California Is Impossible For The Middle Class

Authored by John Seiler via The Epoch Times,

As we head toward the end of another year, I’m remembering several friends who left in 2022 for cheaper states. And I’m thinking about several other friends who are planning on leaving in 2023 or 2024.

The fact is California is difficult, often impossible, to live in if you’re in the middle class. The wealthy can afford to live here, although they often leave too, because that 13.3 percent top income tax rate really digs in, especially when they dream of moving to 0 percent Texas, Florida, or Nevada. The poor suffer, but California has a generous welfare state, so it’s easier in many ways for low-income residents than living in another state.

It’s the middle class, the rock bed of any society, that bears the brunt of California’s brutal living conditions—amidst the sublime weather. There are three areas where the middle class is hammered: taxes, high housing costs, and a broken education system. Let’s look at them as we peer toward 2023: a little winter organizing of our political mentalities.

1. Taxes.

 The middle class does not pay that 13.3 percent rate on millionaires, but it does pay what long was the “top” tax: 9.3 percent. California’s income tax rates were indexed for inflation in 1978. But that was only after a decade of inflation pushed the middle class into the then-top rate of 9.3 percent. That is, today the middle class pays at a rate originally intended only for the very rich.

The middle class in no other state pays income taxes that high. Of the states, seven have no income tax at all. And 37 have a top rate below 9.3 percent.

Here are the five states after California with top income tax rates above 9.3 percent: Hawaii at 11 percent; New York 10.9 percent; New Jersey 10.75 percent; Oregon 9.9 percent; and Minnesota 9.85 percent.

However, for the middle class, the percentage is lower. For someone making $80,000 a year, here’s the marginal percentage tax rate for a single filer:

• California 9.30

• Oregon 8.75 (and no state sales tax)

• Minnesota 6.80

• New Jersey 6.37

• New York 5.97

• Hawaii 5.86

Year after year, that adds up. Moreover, in California, $80,000 really isn’t middle class, but lower middle class. Admittedly, New York, New Jersey, and Hawaii also are high-cost states in many areas.

But those states have much lower taxes for the middle class. And it’s easier to be in the middle class in those states because most things, especially taxes and property, are cheaper.

2. Housing. 

At Chapman University’s 45th Economic Forecast, held Dec. 13 and co-sponsored by The Epoch Times, economist and President-emeritus Jim Doti brought up an interesting number I hadn’t heard before. “Home prices increased 400 percent since 1990” in California, he said. “5.2 percent per year. Overall inflation then was 2.6 percent—roughly half. Home prices increased two times CPI,” the consumer price index.

I came to California just before that, in 1987, and rented a nice one-bedroom apartment in Huntington Beach for $600 a month. In 1993 I moved to a nearby place and the price was about the same, $700 in the late 1990s. The rent crept up over the years to $1,000 in 2010, still tolerable. Then the rent started soaring, and I had to move. Today those two places rent for $2,429. My income sure didn’t go up four times in that period.

The median price for a home in 2021 was $854,280 in Los Angeles County and $1.2 million in Orange County—although both have dropped a bit in 2022. And the median price for all California was $554,866 in 2020, lower because the Inland Empire and other inland areas are cheaper.

But here are the median home prices in the other states I listed above for their relatively high income taxes:

• Hawaii $636,451

• Massachusetts $422,856

• Oregon $361,970

• New Jersey $335,607

• New York $321,934

And here are some states with no income tax:

• Washington $409,228

• Nevada $301,753

• New Hampshire $296,163

• Florida $ $245,169

• Texas $207,301

But according to the U.S. Census bureau, the median household income in California in 2021 was only $84,097, compared to $70,784 for the national median. That is, it’s 19 percent higher in the Golden State—which hardly covers the vastly greater expense of taxes and housing in California.

Which makes me wonder why I’m still living here. These two things—the highest taxes and second-highest housing prices—make it almost impossible for the middle class to accumulate capital to buy a home, start a business, or even raise a family.

3. Education. 

I’ve written several articles here in The Epoch Times on the horrible state of the public schools in California, such as “Lessons From Running for California Schools Chief: Interview,” on Nov. 14. Test scores, already among the worst among the 50 states, dropped further during the excessive COVID-19 school lockdowns.

Then there’s the politically correct social engineering pushed on the students, beginning with critical race theory, now mandated in state schools under the guise of “ethnic studies.”

No wonder several of my friends left because they didn’t want their kids indoctrinated. A couple other friends with toddlers are planning to leave the next couple of years before the kids go to kindergarten.

Private schools are an option but cost money the middle class doesn’t have. Home schooling is another option but takes dedication some families don’t have, and is next to impossible if both parents are working—itself virtually a necessity in this expensive state.

Some school boards are kicking back against the indoctrination. Temecula Valley Unified School District on Dec. 13 banned critical race theory, while also adopting a resolution condemning racism. But few districts do this. And how long can Temecula and other districts hold out on the side of the parents and students against the pressure from the state government and the powerful teachers unions?

Conclusion: Adios, Middle Class

It’s simply impossible to be in the middle class in California, especially if you have kids. It’s no wonder more people keep leaving. At the Chapman Forecast, Doti provided the latest data, “Net domestic migration has been negative since 2011,” meaning more people leaving for other U.S. states than came here. “For the most recent year, 2021, it was negative 280,000.” If that keeps up, during the 2020s decade, California would lose 2.8 million people to other states.

Gov. Newsom touts his “California Way” as a contrast to the policies of the conservative governors of Florida and Texas. “They’re doubling down on stupid, and we will not follow their path, we’re going in a completely different direction,” he boasts. But the out-migration shows the state’s middle-class residents themselves are going in a completely different direction from Newsom—out of the state.