Tick, Tick , Tick: Study Shows California Losing A Taxpayer Every Minute

Authored by Jonathan Turley,

California is facing a perfect storm in finances, with a crippling deficit and a declining tax base.

Now, a study of IRS data by the National Taxpayers Union Foundation found that California is losing a taxpayer roughly every minute, as states like Florida, Texas, and North Carolina attract new residents due to lower taxes and higher standards of living.

In comparison, Florida gains a new taxpayer every 2 minutes and 9 seconds while Texas gains one every 2 minutes and 53 seconds.

The result has been a bonanza for Florida, which is now collecting $4 billion more per year for its budget.

The states losing taxpayers at the fastest rate are California, New York, and Illinois. Here is the rate of loss:

California: every 1 minute and 44 seconds

New York: every 2 minutes and 23 seconds

Illinois: every 6 minutes and 4 seconds.

Massachusetts: every 11 minutes and 38 seconds

New Jersey: every 14 minutes and 14 seconds.

These remain high-tax states where there are even greater demands for tax increases (particularly in Illinois, California, and New York) as well as new spending demands. In Illinois, Mayor Brandon Johnson is pushing for disastrous new taxes, while in New York, incoming Zohran Mamdani is demanding new taxes to fund his free buses and other campaign promises.

In Seattle, socialist Katie Wilson won the mayoral election on the promise of new “progressive taxes” to fund an assortment of programs.

In Oregon, as Democratic politicians run on the rise in the cost of living, they just approved a gas tax hike as part of $4 billion tax and charge increases. They may be hoping that the decline in gas costs this year will make the tax less noticeable, but some citizens are pushing to place it on the ballot for voters.

In these states and cities, the assumption is that wealthy people will remain as voluntary game in a type of fiscal canned hunt as politicians discuss new wealth and other forms of taxes. They are not. They are leaving with their wealth and their tax payments.

Unions continue to push for these new taxes as high-tax-paying residents leave these states. At the same time, California and Illinois continue to push their status as sanctuary states, increasing the public burden for schools, hospitals and other programs. As they increase spending and their tax base contracts, the outcome is obvious.

Again, take California. The state experienced a $9 billion decline in taxpayer funds during 2018. That number increased to $29 billion lost in 2020.

As I discuss in my forthcoming book, Rage and the Republic: The Unfinished Story of the American Revolution, there is a common myth that the top five percent of this country do not “pay their fair share.” However, putting that debate aside, the question is whether it will produce more revenue than it costs the state in the long run. As these politicians campaign on clipping the “fat cats” who are not paying their fair share, many are likely to follow the exodus to lower tax states with greater fiscal discipline.

There are many in states like Florida and Texas who worry that new residents from states like New York and California will replicate their prior voting patterns and produce the same disastrous policies in their new states. I just spoke in Boise, Idaho where many are complaining that Californians are moving to the state and adopting the same policies that produced the conditions that they just left behind. The fear is that the voters will not be willing to vote for conservatives or libertarians and simply move like a liberal diaspora from state to state as they reproduce prior tax and fiscal policies.

Time will tell. However, what is clear is that Democratic states are not showing any greater fiscal discipline as they careen toward budget meltdowns.