California Outmigration to Cost $6 Billion Per Year Due to LA Wildfires
Written by Chriss W. Street
California state tax base has been suffering the largest annualoutmigration of Wealthy Millennials in the nation. Given those millennials tend to be entrepreneurs and take away jobs when they leave, California’s compounding losses of $2 billion of income taxes each year is set to triple to about $6 billion after the Los Angeles wildfires.
According to SmartAsset the U.S. Census data to calculates the economic activities of Wealthy Millennials, defined as individuals ages 27 to 42 years old with $200,000 or more declared on their latest federal income tax return.
Compares to the median U.S. income is about $75,000, the average millennial in America on average earn about 12% higher incomes, or about $84,000 per year.
California Wealthy Millennials earning $200,000 or more are classified by the IRS as “high earners” was 589,524, or 23.1% of state millennials. With inflow of +14,139 and outflow of-23,320, the net outflow of California Wealthy Millennials was -9,181 last year.
With California Average Adjusted Gross Income of Wealthy Millennials of $557,054, the state lost an average of $47,827 in taxes per when a Wealthy Millennial left the state, or $439 million of state taxes per year. But out-migrating Wealthy Millennials tend to be the entrepreneurs with tax paying employees that tend to follow their job to other states.
The non-partisan Legislative Analyst Office estimates California since 2022 has lost about 1.6% of its $124 billion personal income tax collections each year due to outmigration. That loss yearly loss amounts to $1.98 billion, and has compounded to over $5.9 billion over the last 3 years.
The Los Angeles wildfires have primarily burned the coastal foothill and palisades communities where Wealthy Millennials are concentrated. The Mountain Top Times estimates the net outmigration rate for California Wealthy Millennial is set to triple. At that rate, California annual personal income tax losses would increase each year by $5.9 billion per year, or a yearly loss of $17.7 billion in taxes over the next three years
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