San Francisco loses another 39,000 taxpayers

behind the news

07:00

Millennials and Gen Xers are leaving California in droves

by Joel Kotkin

Will the last person to leave California turn out the lights? Credit: Getty

Since the days of the Gold Rush, California has been a magnet for those seeking wealth. A backwater just a century ago, with a population of just over 3 million compared to nearly 40 million today, the Golden State has established dominance in everything from agriculture and movies to world travel. space and the Internet.

But new data suggests the tide may be turning and a rich hegira is brewing.

Researchers found that 39,000 San Franciscans who filed 2018 federal income tax returns left town before filing 2019 returns, taking home $7 billion in net income in one year. A report soon to be published by San Francisco Business Timessources tell me, will see a similar phenomenon in Silicon Valley.

Once able to retain its wealth, the Golden State seems to be following the course of high-tax places like New York, Illinois, New Jersey, Massachusetts and Connecticut. For years, these cities and states generated billions in tax revenue as wealthy residents fled to Texas, Florida, Arizona, the Carolinas and Tennessee. While California still trails New York State in the money-losing draw, it is catching up: in 2020, the state lost $17.8 billion in tax revenue, the loss spreading through the Bay Area, whose tech-rich economy has historically kept the state solvent. .

Remarkably, this all happened at a time when the tech economy – the driving force of the Bay Area – was at its peak, and the disruptions associated with Covid-19 and the George Floyd protests had yet to pass. produced.

The reasons for this exodus are not hard to find. We know that emigration from the Bay Area has skyrocketed since 2019, with the greatest percentage of resident loss occurring in San Francisco and Silicon Valley. Why? Because the state is becoming less and less secure. Indeed, two in three SF residents consider leaving due to crime and homelessness, with an astonishing half of San Franciscans saying in a survey they were robbed.

Those leaving were not sluggish Trumpistas or illiterate peasants (California leads the nation in illiteracy). In fact, the latest IRS data reveals that the greatest net inward migration is among disaffected 35 to 44 year olds, precisely the ages when many people are hitting their peak incomes, buying homes and starting businesses.

It shows that, for the first time in its modern history, California is no longer a beacon for the young and ambitious. The state has become the incubator for some of the worst political trends of our time – affirmative action, climate hysteria, identity politics – and it shows no signs of turning away from them. Slowly but surely the state will essentially be one big retirement home. If things continue like this, it’ll be time to throw away the surfboard and get a walker – if we can still pay our bills.

About Dwaine Pinson

Check Also

Are tech layoffs bad for San Francisco businesses? – NBC Bay Area

Several small business owners in San Francisco are worried after more companies announced layoffs. The …