Nevada looks attractive to Californians facing tax hikes

It’s not like they haven’t rushed from high-taxed California to low-taxed Nevada before. They have. And in droves.

But Election Day in California resulted in actions that will likely cause a fresh rush of Californians coming here to escape new higher taxes there.

Proposition 30 in California passed by 54 percent to 46 percent. It does two things to raise money for education. It raises the state sales tax by a quarter-cent for four years. It also creates a four-tier system, increasing income tax rates for those earning more than $250,000 a year by 3 percent for seven years.

The highest rate is for those making more than $1 million, who will see their income tax rate rise to 13.3 percent. Combine that with federal income taxes, and it’s a reason to flee.

On top of those increases, the California Legislature now has a two-thirds majority of Democrats, enough to pass other tax increases as well.

The Wall Street Journal bemoaned this in a Nov. 9 editorial: “The silver lining is that Americans will be able to see the modern liberal-union state in all its raw ambition. The Sacramento political class thinks it can tax and regulate the private economy endlessly without consequence.”

However, the Journal holds out hope that “at least Californians can still escape to Nevada or Idaho.”

Actually, retired Nevada archivist Guy Rocha, a liberal to his toes, predicted the same thing. He expects wealthy Californians will decide to relocate to Nevada, presuming they can sell their California homes.

Maybe that’s a positive for Nevada.

Rocha heard that a real estate agent in Nevada’s ritzy Incline Village was flooded with calls the day after the election, asking about the housing market there, and the availability.

Gov. Brian Sandoval now has another weapon in his arsenal to lure Californians to the Silver State, since the new Nevada Legislature is controlled by Democrats, but not by a two-thirds majority. That means legislative Democrats won’t be able to shove a tax plan through knowing they could override any veto by Sandoval.

Our GOP governor won’t be able to brag on Nevada’s schools, social services or health care. He won’t want to emphasize the recent report about the high number of teen suicides in the Silver State. There will be plenty of bad things he will want to gloss over in any recruiting pitch.

But he can assure those making more than $1 million a year they won’t be paying 13.3 percent in income taxes. In fact, they won’t be paying any state income tax here.

Sandoval will be able to assure would-be California transplants that tax hikes probably won’t happen in Nevada any time soon.

Clark County voters voted 2-1 against raising taxes for a plan to help some Clark County schools raise money for capital construction and physical improvements.

In Henderson, voters refused to raise their taxes for the Henderson Library District, causing the closing of two library branches, on top of already reduced hours.

The call Friday by County Commissioner Tom Collins and City Councilman Steve Ross for a property tax increase is a nonstarter.

But if Californians do flock here as Rocha and the Wall Street Journal anticipate, the housing industry could well benefit. Besides gaming and mining, the housing industry is what drives our economy; so there is likely a silver lining for Nevada, even while Californians wonder how much longer they can afford to live there.

One acquaintance of mine said she plans on visiting her sister in San Diego as often as she can, because she doubts her sister can afford to live there much longer.

Come to think of it, I have friends in San Diego. Maybe I should foist myself on them while I still can.

Jane Ann Morrison’s column appears Monday, Thursday and Saturday. Email her at Jane@reviewjournal.com or call 702-383-0275. She also blogs at lvrj.com/blogs/morrison.