeing taxes it’s an argument for collective action on the part of nations and states, not an argument for lower taxes.”
Texas has lower taxes partly because government doesn’t blow money on stuff that doesn’t increase the ability to create wealth nor improve quality of life. California wastes tons of money pouring it down holes. Look at all the $$$ they spend on schooling to get lower performance than Texas gets for less than half the cost. Massachusetts does slightly better than Texas on scores but spends almost twice as much to get just a few more points. Texas seems better at knowing when it has hit the point of diminishing returns. This is not an argument for living in Texas because the weather is awful. It is an argument for a rational policy of public spending for public goods. LA school district pays $27k per student per year and only had a graduation rate of around 50%. Texas figures that $10k per year is more than enough to make a good faith effort. If more spending doesn’t get you anything, then don’t spend more. Which brings us back to lower taxes. If you aren’t spending more than you need to, then you don’t have to have crazy high taxes.
not too late
February 8, 2013 at 6:35 PM
“All that does is create a race to the bottom where every state and country moves towards … no spending on policies that allow the creation of new wealth.”
What policies are those, more precisely? Light rail?
Glengarry
February 10, 2013 at 8:10 AM
Every place in the world is wonderful in some way but for the most part you are putting up with something. It might be brown slush accumulating in the wheel well or it might be prickly heat, or mosquitos flying in your ear. It might simply be the bleak early sunsets that more northern places experience. California has none of this (unless you go looking for it), California is thoroughly pleasant. The weather and geography are simply a miracle. This cannot be stressed enough. People who have only visited for a conference will think that I am exaggerating. I am not. Rich people will always want to live in California, regardless of the demographics or politics of the place.
T
February 7, 2013 at 2:14 AM
amen. You can bring many things in this world to wherever you are if you are rich enough, but you can’t do that for weather or geography. You have to physically move for that. Until artificial weather machines and easy terraforming are the norm.
uatu
February 7, 2013 at 8:45 PM
Yeah, Greece is like that, too. Just lovely. Crete is a lot like California. Beautiful weather. Delightful.
not too late
February 8, 2013 at 6:38 PM
Rich people don’t care what type of common people live in the same state as they do. Whether they are poor blacks and Mexicans or rednecks and Jesus freaks, rich people are going to be isolated from them in any case and are going to live in enclaves with other rich people.
There are certain nodes around which rich people want to live; NY, LA, SF, or just a cluster of rich people. No rich person is going to want to live in Nebraska just to get some lower taxes and then commute to charity events in LA.
Where the tax rate does matter is when it concerns estate taxes. Once you get out of the Gates / Buffet stratosphere, wealthy people generally want to pass their fortunes down to their children and not to the state. Normally in the US these taxes are at the Federal level but several states also have death taxes. These taxes could indeed convince a wealthy person to relocate their official residency in order to avoid making their children pay up.
Torn and frayed
February 7, 2013 at 2:37 AM
No, what’s between the lines is that taxes are another weapon in class warfare of upper and lower vs middle.
Steve Johnson
February 7, 2013 at 2:37 AM
Rich lefties would fit in culturally in Austin, Texas. Ann Coulter once described it as the Upper West Side, with better looking people.
Incidentally, former Reagan advisor Art Laffer actually ate his own dog food and left California due to its high taxes. He lives in Tennessee now.
DaveinHackensack
February 7, 2013 at 2:45 AM
I used to lived in Austin. There are a lot of people from California there. Arguably they “ruined it” (made it really expensive and generic).
albert magnus
February 7, 2013 at 8:04 AM
What kind of tech operations are in Austin? Genuinely curious as I don’t know much about Austin besides UT-Austin, SXSW, and the new F1 race. Hoping to go to the F1 down there for the 2013 season.
I know a lot of tech companies have offices there but what part of their operations do they house there? Are Silicon Valley and Seattle tech companies using austin to move their ‘low and middle level engineers, other support employees’ operations to a lower COL area while keeping higher value employees at HQ in the valley/seattle?
uatu
February 7, 2013 at 9:02 PM
Apple developer support is in Austin.
DaveinHackensack
February 8, 2013 at 12:42 AM
Dell’s headquarters are there plus there are a lot of smaller companies.
T
February 8, 2013 at 4:24 PM
I don’t think so. The super-rich know how to avoid taxes, and thus can live wherever they want. It’s the “comfortably well-off” who get crushed by taxes like California’s.
California is glorious, but it is being ruined. The nice enclaves that remain grow more and more expensive and exclusive every day. It’s not the taxes that are driving people out, but the decline in the quality of life. Most middle-class Californians can’t afford to move to a neighborhood better than the one they’re already in, so when their neighborhood starts to tank they increasingly move out of state.
Seattle exploded in size (and wealth) in the 1980s because of all the Californians who moved north.
Rich (but not super-rich) professional athletes are smart to minimize their tax obligations by moving to places like Florida (as Tiger Woods did).
Thanks to the oil industry, there is an immense amount of money in Texas. There is no shortage of rich people in Houston.
The national media are based in New York and Los Angeles, so the judgments of people living in those places filter into our collective psyche. The upper classes are not immune from those judgments, but I suspect that it is mostly the middle and upper-middle class-obsessed types who give any thought to avoiding “rednecks.”
The self-made super-rich are interesting in this regard. They seem to stay home. Warren Buffet still lives in Omaha. Bill Gates still lives in his hometown of Seattle. Steve Jobs stayed in his little corner of the Bay Area. Sam Walton stayed in Arkansas.
Olivine
February 7, 2013 at 2:52 AM
How do you know Buffett doesn’t spend a good chunk of his time at his place in Laguna?
helene edwards
February 7, 2013 at 1:43 PM
If I had to live in Tx, I would pick Houston. Have heard lots of great things about it.
uatu
February 7, 2013 at 9:06 PM
Ellison, Bezos, and Zuckerburg moved. None of those are originally from CA or Seattle.
uatu
February 7, 2013 at 9:09 PM
I’ve read Houston actually has a lot if French culture – bakeries, language schools, etc. – lots of French ex-pat oil execs live there, apparently.
DaveinHackensack
February 8, 2013 at 12:45 AM
The superwealthy (bourgeoisie) can afford to live in California and New York. A lot of small business owners (petite bourgeoisie, if you will) are becoming increasingly fed up with the ever more stringent tax laws. Much of the interior now looks a more favorable place to do business, than in the elite but staid, crushingly expensive blue coasts.
I may be wrong, but I expect that the red states will become less outspokenly Christian as time passes. Consider the Culture War: doesn’t the right seem more on the defensive than before? In the past, the “Moral Majority” spoke of remolding the rest of America into a more Christian image. Now the Tea Party, even when they are avowedly Christian, focuses more on financial and economic issues. In the 80s, being tolerant of homosexuality made you remarkably liberal. Now, being tolerant of homosexuality while still finding it disgusting makes you remarkably conservative. The blue states may still perceive red states as being unabashed Jesus freaks, but it seems like the red states are meriting that stereotype less and less, in increments at least.
Sid
February 7, 2013 at 2:58 AM
it seems like the red states are meriting that stereotype less and less, in increments at least.
I don’t know about that. Most people everywhere still find homosexuality odd and slightly disgusting – they just won’t say so. Once it becomes allowable again to say so, people will.
Samson J.
February 7, 2013 at 9:16 PM
The rich aren’t leaving, but the businesses are.
brett
February 7, 2013 at 3:38 AM
In fact, this is what matter. The very rich people stay, but their businesses are moving out and not in.
I saw this happening in the past: in N-E Italy, local little/medium industrialists raised the place from a poor backward to an economic miracle (often with their own capital). As the place become more and more socialist (high taxes, stupid laws, bureaucratic madness, etc.) they started to open new shops in Romania (because of cheap labor and low taxes). Then as things started to go south, they stopped to invest in their native N-E Italy shops and continued to invest in their shops in Romania.
Today, many are closing their shop here in the N-E of Italy (because they are unprofitable) and moving where their actual business are: Romania (or others places in the East Europe).
Many are marring there because law and women are reasonable and not exploitative as in Italy.
I bet this is what is and will happen with California.
California was made great by immigration from other places of the US (during the Great Depression) and by immigration from abroad in the same period.
The same people will make some other place wealthy and rich. And maybe they will learn to keep socialist out.
Mirco Romanato
February 16, 2013 at 10:02 AM
California has plenty of rednecks and Jesus freaks. In Texas, however, they run the state and are the majority.
California also has lower property taxes than Texas by a large margin. This is a great benefit to long time residents especially, the longer you stay here the lower your property tax goes as a % of its value. The weather is also much better and the environment cleaner and more beautiful.
Pillow
February 7, 2013 at 6:35 AM
They aren’t the majority. They are majority of the white population and arguably part of the Hispanic population (Texicans are kind of redneck-y, but only sort of). They just control the political system which is rigged to high heaven.
albert magnus
February 7, 2013 at 8:07 AM
California also has a lot of places that aren’t particularly scenic or pleasant (e.g., the Central Valley). Not everyone lives on the coast.
DaveinHackensack
February 8, 2013 at 12:47 AM
Agree with the remarks about California being beautiful. Texas has a lot of beautiful places too, but they’re not as concentrated (it’s about 4X as far from beach to mountains).
I disagree on the environmental statement; California does not have a cleaner environment than Texas, particularly in terms of air quality. Even Houston, which I think is the oil refinery capital of the planet, has a better EPA air quality rating than the Silicon Valley area.
The rednecks and Jesus freaks running Texas seem to be doing a pretty good job; the socialists running California don’t.
J1
February 8, 2013 at 6:02 PM
I drove through Texas, half the state smells from oil refineries. Horrible.
Lion of the Blogosphere
February 8, 2013 at 6:40 PM
“high taxes”… no quite. Yes California has high income taxes, but it has grandfathered-in extremely low rent-control-type property taxes. If you have a house since the 1970’s your taxes can’t go up more than 1% per year, way under the inflation.
So, already established people don’t leave. But the skilled young may think twice, and prefer another state. The discrepancy between the property taxes (or lack of) and income tax is increasing slowly every year.
C
February 7, 2013 at 7:22 AM
“If you have a house since the 1970s”… how many people posting here have been in the same house for 30+ years? How many people in this country?
I’m not sure exactly how Cali’s property taxes work, but being in the same house for 30+ years is less of a factor than it’s ever been. We move too much.
BikerDad
February 11, 2013 at 7:20 PM
I suspect that many of the alleged wealthy in California actually manage to spend more than 50% of their time outside of the state. I remember reading that Oprah Winfrey has staff who managed where she will be every day for tax purposes. It may be cheaper to fly into California for a day meeting and fly out rather than live there.
And how many of the uberwealthy really ever go surfing or to the beach? I thought they jet setted around the world to better beaches.
superdestroyer
February 7, 2013 at 7:55 AM
But where is Oprah when she’s not in California — Illinois and New York, right? That’s three states with high income taxes.
DaveinHackensack
February 7, 2013 at 7:53 PM
[…] couple of recent posts by TLOTB have drawn my interest. He is focused loosely on the battle between California and […]
Beautiful States and Ugly States « Gucci Little Piggy
February 7, 2013 at 8:00 AM
The already rich are staying in their dying blue states. The future rich move. Just about everyone I’ve met in NC is a transplant who will some day be rich but couldn’t afford the lifestyle elsewhere. More important than the income tax is the corporate taxes though. California chases off any non-favored industry, so unless you’re getting rich through the film or tech sectors, gtfo.
Jeff
February 7, 2013 at 8:31 AM
“Just about everyone I’ve met in NC is a transplant who will some day be rich”
Really? Just about everyone? Either you move among a pretty exceptional crowd, or your acquaintance are very deluded about their prospects. Most people, even talented bright hardworking people, will never become rich.
Peter the Shark
February 8, 2013 at 3:52 AM
I suppose I move in an exceptional crowd – mostly engineers and bankers. Compared to the folks I know back in NY though, the people I know down here will almost certainly be more successful and wealthier (most of the people I know from NY are doctors and lawyers, which are both on the downward trend as far as salary goes).
One thing people forget about the high-tax states is that they tend to be high cost of living too. My family is single-income and still saves money each month and we own our own (somewhat large) home in a good school district. If I’ve picked up on anything from reading LotB, it’s that wealth isn’t just about how much cash you have. In NC we can afford to have me home raising our kid(s), teaching them about all the good SWPL values instead of having them in daycare (or raised by some third-world immigrant).
Jeff
February 8, 2013 at 9:19 AM
My old company (Fortune 1000) moved their HQ from Santa Barbara to Jacksonville, FL a few years ago. They estimate that the move saved at least $20 million per year in operating costs alone, especially considering that the local city govt in Jacksonville gave them tax breaks out the wazoo to entice them to move there.
Camlost
February 7, 2013 at 8:54 AM
Real stretch there by the media to hpone up a megarich, entertainment media mogul for the quote. Of course, he won’t move due to his industry because he needs to be close to Hollywood. Geffen beign gay also probably anchors him to California. Other commenters have mentioned this, but how many of the independent businessmen and smaller corps move because they just hit the high marginal tax rate threshold and then add in Cali’s sales taxes on a lot of what they purchase? Britain has seen an outflow of mid-level, skilled white Brits. That group was formerly referred to as the backbone of a nation.
SOBL1
February 7, 2013 at 9:02 AM
1. “Entertainment Moguls” are unlikely to leave California for obvious reasons. I wouldn’t expect that to change even if Hollywood loses influence…even in a more diffuse entertainment industry living near Hollywood would be the only good choice.
2. Very rich people are largely insulated from some of the more social disorders that afflict places like California. That removes a large part of the reason for leaving.
3. Businessmen are typically more budget-conscious than entertainment types (i.e. celebrities; Geffen qualifies as a businessman) and are more likely to leave due to taxes if not kept for other reasons, e.g. proximity to Hollywood/Wall Street.
So the rich will probably stay for a while. The middle class, however, has been slowly bleeding out and in some parts of California is all but extinct.
Matt
February 7, 2013 at 9:31 AM
my father works as an international consultant and is by no means rich, but makes about 300 K–certainly the type of person a state would want to have. As soon as my sister and I graduated college, he moved to florida. Granted, this is a more of a no brainer for him because he is overseas 10 months of the year, but there is a clear anecdote.
One of my friends parents is managing partner at a California office of a top 50 Vault firm. No one’s David Geffen rich, but the profit’s per partner are about 1.5 million. She said he is a Democrat, but because of the taxes, several partners may move to Texas.
Secondly, it is not just taxes. I go to top 10 law school, and even in preliminary discussions about where to practice, taxes make an issue. Not a lot of people went to California from our school, but even natives have used it as a consideration.
mike
February 7, 2013 at 10:38 AM
If you don’t start out practicing at a V50 NY, DC, LA, SF place (or something like DOJ honors), do you not run the risk of not being staffed/seeing the most interesting and complex deals/cases?
uatu
February 7, 2013 at 9:20 PM
The majority of people at my school are pretty short-sighted and simply care about making 160 after graduating and not much else, so that does not go into their calculus. Maybe it does, but they know deep down they are just going to work for 3-5 years and quit, so it’s not going to make that big of a difference.
Either way, I see “Lion” saying is not happening, occurring on the margins all the time.
mike
February 9, 2013 at 10:45 AM
So, what’ll happen is that the uber-wealthy will stay, the upper-middle class will leave, and you’ll have a further gap between rich and poor. Taxes go up to support the poor, and after a while that beach-front property isn’t looking as good.
Half Canadian
February 7, 2013 at 12:56 PM
“What’s between the lines is that the vast majority of rich people would rather pay high taxes than have to live in a state full of rednecks and Jesus freaks.”
I just finished college in Baltimore, MD and I’d like to move to San Francisco or Seattle (or Manhattan) when I start working. To be blunt, these cities have a more educated and skilled elite then rural areas or smaller cities, and they would be able to appreciate my abilities and use them to their fullest extent. For an elite college graduate, picking a local services firm over a top global firm like Goldman Sachs or Google would be a poor decision and would not be saved by favorable tax policies.
Alex
February 7, 2013 at 1:58 PM
Basically you are working in liberal cities where value transference is high. You put in all the work to enrich the executives and bosses. Your existence is these cities is almost meaningless, and a waste of money and time.
Just Speculating
February 7, 2013 at 8:18 PM
From his post, Alex appears to an ascetic devoted to the monastic life. It isn’t the choice that most would make. Most people try to get money and/or children. However for some devoting one’s life to mysticism is natural. His existence will be no more meaningless than an Irish nun’s.
T
February 8, 2013 at 4:38 PM
Having lived both California and Texas (for about the same length of time in each), I’ll take the “rednecks and Jesus freaks” in Texas, who were far better to me, than the pretentious assholes unavoidable in California.
And by the way, since Texas has huge numbers of newcomers, a large share of them are not “rednecks and Jesus freaks”, and indeed include a good number of pretentious assholes as well.
And that’s why Houston has a lesbian mayor and Dallas County has a lesbian Latina sheriff.
sestamibi
February 7, 2013 at 9:40 PM
The rich of California dont want to leave, understandably. The rich of the NE shitholes are apparently more eager to leave because of taxes. NY cant compete with Cali.
Mike W
February 7, 2013 at 10:45 PM
But NY and NJ populations don’t shrink because of immigration.
DaveinHackensack
February 8, 2013 at 12:50 AM
Rich people who “matter” today are primarily Bobos, as you’ve pointed out. Bobos are okay with taxes, in part because they believe in a broader duty to society as a whole and in part because some of them have so much money that high taxes don’t derail their standard of living. Most of the “rich” people who want to live in red states are people making between 100-1M$ a year and are mistaken as rich by ordinary people because most people don’t even come close to those earnings. Many lesser Bobos are in this income range too and STILL don’t care about taxes despite being the hardest hit by them. And the only major difference between East and West Coast Bobos is Easterners are Old Money and Westerners are mostly Noveau Riche. That’s why Californians are so much more conspicuous and ostentatious in their tastes than Bostonians and Nutmeggers in New Canaan. They’re also less genteel.
A Republican friend once, after the election said “takes all that red to pay for the blue” but on the national scale it’s the other way around. The richest Americans pay a lot of taxes, not enough in my opinion but a lot, and give to foundations, and they for the most part, live in blue states. Most of the major economic hubs in the US are in blue states. Even economic powerhouses in red states like Dallas and Atlanta are still far bluer than their surrounding areas.
Living in a blue place is already seen as a mark of class, provided you’re not on welfare. I suspect that divide will get even stronger as job opportunity shrinks and air travel costs rise… meaning more and more people without money will have to stay wherever they are.
lesocialcritique
February 8, 2013 at 4:21 AM
Tiger Woods left California a decade ago. Phil Mickelson will likely do the same. Most professional golfers, tennis players, Pro Wrestlers, NBA/NFL stars, NHL stars, independent authors, the rich but not Buffet-rich, live in Florida and Texas due to taxes. Its their money, they figure, they travel/work all over the world, they avoid taxes. See Sean Connery, the Bahamas.
Likely more and more businesses that don’t need access to VC and people out of Stanford and Berkeley will be moving to Texas, Florida, and places like them. This would include biotech firms, small manufacturing firms, and the like. For the latter, energy prices are likely to be the key determinant: PA, OH, ND, SD, and Texas being in the lead with cheap fracking gas and oil.
Globalization means a place like London, or Paris, or Singapore, doesn’t matter as much anymore; if you’re flying around, managing complex global supply chains, and seeking efficiencies in energy costs, labor costs, and the like. The idea of place, that NYC/LA/SF/Seattle are important, is likely to die under globalization. Meaning low costs, including taxes/energy/land/security, are going to be paramount.
whiskeysplace
February 10, 2013 at 2:40 PM
NYC has a lot wealthy foreign nationals with pricey apartments that the average NYer doesn’t own.
Just Speculating
February 10, 2013 at 3:03 PM
[…] people in California may not be quick to leave the state for Texas. According to The Lion, the vast majority of rich people would rather pay high taxes than have to live in a state full of […]
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