Can someone explain to my why its an advantage to live in a state with zero income tax? Does it really matter how the state makes its money. If it does not come from your paycheck directly they get it other ways.
For instance in Florida you pay ~2% property tax on your assessed value and in california you pay ~1% on your purchased value. If you bought property at 500k and its appreciated to 1 million in CA you pay 5k in FL you pay 20k.
That's for state tax only - federal would be another good chunk on top of that - but yeah, assuming that's all straight-up income (not investments or anything), just the state-level taxes should be about 100k at California's current rates.
Sure, but consider that the majority of people in SF/SV are priced out of the market and are instead renters -- they're getting the worst of both worlds.
The point is that as a non-homeowner, you don't pay property tax so you don't benefit from low property tax rates. Instead you're paying rent that's among the highest in the nation. And your salary, which better be large to deal with the outrageous rent, is being taxed at one one of the highest rates in the country. It's the absolute worst tax situation to be in.
You assume both states ultimately take in the same amount of money, which is false. California just takes more money from its residents. Florida isn't 'hiding it' in other taxes.
For instance in Florida you pay ~2% property tax on your assessed value and in california you pay ~1% on your purchased value. If you bought property at 500k and its appreciated to 1 million in CA you pay 5k in FL you pay 20k.