Wealthy Exodus to Escape New Tax Rules Worries California Democrats
January 19th, 2018Via: Sacramento Bee:
The state’s wealthiest 1 percent, for instance, pay 48 percent of its income tax, and the departure of just a few families could lead to a noticeable hit to state general fund revenue.
“It is a genuine concern and that’s why the legislatures in high-tax states are swinging into action immediately,” said Katie Pratt, a professor at Loyola Law School in Los Angeles who specializes in taxes.
The new federal tax law poses problems for high earners in the Golden State because it caps two deductions that Californians used to limit their federal income tax liability, restricting their ability to write off mortgage interest and their state and local taxes.
Because real estate in coastal counties is so expensive with median home prices in the nine-county Bay Area topping $768,000, the cap on mortgage interest deductions probably will bite some middle class Californians, too.
