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"FWIW, I've never actually heard anyone complain about state taxes in California or consider moving because of them."

Allow me to be the first - with both a philosophical and a practical critique.

First, philosophical: The highest marginal tax rate in California is 13.3% which, combined with the maximum marginal federal rate of 37%, crosses an anchor point, or threshold, that I mentally hold of greater than half.

You see, I consider tax rates to be largely arbitrary - I cannot affix any particular value judgement on, say, 18% vs 22% vs 27% tax rates. They seem equally reasonable, on principle ... they seem arbitrary to me ...

... until they are greater than half.[1] This is my personal feeling.

Second, a practical critique: I have no problem with high tax rates - provided I get high value for my taxpayer dollar. If the trains all run on time and the power is on and everything looks like Zurich (the Canton) then please, do indeed, subject me to high tax rates. Conversely, if things look like California circa 2022 I'd be reasonable content with (some lower, obviously arbitrary) tax rate.

As it stands, we get the worst of both worlds: relatively high (globally!) tax rates, no trains at all (never mind being on time) and spotty electricity ... among other things.

[1] Cue the misunderstood, misinterpreted retelling of sky-high marginal tax rates from the end of world war 2. These were war profiteering policies and had nothing to do with policies of progressive taxation as we think of them. It is incorrect, for instance, to compare the 95% excess profits tax of 1943 with tax rates in our modern era: https://en.wikipedia.org/wiki/Excess_profits_tax

Generally agree with most of what you're saying, it's the Tiebout model (https://en.wikipedia.org/wiki/Tiebout_model).

> The model holds that if municipalities offered varying baskets of goods (government services) at a variety of prices (tax rates), that people with different personal valuations of these services and prices would move from one local community to another which maximizes their personal utility.

My only quip is that the marginal rate doesn't apply on every single dollar, so while it's true that after a certain dollar threshold, every incremental dollar is taxed at greater than half, your net effective rate remains well below half, for whatever that's worth.

A meaningful number for income taxes is 40%. Any thing higher and you run a good chance of taking in less revenue.

It is worth mentioning that the highest income tax rate in Switzerland -- cantonal + federal -- is about 20%.

Have you tried thinking about things from a cost/benefit perspective? It's still somewhat arbitrary because you only have a rough idea of your utility function and you aren't going to run all the numbers, but it's a good framework (it also totally justifies progressive taxation because network effects of public goods and services are likely much higher if you have higher income)

> FWIW, I've never actually heard anyone complain about state taxes in California or consider moving because of them.

Because you don't know where to look, or what you're seeing.

Source: am tax lawyer. In California. Have seen and helped individuals with hundreds of millions in annual income escape to other places.

I mean your "data" will be particularly skewed towards one end of the argument seeing as you deal with people with millions and are literally incentivized to note it as a bigger problem than it is. Differences in housing and job availability are bigger differentiating factors when "normal" people decide to move.

> hundreds of millions in annual income

I've never understood the level of greed required to be that rich and be so worried about paying your taxes.

Almost everyone I socialize with (45+) plans to at least leave CA when they retire, if not earlier. A few have already left. Most have their sights set on Nevada, Texas or Florida. One of them already has property in Wyoming, just waiting a few more years. These places all have one thing in common. These are not rich people, they're all middle class working schmucks like me, who simply aren't convinced that they're getting more value for their tax dollar than they're paying.

Not sure what this has to do with my comment.

You see to have misunderstood a couple of things. Those numbers are not ”a percentage of total taxes” but are a percentage of a person's income.

Comparing per capita taxes tells you more about per capita income rather than relative taxation rates.

The whole point is that the average texan pays a higher percentage of their income in state taxes than the average californian and Texas taxes are more regressive.

Corrected! Though it's worth pointing out that the source is not correct either - the ITEP brackets are different per state - so at a given income you probably do pay less in Texas (you're just more likely to be poorer if you live in Texas).

The different tax brackets do make things more confusing, but You still seem to be looking at the data and seeing things that simply aren't there.

The numbers show that a poor person in Texas pays more than a poor person in California with the same income. The average income of the bottom 20% is 13,000 and they pay an average of 13% in total taxes for an average tax burden of 1690. The average income of the bottom 20% in California is 14,300 and they pay an average of 10.5% in total taxes for an averagr tax burden of 1501.5

Thus the bottom 20% in Texas not only make less money but then also have to pay more total taxes than their higher income counterpart in California.

For poor people Texas is a higher tax state than California.

I left California to another state because of, among other things, unfair and crushing taxation. I am a software engineer with good pay but not millions or anything like that. Nice to meet you!

> FWIW, I've never actually heard anyone complain about state taxes in California or consider moving because of them.

Howdy! Nice you meet you!

Yes, there were other factors (like general cost of living, the more interesting weather, and me liking guns and not liking California's policies regarding them), but the reduction in income taxes was indeed a motivator for me hopping the California/Nevada border.

I mean both my parents and I did. I was born in California and left all my friends and family. Simply too expensive. Too many taxes and always increasing.

My guess is that you're not spending time with the right Californians. It was a very common complaint. My best friend in high school also moved to a lower tax state.

> The report in question doesn't say whether Texans or California's actually pay more per capita - it's entirely as a percentage of the total state tax collected

The graph shows what percentage of their income people pay towards state and local taxes.

Okay, good point. But these brackets are also a bit misleading, since in the ITEP data they are relative to each state.

The lowest bracket in the ITEP data for California tops out at $23k, but it's only ~$20k for Texas. Meanwhile, the middle bracket in California tops out at $62k, while Texas it's only $58k. So again, the sales tax could be the exact same in both states, but it would show up as larger percentage of budget because people in Texas are poorer on average.

Yes, but that's the point of the article. Earning $1000 and paying $500 of it towards taxes is more regressive than earning $2000 and paying $800, even though in the second case you are paying more in terms of absolute dollars.

Phil Mickelson and Tiger Woods are an example of each. Many others, some entrepreneurs who post on HN, hopped out of California before taking a capital gain. I think that also might be why Amazon is in Washington, but possibly that was just sales tax and California’s large population.

For Amazon it was California’s sales tax.

Not specifically California’s sales tax in and of itself, but the fact that California has a huge population that Amazon would have had to collect sales tax for.

https://www.fastcompany.com/27309/whos-writing-book-web-busi...

>You moved from New York to Seattle to start this business. Why?

>It sounds counterintuitive, but physical location is very important for the success of a virtual business. We could have started Amazon.com anywhere. We chose Seattle because it met a rigorous set of criteria. It had to be a place with lots of technical talent. It had to be near a place with large numbers of books. It had to be a nice place to live — great people won’t work in places they don’t want to live. Finally, it had to be in a small state. In the mail-order business, you have to charge sales tax to customers who live in any state where you have a business presence. It made no sense for us to be in California or New York.

Pretty genius to recognize the pricing advantage from people evading sales and use tax in the cutthroat retail business which was unable to be exploited as easily before the internet.

That was the exact quote I was thinking of! I recently listened to the Acquired podcasts 4 hour long episode on Amazon.