Billionaire Jeffrey Gundlach Suggests He’s Contemplating Leaving California Over Taxes
Billionaire bond fund manager Jeffrey Gundlach said Saturday that he is contemplating leaving California state and moving to a lower-tax state.
The chief executive officer of asset manager DoubleLine Capital wrote on Twitter that public figures including Elon Musk, Joe Rogan, and Ben Shapiro “are leaving California to escape incompetent governance.”
“The ‘response’ from Sacramento? Wealth and massive income tax increases on job creators (AKA ‘the wealthy’),” Gundlach added. “Should I align with 3 smart guys, or Sacramento? Hmmm.”
Elon Musk, Joe Rogan and Ben Shapiro, to name just a few, are leaving California to escape incompetent governance. The “response” from Sacramento? Wealth and massive income tax increases on job creators (AKA “the wealthy”). Should I align with 3 smart guys, or Sacramento? Hmmm.
— Jeffrey Gundlach (@TruthGundlach) September 26, 2020
California, like many states in need of revenue amid the ongoing CCP (Chinese Communist Party) virus pandemic, has proposed increasing taxes on its richest residents.
Democrats in California have proposed raising the highest tax rate to 16.8 percent from 13.3 percent, for annual salaries over $5 million, with changes retroactive to Jan. 1. New Jersey lawmakers reached a deal Sept. 17 to raise the tax rate on incomes above $1 million to 10.75 percent from 8.97 percent.
Gundlach, 60, formerly head of the TCW Total Return Bond Fund, has an estimated net worth of $2.2 billion.
States such as Florida, which has zero state income tax, are seeing growing interest from high earners and hedge fund managers to relocate. In the past decade, Florida’s population has grown by roughly 1.1 million, according to the the “Rich States, Poor States” annual report by the American Legislative Exchange Council (ALEC), a conservative nonprofit organization.
Meanwhile, other states with the highest tax burdens, including New York and Illinois for example, have continued to lose residents this year as tax rates have a significant effect on the growth and prosperity of the states.
According to ALEC’s report, the bottom five states on the economic outlook ranking were New York, Vermont, New Jersey, Illinois, and California.
“When you look at the bottom states again, you see those states that have the highest tax rates, and they’re not phasing out, either,” economist Arthur Laffer, who co-authored the report, said on Aug. 11 during a webinar hosted by ALEC.
The report illustrates each states’ competitiveness and economic outlook using 15 equally weighted policy variables, including tax rates, regulations, spending, and right-to-work labor policy. It also examines trends from past decades as well as policy choices made in 2019.
Robert Wood, managing partner of Wood LLP, a law firm focused on taxes, told Bloomberg that he receives multiple queries weekly from people looking to leave California, noting that it is an uptick on the past.
“Some cite the proposals, and some also note the already tough taxes,” he said.
Emel Akan and Reuters contributed to this report.