California’s population is on the decline, and high-income earners have joined the exodus

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California’s population is on the decline
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SACRAMENTO — Contrary to previous beliefs, even the affluent are now joining the exodus from California, marking a new chapter in the state’s ongoing population decline.

This emerging trend is causing concern among liberal Democrats, who have long relied on taxing the wealthy to fund expansive social programs.

The state, once a magnet for individuals seeking job opportunities, sunshine, and an improved quality of life, is now witnessing an unprecedented outflow of residents.

Factors contributing to this demographic shift include an overall decrease in population due to more people leaving than arriving, a significant slowdown in the influx of foreign immigrants, a declining birth rate, and an aging population.

California’s population is on the decline Historically, California Exodus has been a destination for those seeking economic prosperity, drawing people from all corners of the country.

However, the narrative is changing, with descendants of previous generations now finding more appealing prospects elsewhere. The primary driver behind this exodus is the soaring cost of living in California, making other states more attractive for individuals looking to maximize their earnings.

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While the state’s major cities remain densely populated, strained infrastructure and limited resources contribute to the overall dissatisfaction leading to departures.

California remains the most populous state, with an estimated 39 million people in the previous year, but the gap with contenders like Texas, boasting 30 million inhabitants, is narrowing.

Earlier optimism about a continually growing population has proven misplaced. Initial projections anticipated reaching 45 million residents by 2020 and 59 million by 2040.

However, the state hit a peak of 39.6 million in 2019 and has experienced a steady decline since.

A recent revelation by the independent Public Policy Institute of California challenges the previous assumption that only lower-to-middle-income individuals were leaving.

The institute’s findings indicate that households across all income levels, including higher-income brackets, are contributing to the outward migration.

The housing crisis in California plays a pivotal role in this demographic shift. The median price of a single-family home is $735,480, a figure beyond the means of many residents.

California’s population is on the decline
California’s population is on the decline

Factors such as a shortage of housing supply, a cumbersome regulatory environment, and legal challenges to housing developments further exacerbate the problem.

California’s population is on the decline, and high-income earners have joined the exodus

Notably, the departure of high-income individuals, although numerically smaller, has intensified, reaching 220,000 in 2021.

This shift has the potential to impact the state’s finances significantly, given that the top 1% of earners contribute nearly 50% of state income taxes, while the top 10% contribute around 80%.

The state’s exorbitant 13.3% income tax rate is cited as a major factor driving affluent individuals away.

Texas, with no state income tax, emerges as a preferred destination for California expatriates, followed by tax-friendly states like Nevada, Washington, Florida, and Arizona.

The ability of many high-income professionals to work remotely for California-based companies further accelerates this migration trend, posing potential challenges for the state’s economic landscape in the long run.

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