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Elon Musk moves to Texas

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Re: Elon Musk moves to Texas

#321

Post by SV_BubbleTime »

zaroth wrote: post #6

California is actively looking for ways to extract more money from Elon. It likely posed an appreciable risk to his business ventures that CA at some point will try to tax unrecognized capital gains, which would require him to liquidate shares to pay the tax. Basically akin to a hostile government takeover. If CA were to aggressively pursue such a policy, they would likely go after anyone they perceived as fleeing ju…

> If CA were to aggressively pursue such a policy, they would likely go after anyone they perceived as fleeing just ahead of it.

Sure makes me want to run a business and be successful in CA.

Re: Elon Musk moves to Texas

#323

Post by siberianbear »

bagacrap wrote: post #189
boringg wrote: post #171

Earlier quoted context omitted.

California still has every viewpoint that is imaginable though there does seem to be less space for far right. What's making everyone salty about Elon leaving is there was considerable amount of people who helped him build up in the state (i.e. state benefits, staff who worked incredibly hard for many years, consumers who bought his cars [drive in the bay area]) and he's peacing out, with a slap in the face to everyo…

Is this a successful way to dodge taxes? If so, that loophole should be fixed. I left California 4 years ago and yet somehow still pay taxes to the state. If you're saying that anyone who was professionally successful in California has no right to ever leave the state, that seems like a tough sell.

(I am not a lawyer, this is not legal advice)

I left California for Nevada many years ago, and I subsequently sold stock I accumulated while in California without paying state income tax.

It is legal and you can do it, but there are a lot of legal hurdles. They're pretty well documented around page 5 of FTB 1031 [1].

In my case, I quit my W2 job in California, entered into a contract to lease a home in NV, got rid of all leased or owned real estate in CA, sold or re-titled all motor vehicles from CA, registered to vote in NV, surrendered my CA driver license for a new NV license, re-titled all my financial accounts at my new address, got a NV phone number, etc.

This was all easy because I was single without children. If my situation was more complicated, like I had a spouse or ex-spouse with children enrolled in CA schools, or decided to retain owned real estate in CA, the situation can quickly fall into a gray zone.

If you have a W2 job in CA while claiming you're in NV, it's very hard to escape the CA FTB.

CA is very aggressive about chasing down its former residents. It's important to check all the boxes to get them from chasing you.

After I left, I filed non-resident CA returns for three years basically saying, "I had income but I am not a resident and it was not from a CA source, therefore I owe no CA tax." This is important because it starts the statute of limitations running. If you don't file, the statute of limitations doesn't start.

And while I'm writing all this: what in the world is up with a 13.3% state tax bracket? Screw California.

[1] https://www.ftb.ca.gov/forms/2019/2019-1031-publication.pdf

Re: Elon Musk moves to Texas

#324

Post by LinuxBender »

tidepod12 wrote: post #254
LinuxBender wrote: post #170

Earlier quoted context omitted.

[Edit] Adding link to reciprocal agreements and filing in multiple states in thread below. His businesses in California would have to move to Texas to realize the benefits.

>State personal income taxes are based on your legal domicile Not in CA. The determination of your residency status for CA tax purposes is based on much more than just your legal home address. And even if you are classed as a nonresident, you still pay CA taxes on any income earned due to work in CA. Texas and CA do not have any reciprocal tax agreements. Source: live in Texas, travel for work a lot all over the coun…

Thankyou for the clarification. In that case, Elon would need to move his businesses from California to Texas as well. In the mean time, I'm trying to figure out how are non California employees are not paying CA taxes. I suspect that he won't be paying CA taxes on his personal income.

Re: Elon Musk moves to Texas

#325

Post by cannam »

An ignorant question for American readers. This article quotes a tweet from somebody who presumably has something to do with promoting Texas. He writes:

> Texas is the best state for business. Texas has no state income tax, while California’s is the highest in the country. It just got better because Texas made an income tax unconstitutional.

Can you explain what he means by that last sentence?

I'm not asking for a political exegesis, unless there's no way to explain it without. I'm just curious for a technical explanation of what he's referring to. I suppose part of what I don't understand (as a non-American who knows little) is how a state can rule anything unconstitutional in the first place - isn't the constitution a federal affair?

Re: Elon Musk moves to Texas

#326

Post by setpatchaddress »

JKCalhoun wrote: post #309
majormajor wrote: post #178

Earlier quoted context omitted.

Meanwhile, I'm holding my breath that enough richer-than-most folks will move to make house prices go down a bit instead of up 10% since last year like https://ktla.com/news/local-news/socal-homes-prices-again-se... Seems like they're still moving in instead of moving out, for now, though.

Wondering if Prop 13 is the cause of Cal-flight. Is it driving home prices up? Or is it robbing the state coffers of a tax revenue that has to be made up elsewhere? I don't know.

Yes, it both drives home prices up and robs the state of taxes. It would also devastate many people already invested if it went away overnight; there's not really an easy solution to fixing it.

Re: Elon Musk moves to Texas

#327

Post by tomjakubowski »

watwut wrote: post #197
nouveaux wrote: post #146

Earlier quoted context omitted.

California subsidized every Tesla sold. I'm not complaining about it but it should be on record that California helped to give Tesla a boost. It was definitely the right move. I can't think of another state in this country where Tesla would have thrived nearly as well as California. Do you think Tesla would have done well in Texas back in 2003? All those oil guzzlers would have laughed Elon Musk out of the state.

Maybe it is dumb to subsidize entrepreneurs without guarantee they will be paying taxes after.

Yeah, a bit of a free rider problem where California has now paid to bootstrap the US electric car industry, to the whole country's benefit, and won't get quite the tax payment rewards for their investment that they are due. Just lots of smug scorn from Elon and the commenters here.

Re: Elon Musk moves to Texas

#328

Post by politician »

jacquesm wrote: post #259
itbeho wrote: post #183

Earlier quoted context omitted.

At last count I've had 14 friends move out of California in the last 3 years. All of them middle class. The biggest reasons given are cost of living and quality of life and education for their kids.

I highly doubt any of those factored into Elon Musk's decision.

No kidding. There's a Tesla Gigafactory in Austin and the SpaceX Starship construction site in Boca Chica; he's demonstrated that he likes to be at the bleeding edge of development on-site. This move isn't surprising.

Re: Elon Musk moves to Texas

#329

Post by BurningFrog »

cannam wrote: post #325

An ignorant question for American readers. This article quotes a tweet from somebody who presumably has something to do with promoting Texas. He writes: > Texas is the best state for business. Texas has no state income tax, while California’s is the highest in the country. It just got better because Texas made an income tax unconstitutional. Can you explain what he means by that last sentence? I'm not asking for a po…

All the states also have their own constitutions.

This is the Texas one: https://tlc.texas.gov/docs/legref/TxConst.pdf

Re: Elon Musk moves to Texas

#330

Post by s1artibartfast »

glitchc wrote: post #252
scop wrote: post #195

Earlier quoted context omitted.

We will be moving out of CA in the coming months. We are lifelong residents. We are leaving due to cost of living and especially quality of life for our children.

This doesn't make any sense. Why is the quality of life poorer in California compared to Texas when California has: Better schools across all grades, better universities and better weather? Perhaps there are other factors? Do demographics play a role perchance? From Wikipedia: 1) According to 2018 US Census Bureau estimates, California's population was 59.5% White (36.6% Non-Hispanic White), 14.7% Asian, 13.8% Some O…

The average income in California 25% higher than Texas (60k vs 48k), but taxes and costs are more than 25% higher in California.

The typical home value of homes in California is $599,159. [1] The typical home value of homes in Texas is $224,065

California sales tax rate of 7.25% is higher than that of any other state, and its top marginal income tax rate of 13.3% is the highest state income tax rate in the country.

Texas has an 6.25% sales tax and no state income tax. [2]

California's per capita combined state and local taxes is ~$6,000 per person.

Texas's per capita combined state and local taxes is ~$4,000 per person

https://www.zillow.com/ca/home-values/

https://www.thecentersquare.com/texas/texas-residents-pay-8-...

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