Tag Archive: California Diaspora


Which Californian would you rather have running your business: Tim Cook or Gavin Newsom?

Taking into account that Covid-19 indiscriminately hit both Apple and the State of California at the same time in the same place, which entity performed better under nearly identical circumstances?

Under Governor Gavin Newsom’s watch, California with the nation’s highest income taxes (13.3 percent at the apex) and an average sales tax of 8.66 percent recently reported its record $21 billion surplus is now an unprecedented $54.3 billion deficit … that’s a staggering $75.3 billion switch if you are scoring at home. Nonetheless, the state found $75 million in the form of a pander payment to California illegal aliens.

Will they be eligible to vote … some day?

As the chief executive officer of $260 billion Apple with $44 billion in cash reserves, Tim Cook just announced the reopening some of Apple’s national stores this week with many more to follow. The company achieved a 37.8 percent gross margin and 14.3 percent to the bottom line in FY 2019, returning quarterly dividends of $0.82 per share for its shareholders.

As a member of the growing California Diaspora and a best-in-breed investor, who would Almost DailyBrett choose as a responsible fiscal steward?

Hint: Apple shares are up 7.25 percent this year, despite the Corona virus. As CNBC’s Jim Cramer repeatedly has proclaimed, he is only interested in a stock’s future. Share prices are a leading … not trailing … indicator of future performance.

Apple is a leader. California is a laggard.

The same is true with other best-in-breed publicly traded companies including Salesforce.com, Gilead Sciences, Lululemon Athletica, McDonald’s, Microsoft, Nike, NVIDIA and Starbucks. Is the present iteration of California anywhere close to … best in breed?

If California was publicly traded, would a responsible investor select the Golden State or no state income tax Texas and/or Florida?

As the former press secretary for the former Governor of California George Deukmejian (1928-2018), my love for the Golden State is true … your author loathes the present crew in Sacramento. Just ask Tesla boss Elon Musk.

Peddling A False Choice

The bull statue on Wall Street and the True Value hardware store on Main Street are not mutually exclusive.

The countless suggestions of a Berlin Wall type of divide between the two streets is a false choice. Even the stately The Economist fell into this trap.

The reason is simple, millions of investors who live on Main Street, the side streets and the suburbs. Gallup reported that 55 percent of Americans own stocks and/or stock based mutual funds … before Covid 19. America’s Investor Class certainly took a hit with the virus, but there are tangible results indicating without any doubt that investors are coming back, money is coming off the sidelines … heck the NASDAQ is up for the year.

Those who project the end of Capitalism may even be the same to predict the Republicans were the Whigs of the 21st Century, heading for extinction. Whatever happened to these rocket scientists?

Many in America’s investor class are fond of ETFs or Exchange Traded Funds and other versions of mutual funds. Your author is an investor in Fidelity’s Contrafund with $112 billion assets under management (AUM). The fund invests in large caps including Facebook, Amazon, Microsoft, Berkshire Hathaway (think Warren Buffett), Adobe, Google …

Cash needs to be a significant portion of any responsible portfolio, which should include a mutual fund or two.

Almost DailyBrett must pause and ask the investor class (anyone who would care to listen), how about being the manager of your own mutual fund (no fees or commissions)? Why not build a portfolio with your own selection of best-in-breed stocks (e.g., Apple)?

To some, this approach may be too risky. To others, do you really need a paid-by-you investment advisor to tell you that Nike is the number athletic apparel manufacturer in the world? Why not buy the stock when the next inevitable dip comes around?

Buy Low Sell High.

For the most part, America’s Investor Class radiates out from Main Street. To suggest that Wall Street needs to be reined in and economic freedom should be curtailed by those who determine the so-called Public Good is contrary to the best interests of millions investing for retirement, a child’s education, a dream house or a new business.

It takes a free market to raise a child.

Wall Street is Main Street.

P.S. Be careful about investing in The State of California.

https://www.economist.com/leaders/2020/05/07/the-market-v-the-real-economy?

https://www.cnbc.com/2020/05/07/california-faces-a-staggering-54-billion-budget-deficit-due-to-economic-devastation-from-coronavirus.html

https://www.apple.com/newsroom/2019/10/apple-reports-fourth-quarter-results/

State and Local Sales Tax Rates, 2020

https://www.cnbc.com/2020/04/15/california-to-give-cash-payments-to-immigrants-hurt-by-coronavirus.html

https://almostdailybrett.wordpress.com/2019/06/20/californias-growing-diaspora/

What Percent Of Americans Own Stocks?

State Individual Income Tax Rates and Brackets for 2020

Almost DailyBrett’s super-smart tax accountant moved from California to … Nevada.

Wonder why?

How many other wise people did the math, followed in her footsteps, and made a move in their best lifestyle and financial interests?

Let’s see, the state income tax in California is the nation’s highest, maxing at 13.3 percent … for now. Yikes.

The state income tax in Nevada is … nada.

Hmmm … given a choice … what action will a clever tax accountant with disposable income make? Ditto for anyone else with a brain and a pulse.

Growing up, your author read countless accounts about people pulling up stakes in the rust belt and setting sights for the sun belt.

That trend continues unabated today except when it comes to one sun belt state in particular, California.

After the upcoming 2020 decennial Census, the Golden State is projected to lose a seat in Congress (and a corresponding electoral vote) for the first time in its 171-year history.

California Governor Gavin Newsom and his Sacramento disciples are desperately trying to ensure an accurate count to avoid the indignity under their watch associated with losing an electoral vote.

Let’s see, California with 12 percent of the nation’s population is the “home” to 22 percent of the nation’s homeless. Can California count those who don’t have a home — even newly arrived homeless — as residents? What about those who came across a Southern border … ? Count the names on the tombstones?

Oh heck, let’s just slap on a few more social engineering regulations (e.g., rent control, solar panel installation requirements) and raise taxes again and again … and pretend what’s happening is not happening.

Which State Gains From California’s Diaspora?

We know from CNBC’s Robert Frank that population outflows are costing New York $10 billion in revenues (largest hit in the nation), and Florida is gaining $16 billion in increased revenues as a result of in-migration.

The same report indicated that California is losing $8 billion in state revenues. Those lost souls are no longer in the gravitational pull of the Franchise Tax Board (FTB) and Golden State regulatory social engineers.

California and Alabama (two peas in a pod?) appear to be the only sun belt states slated to lose congressional seats after the next Census.

Conversely, there are nine states in the union with zero state income taxes, and none of them will lose a congressional seat. In fact, Texas is set to gain three congressional seats from 36 to 39, and Florida is expected to add two more from 27 to 29. These two red states are getting politically stronger.

Should we assume that no state income tax Texas or Florida will benefit from California’s lost congressional seat?

Considering that California lost 700,000 residents in 2018 alone, and 86,000 of this number moved to Tejas … the red Lone Star State could be the beneficiary of the blue Golden State’s electoral college loss.

Late last year, retail investment pioneer Charles Schwab announced it will move its corporate headquarters from San Francisco to Dallas. Can you blame them?

Let’s see, the corporate tax in San Francisco is 8.84 percent, Dallas, 0.75 percent. San Francisco also imposes a 0.38 percent payroll tax, and a 0.6 percent gross receipts tax. Typical monthly rents in The City are $3,870 and only $1,200 in Big D.

Looking North, Looking East …

Keep in mind that no sales tax Oregon is expected to gain one congressional seat, raising its number of electoral votes from seven to eight for the 2024 general election. The Grand Canyon State anticipates adding another seat to its congressional delegation, increasing Arizona’s electoral votes from 11 to 12.

To be fair, this Almost DailyBrett analysis needs to acknowledge that California with its gorgeous weather and picturesque coastline, not to mention Silicon Valley, will still have the largest electoral count just with 54 votes, instead of 55.

As a press secretary for former California Governor George Deukmejian (two terms, 1983-1991), your author noted the Golden State’s Electoral College count was 45 in 1980, 47 in 1984 and 1988, and 54 in 1992. California’s electoral college number jumped nine congressional seats in those heady days, when the state was not raising taxes and not burdening it’s citizens and businesses with onerous regulations and social engineering schemes.

Taxes and rising expenses/burdens are not the only reasons for the flight of California’s Growing Diaspora. Congestion is becoming unbearable with 2 million more joining the commuting ranks since … 2010.

Housing costs are prohibitive, not to mention the property taxes that go along with these rising market values. The sweet two-bed, one-bath 960-square foot Oakland fixer-upper (see photo above) is on the market right now for … $988,000.

Nice curb appeal.

Some may want to sweep the lost congressional seat under the proverbial rug and recite tired stats about California being one of the largest economies in the world. Almost DailyBrett sees the loss of an electoral vote as the canary in the mine.

People are voting with their feet, and California is the loser … Texas, Arizona, Nevada and Oregon are the winners.

https://www.latimes.com/california/story/2019-12-31/la-me-ln-california-apportionment-2020-census

California likely to lose congressional seat for first time in history after 2020 Census

https://www.dallasnews.com/business/real-estate/2019/12/10/almost-700000-californians-moved-out-of-state-last-year/

https://www.wsj.com/articles/schwab-leaves-san-francisco-for-texas-11574900348

https://almostdailybrett.wordpress.com/2019/06/20/californias-growing-diaspora/

California’s inept central planners

Walking along Berlin’s Tiergarten park trails, one must be wary of stepping in the Hundehaufen.

On virtually any street in the permissive sanctuary city San Francisco, one is hard pressed to avoid encountering Peoplehaufen as well as needles and refuse.

San Francisco has long been a donut with a hole in the middle. The multi-millionaires of Rincon Tower literally must negotiate homeless, druggies and poop droppings to enter and leave their trendy lofty pads. The middle class is nowhere to be found.

Has a stinking pile of human poop replaced the brown bear as California’s mascot?

Is the abandoned high-speed train from nowhere (e.g., Bakersfield) to nowhere (e.g., Merced) become another metaphor for a one-party autocratic state in which so much as gone so wrong, way too fast?

The Golden State with about 12 percent of the country’s population is the “home” to approximately 135,000 homeless or 22 percent of the nation’s total.

For the first time after the 2010 census, California did not gain a new congressional district (electoral vote). After the next census, the Golden State will contract by one congressional district, and actually lose an electoral vote.

Part of the reason is a serious undercount (unreporting undocumented folks) by the state’s population experts. The other reason is people are leaving (net 1 million or 2.5 percent of California’s American resident population outflow in 10 years ending in 2016), accelerating the growing Golden State diaspora.

California will move from 55 to only 54 electoral votes – still the most in the nation – and yet the 40-million person state has less sway over the presidential general election winner.

The blue state is in the bag. Republicans can still raise money in California – The Mother’s Milk of Politics – only to spend it in states that matter (i.e., Wisconsin, Michigan, Pennsylvania, Ohio, Florida).

California can still brag about its fantabulous weather, the software and hardware geeks of Silicon Valley, and how its $3 trillion GDP places California only behind the U.S., China, Japan and Germany in business productivity (not business climate).

The only problem with these assertions is they were all true back in the 1980s, when the author of Almost DailyBrett served for eight years as a chief message developer and spokesperson for California Governor George Deukmejian.

California was a “Great State” with a “Great Governor” back then. You can’t make that assertion today, not even close.

In the following decade, your author served in a similar capacity for Silicon Valley’s largest industry, the microcircuit designers and manufacturers.

Being modest, Almost DailyBrett knows a thing or two about California. Alas your author, similar to so many others is viewing California with great regret across state lines (e.g., no sales tax, lower cost Oregon).

Speaking ex-cathedra, the chances are slim and none – and “Slim” is out of town – that your author will ever again reside in über-congested California with its stratospheric property values, staggering high taxes of every sort imaginable, and intractable problems including rampant homelessness, acute Central Valley poverty, illegal immigration and yes, poop on the streets.

Want to purchase for $840,000 or more a 1,000-square feet fixer-upper 1905-era bungalow with an annual $9,000 property tax bill in God-awful San Jose? Undoubtedly, it is freeway close to your work in bucolic Milpitas five miles away. It will only take 45-minutes to get there.

No Checks. No Balances

“Power tends to corrupt, and absolute power corrupts absolutely.” – John Dalberg-Acton, English politician, historian and writer

California is in dire need of an “Iron Duke.”

Alas, the Duke passed away and undoubtedly resides in heaven. What could he be thinking as he looks down at what was once the greatest state in the nation on his watch, only to see it easily passed by no-state income tax Texas and Florida?

Governor George Deukmejian refused to raise taxes to close a $1.5 billion deficit, a going away gift from his predecessor Jerry Brown. California’s vibrant economy with all Golden State geographies contributing, retired that staggering debt (1980s dollars) in less than one year without demanding taxpayers dig deeper into their wallets.

Next month, California will once again increase its highest gas taxes in the country (an excise tax of $0.473 on top of a $2.25 per gallon state sales tax). The state income tax regime ranges from 1 percent to 13.3 percent. The sales tax in Los Angeles County is (gasp), 10.5 percent.

Believe it or not, San Francisco City County is lower at 8.75 percent.

In 10 days, California with its record $21.5 billion surplus will surpass New Jersey as the state imposing the largest tax burden on its citizens. Something is not working in California. Will another tax, another entitlement, another social engineering scheme save the day?

Similar to other one-party “C” states (i.e., China, Cuba), California needs a loyal opposition, a few brave souls to demand that homo-sapien poop on the streets is not an acceptable representation of what once was, The Golden State.

Heroes are hard to find in Sacramento these days.

Oh heck, let’s just enjoy another California $15 six-pack with 10.5 percent sales tax and mandated deposit fee. Cheers.

https://www.nationalreview.com/2019/06/california-third-world-state-corruption-crime-infrastructure/

https://www.latimes.com/business/la-fi-california-economy-gdp-20180504-story.html

https://www.latimes.com/politics/la-pol-sac-skelton-democrats-census-trump-2020-20180125-story.html

https://lao.ca.gov/laoecontax/article/detail/265

https://almostdailybrett.wordpress.com/2019/04/01/californias-rarefied-air-tax/

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