Open Letter to Gov. Newsom: ‘Don’t Make it Easy to Leave the State We Love’
Editor’s note: A Southern California businessman copied us on his open letter to Gov. Gavin Newsom. Given his reasonable fear of political retribution – from state tax investigators, for instance, or regulators – we honored his request to remain anonymous.
Dear Gov. Newsom,
I am writing as a lifelong resident of California. I was born and raised here. I raised my family here. I love this place. This is all I know. I co-founded two companies in California, producing hundreds of good-paying California jobs. Collectively we contribute tens of millions to the economy every year. I am very proud of my contributions.
But I also know that I’m part of a small group of people – less than 1 percent of all Californians – who pay half of all the state’s income taxes.
I am not proud of that. And I’m outraged that you’re even thinking about raising taxes on people like me again. But you are – and that has me and others like me thinking about leaving the state.
And unlike our confrontation with death, in this case we absolutely can take our wealth and our companies with us.
Just as this last legislative session ended, two proposals popped up in the state Assembly. Assembly Bill 1253 would impose three new surcharges on the state’s highest earners: 1 percent for taxable incomes over $1 million, 3 percent for incomes over $2 million and 3.5 percent for incomes over $5 million. That would raise California’s top tax rate by 26 percent, from 13.3 percent – already highest in the nation – to 16.8 percent.
At the same time, Assembly Bill 2088 proposes will impose an annual wealth tax at a rate of 0.4 percent of any California resident’s net worth in excess of $30 million. This bill has to be read to be believed, and will require an army of forensic accountants to estimate and enforce.
If a failing state government and rising taxes gave me the incentive to leave California, Covid showed me I can.
In March, like most other Californians confronting mandatory shutdowns, my company shifted quickly from a traditional office to working from home. It wasn’t easy, but it was very successful – and illuminating. After six months of working from home, what I am now hearing from my staff is, “If I can work successfully from home, is there a reason that home has to be in California?”
It’s a good question, and I can assure you it’s one that employers all over this state are fielding every day. With its oppressive taxes, high cost of living, and failing public services – schools that can’t teach, undrivable roads, wildfires, electricity blackouts and the like – California is driving Californians away.
I want you to think long and hard before raising the top marginal tax rate from the highest in the nation something even higher. I want you to think long and hard about acting on the lunacy of a wealth tax. I want you to think long and hard about increasing property taxes on residential or commercial properties. When you begin destroying your business class, you destroy everyone who relies on us – our employees and the people who depend on them. You destroy, in short, community
Few people ever renounce their American citizenship. But people and businesses now renounce their citizenship in California every day. The outmigration of companies and people – particularly to states like Nevada, Arizona, Texas and North Carolina – has been going on for years. What’s different this time is what Covid has taught many of us: We can live anywhere and still keep our jobs.
Don’t make it easy to leave the state we love.