January 9, 2007

Googlers Carry Cali for Now, But Many Others Are Voting with Their Feet

Filed under: Business Moves,Economy,Taxes & Government — Tom @ 2:25 pm

Arnold Schwarzenegger should be down on his hands and knees (if he can do that with his broken leg) in thanks that Google went public — and that the company didn’t relocate to Nevada:

California, whose budget revenue slides up and down like a yo-yo with changes in capital gains and stock options, is once again counting on outsized income tax filings from a handful of tech executives to help balance its budget.

For this wave, California can largely thank Google Inc.

After cashing in more than 9 million shares valued at $3.7 billion last year, 16 Google insiders will owe the Golden State as much as $380 million in taxes — enough to cover the salaries of more than 3,000 state workers.

Taxes paid by Google founders Sergey Brin and Larry Page account for nearly half the amount. There is virtually no way for them or other California billionaires to escape a 9.3 percent state capital gains tax or a recent voter-approved 1 percent tax on the wealthy to underwrite the state’s mental health programs.

Wrong. They can move. Many have, and continue to. In a sense, the good fortune of Cali’s Google windfall is delaying many hard fiscal decisions that the state has yet to face up to. Depending on more Googles, instead of lowering taxes across the board, growing the economy, and increasing entrepreneurship, would be a big mistake. The treadmarks those fleeing leave behind tell the tale.

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Previous “Voting with their feet” posts:
- Aug. 2, 2006 — International Edition: Irish High Techs, and the Rest of the Country, Are Smiling
- May 28 — New England Edition
- Mar. 29 — Vermont, Iowa, New Jersey, and California Editions
- Dec. 23, 2005 — Voting with Our Feel Redux–Leaving High-Tax States for Low-Tax States

Original “Voting with their feet” series:
- Nov. 25, 2005 — Part 1: What Thanksgiving Is Partially About
- Nov. 26 — Part 2: It’s the Taxes, Stupid
- Nov. 27 — Part 3: Walking Away from Academic Excellence
- Nov. 28 — Part 4: Leaving Cincinnati (and Other Ohio Cities)
- Nov. 30 — Part 5: Willisms Looks at State Migration Patterns
- Dec. 2 — Part 6: Losing the Very Rich

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4 Comments

  1. The problem here in the New England states is that available land is in short supply. Housing is expensive and the population is very concentrated. It’s easy for young people to pack up and move to cheaper areas. I feel that you get what you pay for. It may be less expensive for a house in say, Atlanta; but at what cost of social or cultural experiences?

    Comment by Kevin — January 10, 2007 @ 2:53 pm

  2. #1, I don’t think those kinds of what you called sacrifices are as great as they might once have been.

    Comment by TBlumer — January 10, 2007 @ 3:09 pm

  3. Economics and Social Policy IXXX…

    This week’s E&SP is up….

    Trackback by The Boring Made Dull — January 15, 2007 @ 9:38 pm

  4. [...] Boring Made Dull’s 29th Roundup on Economics and Social Policy is here. How about this for a reax to my carnival entry on the taxes from the exercise of Google stock options helping to carry California?: One would certainly have to question both the sanity and morality of Google founders Sergey Brin and Larry Page. It’s close to insane to not take simple steps to mitigate a tax burden like this. It’s probably immoral as well – If the(y) left California, they could do more good with the tax savings by giving it to targeted charities than the kleptrocrats working for the state of California could. [...]

    Pingback by BizzyBlog » Carnival Barking for BMD (011707) — February 3, 2007 @ 1:05 pm

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