> Meanwhile, states like California and New York saw massive outflows, highlighting how affordability is playing a central role in domestic migration trends
Affordability for rich people wealthy enough to move?
> California lost $12 billion in wealth in 2023 alone, the largest outflow of any state. This highlights how high housing costs and taxes are pushing even high-income households to relocate.
In the US the top x% pays a disproportionate amount of all taxes. I don't buy it that the issue in California is "high housing costs".
It's taxes, simple as that. People who don't have enough to pay high rents / buy overpriced real estate aren't paying enough taxes to weight in the balance vs the actual wealthy people.
A better question would be: why are actually rich people who can totally afford high housing costs leaving California in drones?
I've got a friend who lives in SoCal: he sold a startup he created. Big house, tennis court, swimming pool, separate apartment for guests, etc. He used to love southern California but now wants to leave.
Good. Who cares? Billionaires in California created <3% of the jobs and now that they're gone, that's a niche small business owners can fill right back up. Hooray!
The sooner we treat billionaires as cost centers the better.
Clearly before we were against single engineer unicorns we were for them. Then the billionaires fled in terror...
What is the age of the average Florida 2026 transplant? Couldn’t this just be near-retiree boomers moving to Florida, which doesn’t really indicate much?
What are these numbers compared to years prior? Do they fluctuate, or are they a continuous trend?
How much of the California and Texas numbers are caused by a small number of individuals (the Elon effect)?
Florida is a great state to declare bankruptcy in as they have a homestead exemption so they don't take your house. If you're a piece of shit that runs scammy businesses this a great place to move to.
Overall this isn't really a bad thing - if people want to vote with their feet then have at it. California continues to be a nice place to live and do business (non-competes) so I'm sure people will continue to live there. Everyone else can have Texas, Florida, and Tennessee and all of the, uh, benefits of living in those places and interacting with those state and local governments.
Just bout every state has a homestead exemption but IIRC Florida's is one of the few/only where it's unlimited on your primary residence so you "lock in" all your gainz by moving there before the "oops I'm bankrupt" drops.
Yeah, wealth has legs, and we increasingly have this wealth meta-economy where different states are good at producing wealthy people (CA, NY) and different states are good at giving them a hospitable place to live.
This is probably good in some sense - you can argue that it's not healthy for states like CA to "own" so much of GDP - but I wonder where this leads us in a couple of decades. Does it continue to be like this, with some states acting as sources and some acting as sinks... or does it mean that more tech hubs pop up elsewhere because in the long haul, people probably prefer to invest close to home.
They're not 'hospitable,' they're 'advantageous' due to being lower tax rates. If anything, lower tax rates make places less 'hospitable' in the long run.
The type of people who move from CA to WY for the tax benefits are the type of people who pay more taxes than they use in government services (even with very low tax rates). That means WY can offer more government services to the rest of its residents, making it more hospitable.
> who pay more taxes than they use in government services (even with very low tax rates)
They rely massively on government services. They depend on an educated workforce. They depend on law and order to prevent their workplaces from bandits. They depend on massive navies that allow goods to be shipped across the world without concern. They depend on courts to enforce contracts so that they can build their business on contracts rather than having to establish personal trust with everybody they do business with. They depend on a stable currency. They depend on a regulated finance market. They depend on a massive pacified customer base.
I've only scratched the surface, there's lots more.
Their business in California, most of their income is generated in California. California is bearing the cost, Wyoming is getting the income tax revenue.
That’s not true. For example, Washington State has no corporate tax: https://taxfoundation.org/data/all/state/state-corporate-inc.... But companies aren’t exactly flocking there. Florida meanwhile is seeing a huge boom, but its corporate taxes are around the middle of the pack. California has always had pretty high marginal tax rates, even back in the 1970s when it was a solid red state. It used that money to do things like make big investments in higher education.
Being hospitable is more about whether the state makes it a pain in the ass to do business.
Taxes are the least worst part of doing business. It's all the other subjectively defined and capriciously enforced regulatory BS that drives business away. You can't run a business let alone get financing to create one when a huge chunk of your costs are a question mark.
Washington State has a "Business & Occupation tax" on gross receipts rather than a tax on net income. Corporations are absolutely paying taxes here, and if you look at it as a % of net income, it's often more than a traditional corporate tax would be. https://dor.wa.gov/taxes-rates/business-occupation-tax
Those states will eventually either kill the golden goose or make themselves unattractive for the next big industry. California for most of the 20th century was a place where the government was well managed and efficient, wasn’t afraid to make big investments in infrastructure and education, and made it easy to build stuff without too much hassle. Texas and Florida kind of fit that niche today, but both are a shadow of what California used to be.
I didn't say anything about Florida, because that is "no" government. But I've definitely considered Mass. People forget though that when capital takes flight, international borders are of no concern. Singapore and London are on the docket.
(Before anyone gets on my case, I've lived in Both CA and London, and at least the City government is 10x more effective than any municipality in CA)
Internationally there certainly are small countries that specialize in this. Singapore is famous for low tax + effective (if overbearing) governance. The trains run on time. Come to think of it, Switzerland is maybe low tax (though not compared to Liechtenstein or Monaco, and it even borders on .li), and is also known for effective, if expensive, governance.
Good lord - you literally just named the major tax havens of the modern world.
Those places exist for billionaires to go to and not pay taxes or for corrupt regimes to park their money - where it will be protected by commercial law of Western nations - but no questions asked.
Switzerland hosts 1/3 of the world's offshore investment - when Nigerians pilfer their countries (billions go missing from the ministry of energy every year) - they end up in places like Switerland.
They exist with the bounty of the 'free money' of that dynamic.
Singapore is also an ant-democratic authoritarian state.
None of those places are 'self sustaining' they can only exist because of that special leverage they have of 'tax evasion'.
It's much the same in some carribean offshore places.
Trains can run on time if you don't have to worry that-that much about the money.
Dubai also provide many 'material advantages' to residents. Same thing.
Not a very good argument. Even Ireland is a tax haven for US FANG businesses and that arrangement is so much less fair than Switzerland is, because it's literally a tax deal with individual companies, individual Irish people or companies cannot get anything remotely similar in tax treatment. Billionaires only, nobody else, not even Irish citizens or companies. Compared to this Switzerland's tax is egalitarian, in fact Switzerland signed and applies the minimum corporate tax rate, which means FANGs cannot get Irish tax rates in Switzerland. And Ireland cheated: Ireland signed the global minimum tax treaty and, sorry to put it like this but I don't know how to do differently without lying, they lied. They're simply not applying the treaty, with "existing deals" as an excuse, as if they somehow didn't know. Plus Ireland has both natural resources and very easy access to trade, neither of which are advantages Switzerland, Liechtenstein or Monaco have). Netherlands is another example of a country trying to be a tax haven, despite their location, money and ... so no, I don't think Switzerland counts as a tax haven.
A lot of countries will never have a geographic advantage, and need to find business and support somewhere else. Switzerland is one of those countries. So is Singapore. The real EU tax havens (Ireland, Monaco, City of London) don't need anything.
And to add insult to injury: the current Irish political party in power Fianna Fáil explicitly campaigns on their accomplishment of improving Dublin, not for Irish people, in fact they admit their policies are causing rapid deterioration for normal people, but for FANG companies.
So no, I don't feel this is a very good argument at all.
California imports it's current entrepreneurs because it chased the previous generations of them away. I was a fourth generation Californian, was...
I know one literally one person in my highschool graduating class who stayed behind.
Sure the older generation are still left for the most part, still not admitting they did anything to cause the situation, but the young and ambitious have all left.
Think about that the fact that the entire population of a place has basically been replaced in under a generation, and with people who are chasing dollars and clout not people who are building communities. (And no this isn't about immigrants, Cali was always full of people from everywhere, it's about the personality that it attracts now.)
We all left and built other communities and business elsewhere because the place quite clearly told us we were not wanted there.
I'm not sure why people keep repeating fabricated GDP like it's some measure of success, especially when its completly measured on non-tangible products like the California economy.
Cali compared to Cali 40/50/100 years ago is wasteland and it pisses me off every day.
Wyoming is an interesting case with Higher Ed. It's actually the legislature that runs UW. There isn't a regent board or some such thing. Hence, with many other priorities, the Cowboys don't get that much time in the minds of their bosses.
It's one of the many many wrinkles that come along with the many college football issues these days. Any formation of a players union or draft or much of any real professionalization of the sport has to go through so many different governance formations (regents, governors, the Catholic Church, etc). As such, the many issues with college ball are likely to continue for a long time and fester.
It doesn't have to be this way, and it wasn't at some points in the past for different states. Seems like the sources keep forgetting what made them sources.
That depends on your audience. If you want to move somewhere that's about to have an influx of income tax, you'd head to the states with higher income tax rates + income inflows. For actual wealth migration, that's probably a lot more ephemeral since sales tax tends to be regressive and the wealthy keep their money in investments.
Anecdotally, I am a software engineer that moved to Florida because other states are hostile to conservatives. (this post will be downvoted which illustrates the problem)
A majority of California's budget problems come from trying to absorb what should be a federally handled expense. Medi-Cal is what Medicaid should be across the board. But they end up in the classic trap for US states, which is to say you have all of the problems of a major country but none of the stickiness to the tax base like one, making it impossible to sustain these things long term.
People vote with their feet. This shouldn't be a negative. Some people don't want to be over taxed and over regulated in places like CA and NY, so they move to states they see as fitting their needs/culture better.
What we really need is a federal law that says states can't entice businesses to move or stay in some place using monetary bribes in the form of company-specific tax cuts. Reducing this manipulation could help tax revenues instead of states competing to be lowest bidder.
>People vote with their feet. This shouldn't be a negative. Some people don't want to be over taxed and over regulated in places like CA and NY, so they move to states they see as fitting their needs/culture better.
Sure but the point being that that would incur an exit tax from most major countries, whereas the freedom of movement within the US creates this weird system where you can gain incredible wealth benefitting from the infrastructure and economy of one state, then just walk away and decide not to be taxed any longer. I'm not saying it's a bad thing, just that that ends up screwing over the state in the long term.
"where you can gain incredible wealth benefitting from the infrastructure and economy of one state"
With internet sales, it seems like the benefit from local infrastructure and economy is increasingly small. Especially when we are talking about CA and NY, known for tech and finance, which are very geographically unlinked. Even physical products tend to be shipped using infrastructure from receiving states.
In general, the incredible wealth is mostly luck.
Taking more on the income (including cap gains) side would be the better solution than wealth or exit taxes. This would also be more impactful on inequality than an exit tax.
This is a little misleading as written (with a 2026 timestamp but citing only 2023 data) given there is a wealth tax on the California ballot and wealth migration is cited as a reason to oppose it. This article looks like it supports that argument, but it doesn't.
What stands out to me: the #1 (FL) over 3x the inflow of the #2 (TX). Both are large southern coastal states with no state income tax. What's Florida got that's that much more attractive?
I was under the impression a big part of it relates to Florida bankruptcy law allowing individuals to discharge debts without losing a significant amount of their assets.
At a glance, it looks like Chapter 7 bankruptcy is what I was remembering. There are significant exemptions for property, and the more recent amendments to the law to protect against abuse by wealthy individuals are laughably based on income.
It looks pretty easy to buy up a bunch of property in Florida, live there for two years to become eligible for the property exemptions, then declare Chapter 7 to wipe away outstanding debts with minimal-to-no losses.
Of course, respondents are free to correct me if I've misinterpreted something. My initial thought was based on hearsay, and my interpretation was based off quick skimming :)
FL is the same timezone as NY, and closer to fly to, and a non-trivial percent have moved only in terms of tax residency, not in terms of how they live their life. In practice "wealth moved to Florida" in these cases is "wealthy people have a home there as part of their overall portfolio of properties."
For a cohort of people who are on the road for work 25% of the time and/or own 2-5 homes, the concept of primary residence is mostly just a legal term. Can they sign a tax return to NYS/NYC tax authorities that they spent 183 days outside the state/city? Lots of people cheat on their taxes.
Therefore there's a wide spectrum of gray in terms of rich NYers "moving to Florida".
First guy I talked to at an NYC tech conference yesterday gave me a business card with his Miami work address (and NYC phone number..) after spending 5 minutes talking about how lived in the same NYC hood.
I know several NYers at/near retirement who plan to: sell NYC primary residence, buy a residence in Florida (change IDs, etc), then after 1 year of seasoning rent back a place in NYC they plan to spend as close to the 182 days/year in NYC that keeps them in tax compliance.
Make money here but wait until death to have it declared over there is unsustainable, it's a global problem.
This is going to sound wild - but hear me out: you pay taxes in equity the moment you get it.
'Shares are income' - so you got 1M shares in a company you made, the tax is, 1/3 or whatever - and then you never pay taxes on cap gains from that again.
You might be able to control liquidity, but when it's liquid it goes to the state etc..
That way taxes are captured appropriately and where wealth is created.
It just feels extra odd that you incorporate a company and immediatley gov. gets 1/2 or whatever - but that is the case the moment it goes into your pocket as $ anyhow.
Maybe I’m misunderstanding your suggestion, but shares are already treated as ordinary income when they vest (when the shares are released to you and you first gain the right to sell them).
If a company pays you $1M of shares, the IRS treats it exactly the same as if you were paid $1M of cash and you used it to buy the shares. The capital gains work the same too: you pay capital gains tax on the difference in value between when you receive the shares and when you sell them. That’s how it already works.
So if your company gives you something worth 1M, then yes, you have to pay taxes right there, that's not what I mean, I mean on the cap gains.
A company gives you options but at market value, they are worth $0 when they give them to you, just like if you incorporate a company, shares are worth some nominal amount.
You give the equity - not the realized gains later.
The problem with cap gains is they are deferred. Musk takes loans against his equity and never pays taxes.
Musk can move to the lowest tax regime, pay taxes on massive cap gains, and then move somewhere else. That's bad.
To avoid that, the equity is allocated instead of the cash and it's allocated at the start, not the end. Or in the relevant locale.
It means he owes state of Cali 1/3 of SpaceX, irrespective of where he moves.
Another way to do it, would be to make people pay up when they change tax domicile.
So if Musk moves from Cali to Texas, he has to pay his tax bill on the way out at 'market rates'. And he's 'zeroed out' when he moves to Texas. Any further gains made in TX, he pays in TX.
That becomes a problem with private ownership etc.
There's been this idea going around that a billionaire has to keep owning taxes just for being a billionaire. After they already paid income tax on that money.
Consider the idea of income tax. You get paid. You pay tax. The money after that is yours. Billionaires have the same thing. They make a lot early and then "retire" but then people still look at their bank account and want more years later. This idea that a billionaire has no income years later seems unfair to people even though really it makes all the sense in the world. They don't need income anymore. Duh. They already paid all the income taxes on it years prior.
So yes they will absolutely leave. And then yes you will have a massive budget hole. And then your taxes will go up because the state got greedy.
many billionaires don't pay income (wages) tax because they come from family money inheritance and income is from investments or maybe shares of companies they head, rather than wages, on which to pay income tax. And income tax from shares and capital gains is less than wages tax. I agree they shouldn't be taxed twice, but the way we are taxed is not straight-forward.
I think you're ignoring the role of capital gains taxes, borrowing against assets, offshore tax shelters, outsized political influence, and the cannibalization of public good for private gain.
The number by itself is pretty meaningless. There's a massive difference between migration of a million middle-class households and one deca-billionaire who changed where his primary home was registered.
This looks like it's capturing how wealth is shifting around from people moving. But how does this net out with changes in wealth / income / whatever from people who stayed put? It'd be very interesting to learn that California was actually contracting, but while this data presentation suggests it, that's not what's actually here....
I doubt they modeled the net outflows of capital from the retirement zones each year as estates get settled. Though I did see a claim of increasing GDPs in those inbound states.
I think Ohio, Pennsylvania, and Virginia are the more interesting states. These are affordable places with solid job opportunities. So I think job migration is more complicated than just cost of living and taxes.
Also, it would be interesting to see these absolute figures as a percentage of overall income.
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[ 1.1 ms ] story [ 10.0 ms ] threadAffordability for rich people wealthy enough to move?
> California lost $12 billion in wealth in 2023 alone, the largest outflow of any state. This highlights how high housing costs and taxes are pushing even high-income households to relocate.
In the US the top x% pays a disproportionate amount of all taxes. I don't buy it that the issue in California is "high housing costs".
It's taxes, simple as that. People who don't have enough to pay high rents / buy overpriced real estate aren't paying enough taxes to weight in the balance vs the actual wealthy people.
A better question would be: why are actually rich people who can totally afford high housing costs leaving California in drones?
I've got a friend who lives in SoCal: he sold a startup he created. Big house, tennis court, swimming pool, separate apartment for guests, etc. He used to love southern California but now wants to leave.
The reason is he doesn't like communism.
The sooner we treat billionaires as cost centers the better.
Clearly before we were against single engineer unicorns we were for them. Then the billionaires fled in terror...
TLDR: F*** billionaires
What is the age of the average Florida 2026 transplant? Couldn’t this just be near-retiree boomers moving to Florida, which doesn’t really indicate much?
What are these numbers compared to years prior? Do they fluctuate, or are they a continuous trend?
How much of the California and Texas numbers are caused by a small number of individuals (the Elon effect)?
Overall this isn't really a bad thing - if people want to vote with their feet then have at it. California continues to be a nice place to live and do business (non-competes) so I'm sure people will continue to live there. Everyone else can have Texas, Florida, and Tennessee and all of the, uh, benefits of living in those places and interacting with those state and local governments.
This is probably good in some sense - you can argue that it's not healthy for states like CA to "own" so much of GDP - but I wonder where this leads us in a couple of decades. Does it continue to be like this, with some states acting as sources and some acting as sinks... or does it mean that more tech hubs pop up elsewhere because in the long haul, people probably prefer to invest close to home.
It is a fiscal detriment to CA and NY though.
They rely massively on government services. They depend on an educated workforce. They depend on law and order to prevent their workplaces from bandits. They depend on massive navies that allow goods to be shipped across the world without concern. They depend on courts to enforce contracts so that they can build their business on contracts rather than having to establish personal trust with everybody they do business with. They depend on a stable currency. They depend on a regulated finance market. They depend on a massive pacified customer base.
I've only scratched the surface, there's lots more.
When a billionaire moves to Wyoming, the marginal tax revenue is far greater than the marginal cost of police services, for example.
When Washington was a low tax state, it spawned Amazon, Microsoft, Boeing, Starbucks, Costco, Nordstrom, T Mobile, Expedia, etc.
Being hospitable is more about whether the state makes it a pain in the ass to do business.
Taxes are the least worst part of doing business. It's all the other subjectively defined and capriciously enforced regulatory BS that drives business away. You can't run a business let alone get financing to create one when a huge chunk of your costs are a question mark.
Every state offers wealthy people a good place to live - the suggestion that somehow this is a trade off is very wrong.
This has a lot to do with taxes.
But it’s not, and that doesn’t feel worth it.
Vermont has effective governance. Probably so does Mass. That's not why people go there.
(Before anyone gets on my case, I've lived in Both CA and London, and at least the City government is 10x more effective than any municipality in CA)
Those places exist for billionaires to go to and not pay taxes or for corrupt regimes to park their money - where it will be protected by commercial law of Western nations - but no questions asked.
Switzerland hosts 1/3 of the world's offshore investment - when Nigerians pilfer their countries (billions go missing from the ministry of energy every year) - they end up in places like Switerland.
They exist with the bounty of the 'free money' of that dynamic.
Singapore is also an ant-democratic authoritarian state.
None of those places are 'self sustaining' they can only exist because of that special leverage they have of 'tax evasion'.
It's much the same in some carribean offshore places.
Trains can run on time if you don't have to worry that-that much about the money.
Dubai also provide many 'material advantages' to residents. Same thing.
A lot of countries will never have a geographic advantage, and need to find business and support somewhere else. Switzerland is one of those countries. So is Singapore. The real EU tax havens (Ireland, Monaco, City of London) don't need anything.
And to add insult to injury: the current Irish political party in power Fianna Fáil explicitly campaigns on their accomplishment of improving Dublin, not for Irish people, in fact they admit their policies are causing rapid deterioration for normal people, but for FANG companies.
So no, I don't feel this is a very good argument at all.
I know one literally one person in my highschool graduating class who stayed behind. Sure the older generation are still left for the most part, still not admitting they did anything to cause the situation, but the young and ambitious have all left.
Think about that the fact that the entire population of a place has basically been replaced in under a generation, and with people who are chasing dollars and clout not people who are building communities. (And no this isn't about immigrants, Cali was always full of people from everywhere, it's about the personality that it attracts now.)
We all left and built other communities and business elsewhere because the place quite clearly told us we were not wanted there.
I'm not sure why people keep repeating fabricated GDP like it's some measure of success, especially when its completly measured on non-tangible products like the California economy.
Cali compared to Cali 40/50/100 years ago is wasteland and it pisses me off every day.
Wyoming is an interesting case with Higher Ed. It's actually the legislature that runs UW. There isn't a regent board or some such thing. Hence, with many other priorities, the Cowboys don't get that much time in the minds of their bosses.
It's one of the many many wrinkles that come along with the many college football issues these days. Any formation of a players union or draft or much of any real professionalization of the sport has to go through so many different governance formations (regents, governors, the Catholic Church, etc). As such, the many issues with college ball are likely to continue for a long time and fester.
So a state invests in educating its residents, only for other states to reap the economic benefits?
That's why Seattle ended up with a software industry presence, isn't it?
What we really need is a federal law that says states can't entice businesses to move or stay in some place using monetary bribes in the form of company-specific tax cuts. Reducing this manipulation could help tax revenues instead of states competing to be lowest bidder.
Sure but the point being that that would incur an exit tax from most major countries, whereas the freedom of movement within the US creates this weird system where you can gain incredible wealth benefitting from the infrastructure and economy of one state, then just walk away and decide not to be taxed any longer. I'm not saying it's a bad thing, just that that ends up screwing over the state in the long term.
With internet sales, it seems like the benefit from local infrastructure and economy is increasingly small. Especially when we are talking about CA and NY, known for tech and finance, which are very geographically unlinked. Even physical products tend to be shipped using infrastructure from receiving states.
In general, the incredible wealth is mostly luck.
Taking more on the income (including cap gains) side would be the better solution than wealth or exit taxes. This would also be more impactful on inequality than an exit tax.
This is a little misleading as written (with a 2026 timestamp but citing only 2023 data) given there is a wealth tax on the California ballot and wealth migration is cited as a reason to oppose it. This article looks like it supports that argument, but it doesn't.
See: https://www.floridabar.org/public/consumer/pamphlet008/
At a glance, it looks like Chapter 7 bankruptcy is what I was remembering. There are significant exemptions for property, and the more recent amendments to the law to protect against abuse by wealthy individuals are laughably based on income.
It looks pretty easy to buy up a bunch of property in Florida, live there for two years to become eligible for the property exemptions, then declare Chapter 7 to wipe away outstanding debts with minimal-to-no losses.
Of course, respondents are free to correct me if I've misinterpreted something. My initial thought was based on hearsay, and my interpretation was based off quick skimming :)
For a cohort of people who are on the road for work 25% of the time and/or own 2-5 homes, the concept of primary residence is mostly just a legal term. Can they sign a tax return to NYS/NYC tax authorities that they spent 183 days outside the state/city? Lots of people cheat on their taxes.
Therefore there's a wide spectrum of gray in terms of rich NYers "moving to Florida".
First guy I talked to at an NYC tech conference yesterday gave me a business card with his Miami work address (and NYC phone number..) after spending 5 minutes talking about how lived in the same NYC hood.
I know several NYers at/near retirement who plan to: sell NYC primary residence, buy a residence in Florida (change IDs, etc), then after 1 year of seasoning rent back a place in NYC they plan to spend as close to the 182 days/year in NYC that keeps them in tax compliance.
AI slop everywhere.
This is going to sound wild - but hear me out: you pay taxes in equity the moment you get it.
'Shares are income' - so you got 1M shares in a company you made, the tax is, 1/3 or whatever - and then you never pay taxes on cap gains from that again.
You might be able to control liquidity, but when it's liquid it goes to the state etc..
That way taxes are captured appropriately and where wealth is created.
It just feels extra odd that you incorporate a company and immediatley gov. gets 1/2 or whatever - but that is the case the moment it goes into your pocket as $ anyhow.
If a company pays you $1M of shares, the IRS treats it exactly the same as if you were paid $1M of cash and you used it to buy the shares. The capital gains work the same too: you pay capital gains tax on the difference in value between when you receive the shares and when you sell them. That’s how it already works.
So if your company gives you something worth 1M, then yes, you have to pay taxes right there, that's not what I mean, I mean on the cap gains.
A company gives you options but at market value, they are worth $0 when they give them to you, just like if you incorporate a company, shares are worth some nominal amount.
You give the equity - not the realized gains later.
The problem with cap gains is they are deferred. Musk takes loans against his equity and never pays taxes.
Musk can move to the lowest tax regime, pay taxes on massive cap gains, and then move somewhere else. That's bad.
To avoid that, the equity is allocated instead of the cash and it's allocated at the start, not the end. Or in the relevant locale.
It means he owes state of Cali 1/3 of SpaceX, irrespective of where he moves.
Another way to do it, would be to make people pay up when they change tax domicile.
So if Musk moves from Cali to Texas, he has to pay his tax bill on the way out at 'market rates'. And he's 'zeroed out' when he moves to Texas. Any further gains made in TX, he pays in TX.
That becomes a problem with private ownership etc.
Consider the idea of income tax. You get paid. You pay tax. The money after that is yours. Billionaires have the same thing. They make a lot early and then "retire" but then people still look at their bank account and want more years later. This idea that a billionaire has no income years later seems unfair to people even though really it makes all the sense in the world. They don't need income anymore. Duh. They already paid all the income taxes on it years prior.
So yes they will absolutely leave. And then yes you will have a massive budget hole. And then your taxes will go up because the state got greedy.
Also, it would be interesting to see these absolute figures as a percentage of overall income.