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 â€” 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.
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 Reduxâ€“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