Over the past decade, the United States has experienced taxpayers fleeing from high-tax blue states to taxpayer-friendly red states. California is one example of a state that attempts to “soak the rich” in order to fund costly government programs. Roughly 100,000 California taxpayers with income over $1 million collectively pay 40% of California’s personal income taxes. This group of taxpayers comprises less than half a percent of all California tax returns.
For years these wealthy taxpayers accepted the grand bargain of high taxes in return for low crime rates and beautiful weather. Eventually, the Democrats gained a super majority in the state and then the fun started. The socially conscious Democrats decided that homeless people should be allowed to live and literally defecate anywhere. These same politicians decided that robbery was tolerable and should not be punished. Surprisingly, crime rates in California exploded and the standard of living dropped through the floor.
For years these wealthy taxpayers accepted the grand bargain of high taxes in return for low crime rates and beautiful weather. Eventually, the Democrats gained a super majority in the state and then the fun started. The socially conscious Democrats decided that homeless people should be allowed to live and literally defecate anywhere. These same politicians decided that robbery was tolerable and should not be punished. Surprisingly, crime rates in California exploded and the standard of living dropped through the floor.
In today’s world, the wealthy are mobile and recently many wealthy have given up on California and begun to flee to more hospitable states. Elon Musk decided to decamp from the crime ridden west coast and moved to Austin, Texas. Many other Californian’s have followed suit and exited the Golden State. Florida has also experienced many Californians moving to our state. I am told that Governor Newsome’s in-laws escaped to Florida during the pandemic.
State Farm recently announced that it would not accept new applications for homeowners insurance in California. The reason that State Farm is decreasing its presence in California is the state’s unwillingness to allow State Farm to accurately price its risk and increase premiums to cover its increasing liabilities. These socialist policies send a clear message to individuals and businesses that they need to relocate to a more business friendly state.
This same exodus of capital from socialist states is transpiring in South and Latin America. Bloomberg News recently published a major article about wealthy residents of Latin America moving their money away from socialist countries.
Analysts have determined that more than $137 billion left South America in 2022. The level of money being moved out of South America in 2022 was up 41% from the year before.
The Elizabeth Warrens of the world may put on their Indian war paint and shout about how much they love the little guys but in reality, their socialist policies hurt the little guy just as much as the wealthy. The difference is that in today’s mobile world the wealthy can relocate to a more free enterprise friendly state but the little guys are left to cope with the economic mess created by the Democratic politicians.
Bob Spencer
Publisher
Manatee Herald
publisher@manateeherald.com
