California was called the Golden State because of the Gold Rush.
It was also seen as the place of limitless possibilities and in recent times has become home to Silicon Valley – the place where fortunes are made in the twenty-first century.
Change is Afoot
This seems set to change, however, as there is now an increasing number of people leaving California.
Reasons for leaving include the cost of living, crime and high tax levels.
It Isn’t Just People
It isn’t only people who are leaving California in droves, it is whole businesses.
The tax laws and business regulations are two of the major reasons for this. Other states don’t have the same complexity around tax and business laws.
Texas and Arizona Benefit
Texas and Arizona are the two most popular places for people to move to after leaving California.
Texas has a lower cost of living than other states and also lower taxes. Arizona has a strong job market and a lot of culture to engage with.
Figures Released by IRS
According to figures just released by the Inland Revenue Service (IRS), California lost 144,203 tax filers in the years 2021 and 2022.
That amounts to a loss of $24 billion in personal incomes. Since $1 billion is a thousand times $1 million, the scale of the loss is staggering.
People Moving in
All is not lost, since plenty of people are still moving into California.
It is the case, though, that those moving in are significantly poorer than those moving out. It is estimated that those moving in have 15% less income than those moving out.
Job Losses
One of the problems with the exodus is that whole companies are leaving.
That means that they are taking jobs and industries away with them, leaving less jobs to attract new incomers and meaning that those people left behind have fewer, lower paid jobs to fight over.
Other Consequences
Other consequences of this loss include the reduction of seats in the House of Representatives.
California has already lost one seat after the 2020 census. More are set to go if the population exodus continues. It is predicted to lose up to five seats by 2030.
Private Versus Public Sector
Since 2022, the private sector in California has lost 154,000 jobs.
The public sector, meanwhile, has grown by 361,000 jobs.
State Cutting Funding
California state has a $47 billion deficit to try and fill.
For that reason, it is cutting and delaying funding which will further damage the prospects of anyone moving to or looking for a job in California. Will the Golden State eventually become the Sand State?
