As California is a high-tax state, the impact on philanthropy can be significant, as this article from the Wall Street Journal (subscription required) reports.
An excerpt.
[A new study of the period 1999-2008, Migration of Wealth in New Jersey and the Impact on Wealth and Philanthropy]… “found that in the decade’s first half New Jersey experienced a “substantial increase in both household wealth and charitable capacity,” otherwise known as “expected giving”. During those five years, the Garden State had a $98 billion net influx of capital due to wealthy households moving into the state, and it enjoyed a corresponding $881 million increase in “charitable capacity.”
“The Garden State was booming. Then the trend reversed. From 2004-2008, author John Havens found “a large decline in the number of wealthy households entering New Jersey” as well as “a moderate increase in the outflow of wealthy households leaving.” The result: a net decline of $70 billion in household wealth while the “expected giving” became a net outflow of $1.132 billion.
“So what happened in 2004? The study doesn’t purport to explain what caused the wealth movements. But the state’s most notable economic policy event that year was an increase in its top income tax rate to 8.97% from 6.37%, on incomes starting at $500,000. That’s a 40% increase.”
About
- David H. Lukenbill
- I am a California native, married, we have one daughter and live close to the American River with two cats and all the wild critters we can feed. I am a management consultant to nonprofit organizations and have an Associates of Arts degree in Administration of Justice from Sacramento City College, a Bachelor of Science degree in Organizational Behavior from the University of San Francisco and a Master of Public Administration degree, also from the University of San Francisco.