As the French elite scramble for an economic exit plan across the pond to London, Californians would enjoy similar benefits from a continental shift to Florida. High earners in France face enormous tax increases in the coming years if the newly elected Presidente Hollande follows through with his lofty campaign promises. Here in the US, Californians face a similar dilemma as state deficits continue to rise at a staggering pace and politicians look to the wealthy to pick up the tab.
Newly elected Presidente François Hollande, the first socialist president elected in France in 17 years, promised higher taxes on the wealthy to appease the disenfranchised masses. His spread the wealth philosophies may have won him the election but at what price. Mr Hollande plans to implement a staggering 75% tax rate on earnings over €1m ($1,289,000), on top of a 45% rate for people making €150,000($194,159) or more. He is also expected to raise “wealth taxes” on property assets and end his predecessor’s tax incentives to lure bankers back home. Understandably, high earners in France are investigating their options across the channel in London where David Cameron is lowering the tax rate on income over €150,000($194,159) to 45% from 50%.
Californians face a similar dilemma now that the state’s deficit has ballooned to $16 billion, an enormous increase over the $9.2-billion estimate in January. Governor Jerry Brown this week submitted more than 1.5 million signatures to place a tax measure on the ballot that would temporarily(when has a tax ever truly been temporary) raise the state sales tax, already the highest in the U.S., to 7.5 percent from 7.25 percent. It would also boost rates on income starting at $250,000. The 10.3 percent levy on those making $1 million or more would rise to 13.3 percent, the most of any state.
A 13.3% state tax in California compared to let’s see 0% Florida state income tax is a significant incentive for businesses and high earners to give the Sunshine State a closer look. With Governor Rick Scott keenly focused on job creation and intensives for new businesses, Californians could enjoy the coastal lifestyle they garner on the west coast at a much more attractive price here on the east coast.
While Scott has had a bumpy ride since landing in the governors mansion less than two years ago, his determination to revive the Florida economy through new business development is sorely needed. He recognizes that Florida can not flourish on retirees and vacationers alone. Florida’s economy desperately needs a broader business base beyond the hospitality and real estate industries.
Perhaps the mismanagement and unrealistic promises that caused the unfortunate crisis in California will provide Florida with a lesson and an opportunity. It’s really quite simple, words we would hear our grandparents say, “Don’t promise what you don’t have and be grateful for what you do have.”
Florida has gorgeous natural beauty, world-class cities with endless cultural and entertainment opportunities, some of the best universities and secondary schools in the country and NO state income taxes. So grab your surfboards; the sun is shining in Florida TOO!