The socialist state of California is facing a catastrophic loss of $350 million in tax revenues due to an exodus of high-income earners. Unsurprisingly, the state’s oppressive personal income tax rates and unreasonable cost of living are driving residents away in droves. As a result, there is an alarming outflow of these job creators, which could cripple key sectors of the state’s economy.
Furthermore, this mass migration threatens the state’s already shaky fiscal outlook, as it struggles with a daunting deficit of $32 billion. Despite offering world-class universities, stunning landscapes, and a booming tech industry, California’s toxic policy environment is poisoning the well of prosperity.
— WindTalker (@nmlinguaphile) July 31, 2023
Regrettably, it appears that states led by conservative governors are reaping the rewards of California’s self-destructive policies. With a net loss of $343.2 million, California has the ignoble distinction of being the worst state experiencing a net negative tax income migration. In second place is the once-great state of New York, which lost $299.6 million due to similarly draconian policies. Meanwhile, conservative havens like Florida and Texas have experienced the greatest influxes of high-income earners, leading all other states in positive tax migration.
The situation in California is dire. The exodus of high-income individuals will have a devastating impact on the state’s real estate market, particularly the luxury segment, and could harm the commercial real estate sector as well. Moreover, California risks losing the vital entrepreneurial energy and business expansion that these high-income individuals often bring along with them. Left unchecked, this could cause a crippling long-term economic decline.
Despite this crisis, Democratic Governor Gavin Newsom is oblivious to the danger lurking around the corner. Rather than acknowledging the real issue at hand, Newsom has spent his time attacking conservative states like Florida, showing his hypocritical disregard for basic economic principles. The fact remains that his failed policies, combined with his party’s socialist agenda, will continue to drive individuals and businesses away.
The stark reality is that Newsom is running out of time. California enjoyed a temporary budget surplus of nearly $100 billion last year, thanks in large part to federal coronavirus funds signed into law by President Joe Biden. Yet, with the potential danger facing California, the state’s economic fortune will take a turn for the worse if Newsom does not take urgent action to address the root cause of this crisis. It’s time for Newsom to recognize the magnitude of the problem and start taking the necessary steps to reform California’s policy framework before it’s too late.