Damned

Reporting from Sacramento — Are rich people fleeing California to escape astronomical state income taxes? That’s the word. But it’s fake news.

In fact, more wealthy people are moving to California than leaving, research indicates. It’s the poor and middle class who are departing.

It makes sense. If you’re getting rich in California and can afford to live comfortably here in this balmy climate, there’s little incentive to leave — except to stick it to the tax collector in Sacramento.

“If you’ve got your business here and you’re making money, it’s hard to leave,” says Allan Zaremberg, president of the California Chamber of Commerce.

“And if you’re making money in California, you’re still going to get taxed here even if you live in Texas,” he said. “You get taxed where you make the money, regardless of where you live.”

Loren Kaye, president of the California Foundation for Commerce and Education, a chamber affiliate, cautions: “You can’t shelter your income simply by moving out of state. If your business or work is in California, that’s where you’re taxed. California very aggressively collects taxes.”

But, he adds: “If you’re retired or living off of investments, that’s different.”

You can move to Nevada, where there’s no state income tax, and live off a California public pension without paying either Sacramento or Carson City.

The long-speculated California tax escape was mentioned in lots of emails last week after I wrote about superstar baseball slugger Bryce Harper. He rejected competitive offers from the Dodgers and San Francisco Giants and signed a 13-year, $330-million contract with the Philadelphia Phillies in low-tax Pennsylvania.

Avoiding California’s highest-in-the-nation 13.3% income tax rate was just one of several reasons Harper signed with the Phillies. He also liked their hitter-friendly ballpark. And he felt comfortable playing in the National League East, where he has spent his entire major league career.

But Harper will save many millions in taxes by not playing for a California team, a strong inducement despite his hometown being nearby Las Vegas.

More from George Skelton »

California’s income tax has become even more burdensome for the wealthy and many middle-class residents because of new federal so-called reforms. President Trump and the previous Republican Congress stripped our ability to deduct all state income and local property taxes on federal returns. There’s now a $10,000 limit.

Harper’s avoidance of this state seemed symbolic of the California tax-flight tale that has circulated for years. But apparently it’s mostly made up.

Sure, there are anecdotes galore. Everyone seems to know someone who has fled California to dodge its high taxes. But there’s no wholesale bolting of the rich.

“Substantially more rich people are moving into California than moving out,” says Cristobal Young, a Cornell University sociology professor. He teamed with others at Stanford University’s Center on Poverty and Inequality to write a research paper on “Millionaire Migration in California.”

“They want to be where the action is,” Young says. “There’s more opportunity in California. There are a lot of ways to make a lot of money in California, more than other places. A lot of that is tech, but it’s a diverse economy….

“People who want to make money tend to live where other high-income people are. It’s one thing to say, ‘I’m going to leave California to save money on taxes.’ But that means leaving clients, collaborators, investors, friends….

“It’s not that rich people are moving to Reno and Nevada,” Young adds. “They’re moving to San Francisco and making living costs miserable for a lot of people.

Coverage of California politics »

“California has a net out-migration of low-income folks who can’t afford to live in their state and are being pushed out by high-income homeowners. And there’s a whole other story of middle-class people struggling to pay their bills and the housing shortage hitting them hard.”

The Stanford report concludes that California has “consistently become a more attractive place for millionaires,” adding that perhaps this is because California has become “a winner-take-all economy.”

Similar findings have been reported by other organizations.

“Although California has had net out-migration among most demographic groups, it has gained among those with higher incomes ($110,000 per year or more) and higher levels of education (graduate degrees),” the state Legislative Analyst’s Office determined last year.

Next 10, a public policy think tank, found that “the main driver for net out-migration appears to be high housing costs since migration rates are highest for those at lower-wage levels…. The vast majority of people who moved out of California were concentrated in lower-skilled, lower-paying fields.”

State demographers, digging into federal census data, found that significantly more people earning above $125,000 were moving into California than were leaving. And more earning less than $75,000 were taking off.

In the January state budget document, there also was this observation: “Over time the state…has become more educated on average due to outward migration of less educated residents…and inward migration of more educated people.”

So the wealthy are not fleeing California in droves even though they’re being hammered by state income taxes. The top 5% of earners pays two-thirds of the tax. The bottom 80% pays less than 11%. That’s just bad tax policy because it leans too heavily on rich people’s capital gains that plummet during a recession.

Fortunately the rich are staying with us, fueling the economy and funding state government. And they keep arriving.

george.skelton@latimes.com

Follow @LATimesSkelton on Twitter

The Damned United tells an unbelievable true story that’s perfect for Ted Lasso fans.

Netflix’s The Damned United stars legends from the worlds of Harry Potter, The Good Omens and Adolescence.

After dropping on Netflix at the weekend, sports drama The Damned United has soared into the streamer’s Top 10 most-watched list and continues to rise in the charts.

Originally released in 2009 and based on a novel by David Peace three years prior, The Damned United tells the turbulent tale of Brian Clough and his disastrous run as the manager of Leeds United in 1974. Only lasting 44 days in the job, Clough was quickly able to alienate the players and the board, leading to the collapse of his professional football career.

As Netflix subscribers continue to discover the classic sports film, here’s everything there is to know about The Damned United cast.

The Damned United cast in full

Brian Clough – Michael Sheen

Watch Jose Mourinho Netflix doc with free Netflix subscription

This article contains affiliate links, we will receive a commission on any sales we generate from it. Learn more

£5.99

FREE

Netflix | Sky

Get the deal here

Jose Mourinho’s three-part Netflix documentary is available to watch at no extra cost for Sky customers as the provider gives away free subscriptions with each of its Sky Stream TV bundles.

Arrogant and fiercely outspoken Brian Clough wasn’t quiet when it came to criticising Leeds United’s former manager Don Revie.

So it took Clough by surprise when he was asked by the team’s board to take over managing the reigning champions.

Actor Michael Sheen has starred in an abundance of hit shows and films throughout his career including The Queen, Good Omens, Masters of Sex, The Twilight Saga and Frost/Nixon.

Peter Taylor – Timothy Spall

Peter Taylor is Clough’s loyal assistant manager and best friend who helps ground the fiery manager when needed.

He is portrayed by actor Timothy Spall who is best remembered for his work in Mr Turner, The King’s Speech and in the Harry Potter franchise as the villainous Peter Pettigrew.

Billy Bremner – Stephen Graham

Billy Bremner is the hard-working captain of Leeds United who is Clough’s main antagonist, leading the resistance that brings about the manager’s infamously short 44-day run at the club.

Bremner is brought to life in The Damned United by Emmy Award-winning actor Stephen Graham, renowned for his work in Netflix’s Adolescence, This is England, A Thousand Blows and Boardwalk Empire.

John O’Hare – Martin Compston

John O’Hare is the team’s striker, known for his aggressive team spirit while playing under Clough.

He is portrayed by none other than Martin Compston, famed for starring as DI Steve Arnott in the unforgettable Line of Duty.

Before becoming a household name in the BBC crime drama, Compston was a professional footballer in Scotland and made a couple of appearances playing for Greenock Morton.

Don Revie – Colm Meaney

Don Revie is the legendary, formidable Leeds United manager who leaves to manage the England national team. It is his exit from the team that leads his rival Clough to begin his chaotic short stint at Leeds.

Don is played by actor Colm Meaney who stars in Remarkably Bright Creatures, In the Land of Saints and Sinners and Star Trek: Deep Space Nine.

Sam Longson – Jim Broadbent

Prior to Clough joining Leeds United, he was the manager of Derby County with Sam Longson acting as its chairman.

Actor Jim Broadbent is recognised for starring in the Harry Potter and Bridget Jones franchises, as well as Game of Thrones and Only Fools and Horses.

The Damned United is available to watch on Netflix.