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Comment by civilized | Hacker News Reader

> California’s heavy dependency on tax payments from the rich and on the continued strength of the tech economy makes the state highly vulnerable in the event of a significant slowdown

I thought we just spent like a decade poring over charts showing how the rich are least affected by any downturn.

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Because the whole "the rich" are 2 different things:

1) the superrich, couple thousand in the whole of the US, who indeed essentially set their own tax rate. This is what everyone likes talking about. Needless to say, they're not the source of tax revenues, and they're NOT who government is talking about when discussing "raising taxes on the rich"

2) the "rich" as in double US average income or more. Anyone making 100k or more. Most California cops fall under this definition. These are people who will see their taxes raised, who pay for the state. This is who the government is talking about when discussing taxes.

You're talking about group 1. "Tax payments from the rich" is talking about group 2.

If you work in The Bay, Los Angeles, or San Diego - $100k is not far from the median.

One of the strangest things about CA is that people aren't aware that incomes are actually quite high. Everyone thinks they're crushing it and wonders why they aren't. It's because $100k is far from rich - it's close to the median.

$200k for a HH won't even put you in the top 10% in some pretty large areas of the state.

Not making a statement on what the true facts are, but I don't see an a priori contradiction between these two statements. People who are rich have wealth, and are therefore less reliant on their transient income. But income taxes target income, not wealth.

it depends on who "the rich" are

but there is a decent sized subset of California that is insulated from the "problems" of California. they are insulated from the famous tax rates, do not rely on employment income, are not subject to the compliance burdens of being an employer, have inherited low property taxes or only rent, and can leave at a moment's notice.

this part of the population of California is large enough to vastly distort the rental or property market wherever they go to.

There’s so much bloat in the California government that they’d be fine. Especially when you consider the large reserves of many governments. My municipality has 10 years of operating expenses saved up in treasury bills

the rich (income) can move out state if mistreated, expecially once RE & Tech & whatever "advantages" dry out.

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