It’s something of a tradition among super-rich Californians to occasionally emerge from their mansions in the hills, take a collective deep breath and politely ask, “WHY ARE YOU RUINING OUR LIVES WITH ALL THESE TAXES!?!?"
It’s hard not to feel for these wealthy men (it's basically always men). Leaving aside for a moment all those (actually) poor people in the Golden State, it’s tough to be rich in California. Just this year, those who earned more than $1 million had to pay out more than 50 percent of their income in federal and state taxes, a hit unlike anywhere else in the nation, according to The New York Times.
So they threaten to leave. Never mind the perfect weather, beautiful people, wonderful beaches, amazing professional networks, world-renowned food, thriving start-up scene, Disneyland, and Los Angeles Lakers, they say! We’re getting the hell out! Las Vegas looks fun! Or maybe Florida? Don't they have Disney World or something?
The only problem with these threats is that people have been keeping track of whether or not they ever come to fruition. It turns out, California was the “largest absolute gainer” of super-rich people between 2012 and 2013, according to a new report by Wealth-X, a think tank focusing on rich people, that was sponsored by UBS. In other words, the super-rich just can't get enough of California.
(To get technical, Wealth-X uses the term ultra high net worth, which is defined as having a net worth of at least $30 million, instead of the term “super-rich.” But since ultra high net worth, or UHNW as Wealth-X unhelpfully calls it, doesn’t exactly roll off the tongue, we’ll keep using super-rich here.)
Here is the chart from the report:
The statistical evidence backs up previous research out of the Stanford Center on Poverty and Inequality, which looked at a 2005 California tax increase on the rich and found the super-rich stayed put. “The highest-income Californians were less likely to leave the state after the millionaire tax was passed,” the report even said!
So one of three things is happening: (1) We all notice the anecdotal story of some bombastic rich person leaving the state while two other rich people move in. (2) Rich people as a whole are crying wolf as part of some secret club that would make for the basis of a solid Oliver Stone flick. Or (3) as New York magazine’s Kevin Roose points out, maybe they are all just really, really slow packers?
(Full disclosure: The writer is from California and will defend it to the death. He also does not qualify as a ultra high net worth individual, but there’s always hope, right!?)
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