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Justin Fox

Wait, California Has Lower Middle-Class Taxes Than Texas?

Ultra-high earners can cut their tax bills a lot by moving from a high-tax state to a low-tax one. For most other people, that's not at all a sure thing.

A tale of two tax rates.

A tale of two tax rates.

Matt Nager/Bloomberg; David Paul Morris/Bloomberg

A lot of people left California for other states over the past decade, with 912,038 more going than coming from 2010 to 2019, according to Census Bureau population estimates. Who was leaving? Mainly those without college degrees and with middle to lower incomes, the Public Policy Institute of California calculated recently on the basis of a different Census Bureau data set. Here’s the breakdown by income:

I would not take this to mean that all is well with the state. An exodus of people with lower and middle incomes is not a good thing, and the net inflow of those with higher incomes slowed over the course of the decade. The data also don’t cover the upheavals of 2020, and there’s statistical evidence that out-migration from California accelerated last year as well as lots of anecdotal evidence that high-income people were among the emigrants.