California Is Chasing Wealth That Has Feet
California's high taxes, heavy regulations, and high cost of living are driving wealthy residents and businesses to relocate to lower-cost states, eroding the state's tax base and economic dynamism.
Background
- California has been bleeding residents and businesses to lower-tax states like Texas, Florida, and Nevada for years — a trend that accelerated during and after the pandemic.
- The state's top marginal income tax rate (13.3%) is the highest in the U.S., and its regulatory environment is often cited as costly and unpredictable.
- "Wealth that has feet" refers to mobile capital and high-income individuals who can easily relocate. The piece argues that California's tax policies chase this mobile wealth, but it keeps leaving.
- This is part of a long-running debate in state policy: whether high taxes and generous public services drive away the economic base that funds them, creating a vicious cycle.