About your posts today about David Tepper and the New Jersey taxes, California, especially after Prop 30, has the highest marginal rate in the country. Is there an exodus from California? Why are there so many high-income, high-profile, people living in California? Are people are willing to pay a premium to live in California or can effective California state tax rates be lower than the specified rates? I have been curious about this for the past couple years.The effective tax rates in California and New Jersey are not much different from the nominal rates.
There has been and continues to be an exodus from both New Jersey and California. With regard to California, see, for example:The Great California Exodus: A Closer Look.
It's always dangerous though to think in terms of aggregates. Change often happens at the margins. In the case of high taxes, it will cause some people out but not necessarily all. Depending upon the severity of the taxes, some may stay becasue they have relatives in the area or a great many friends in the area. They may stay becasue they have jobs that would be difficult to replace in another geographic location. A business owner might have the type of business that is difficult to relocate, etc.
That said, the more oppressive the taxes, the more value scales tilt in favor of leaving.
In places where things are extremely oppressive, not necessarily in terms of taxes but overall oppressive, lots of people will leave, see Syria and Libya.