The rich are fleeing California. Flatter, lower taxes will bring them back

It seems eons ago that California progressives were predicting the end of Western Civilization if Congress passed the Republican tax reform bill. Similar to the predictions of doom advanced for another earth-shattering tax reform measure – Proposition 13 in 1978 – liberals just don’t understand that when families have more to spend, good things happen with the economy.

Nonetheless, there is one feature of the tax reform package that raises a legitimate concern for Californians, which is the loss of the SALT (state and local tax) deduction. Because California has the highest income tax rates in America, one of the few advantages for those with wealth has been the ability to deduct state taxes on one’s federal return. But the tax reform package significantly reduced that advantage. As a result, the federal tax reform legislation means higher taxes for many wealthy Californians as well as the wealthy in other blue states that impose heavy tax burdens.

 

Read more at the SacBee

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