Higher-income people are fleeing California to live in lower-tax states.

For years we denied that. Maybe it didn’t even happen. But that’s for sure now.

It makes sense given our high taxes, high housing costs, and high cost of living, period. And there is new evidence for that.

The Public Policy Institute of California reported in March that higher-income earners were moving out of the state. I wrote about it. Later, the institute’s researchers dug deep into the data and saw where they were going.

The more income the departers had, the more likely they were to move to no-income-tax states.

Our findings suggest that taxes may be a factor in where higher-income people go when they leave the state, PPIC demographers Eric McGhee and Hans Johnson wrote in their recent report.

The eight no-income-tax states drew greater net outflows of higher-income migrants than middle- or lower-income California residents, while the opposite was true in the other 41 states. There is evidence that some of the very highest income households have moved out of the state to avoid income taxes.

Perhaps they leave not only to avoid California’s highest state tax (13.3% at the top rate), but other state taxes as well. Were a high tax state, a fact everyone knows except apparently Gov. Gavin Newso

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denied Tuesday that California is a high-tax state. That’s actually what he said in a conversation with NBC’s Stephanie Ruhle at the Milken Institute Global Conference in Los Angeles.

Ruhle asked the governor, Why should people be in this state in exchange for high taxes and wildfires and floods and some natural disasters and great weather and great basketball?

California is not a high-tax state, Newsom replied, addressing the audience. And I know you’re going to roll your eyes. It’s for you, but not for 99% of the others.

There is a lazy scholar that California is a high tax state.

Newsom said there’s a new in-depth analysis that he hasn’t determined California is

9th ninth

-most tax-friendly state for the middle class.

I’m not a tax and spending liberal, he insisted.

I’m not sure what counts as middle class income in this expensive state, but a single filer pays a 9.3% tax rate with a taxable income of about $66,000. A married couple earning about $133,000 will pay the same rate. That’s the highest rate in the nation for those earnings.

And it’s not just the top 1% that feed the treasury. The top 20% with incomes over $119,000 pay 91% of state taxes, according to the latest 2021 data.

Our combined state and local sales tax rate averaging 8.8% is the seventh highest in the country.

California also has the highest gas tax in the state.

And California ranks No. 2 slightly behind Vermont for the state’s per capita tax collection of $6,325, according to the Tax Foundation, a Washington-based research group. That’s hardly tax-friendly for the middle class.

But taxes are not the main reason for California

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ians are leaving the state, according to the PPIC researchers. His high housing costs.

Once someone decides to leave California because of home prices, the dominant factor, taxes can play a role in where they go, Johnson says.

One of the things about moving out of California is that you can move to almost any place and it becomes cheaper to live.

People often move to nearby states such as Nevada, which has no income tax, or Arizona, where the top tax rate is only 2.5%. Or Oregon, which has no sales tax.

The largest number of California residents leaving, more than 80,000 in the past two years, have moved to Texas,

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PPIC found. Texas has no income tax.

Republicans and non-partisan voters have a slightly higher tendency to leave the state, McGhee says.

Democratic rule must be the last straw for some and they go to red states like Texas.

But taxes and political ideology are likely tertiary factors, Johnson says. Housing is primary. Jobs and family are secondary.

The Newsom administration reported on Monday that the foray into California continues and that our population on January 1 fell below 39 million for the first time since 2015. It peaked at 39.6 million in 2020. The latest count is 38.9 million.

Only 12 of the 58 provinces did not lose a population by 2022.

People continued to move from expensive coastal areas to the more reasonably priced inland areas, especially the Central Valley.

The population of Los Angeles County fell by 73,293

people

still less than 1%.

State finance spokesman HD Palmer said the two main reasons for the statewide population loss were continued low birth rates, the onset of baby boomer deaths, and a slowdown in domestic and foreign immigration.

But the population fell less than last year, so the administration hailed that as good news.

California will regain residents within 18 months, predicted chief demographer Walter Schwarm. That’s because birth rates and foreign immigration are rising, he said.

Should that be good or bad news? In the next drought, more people will clog highways and gobble up scarce water.

For the first time, the state reported not only the number of California residents, but also new homes, an indication of the sensitivity of this hot political issue.

California added 123,350 housing units in 2022, the biggest increase since 2008, the finance department said. Among them were about 21,000 so-called

“

granny flats,

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which has made the state easier to build.

But that’s still far short of the more than 300,000 new units per year needed to meet Newsom’s previously stated goals.

The median price of a single-family home in California is now $790,000.

Between that and high taxes, it’s no wonder people are moving away.