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For those of you who follow the mlb, you likely know that Merrill Kelly is an ace pitcher who was recently traded to the Texas Rangers in the year 2025. And he's very good. He's crafty with his throws, he keeps his pitches in tough spots, and he's really good at adjusting his approach to keep the hitters guessing at what he's going to be doing next. And this range of skills has translated into a lot of money for him. And in 2025 he was making somewhere around $7 million a season. But in 2026 he was given two separate offers. He was offered $20 million a year to play for the California Padres. Or separately, he was given a $13.3 million a year offer to play for the Arizona Diamondbacks. Looking at it from the surface, it seemed like an absolute no brainer. Except he chose to go for the Diamondbacks. And this wasn't necessarily just because he liked Arizona more. It was simply because of taxes. And the taxes over in California are so high that that $7 million difference between the two different contracts translated to only a $2 million difference in what would have actually been hitting his bank account. In Arizona he'd make $13.3 million a year and take home about $8 million. But in California he'd on paper be making $20 million a year but taking home about 10 million. And I guess for him that wasn't enough to make the move to the Golden State. In explaining his decision, here is what he told the media. Quote, I don't think it's any secret on how much money you get taken out of your pocket when you go to California. It's just like I said, they take too much money out of my pocket, man. The taxes over there are a different level. And the different level that he referenced in that statement of his, it can easily be seen with another high profile recent case. The most recent super bowl happened to take place over at Levi's Stadium in Santa Clara, California in and as I'm sure many of you know, the Seattle Seahawks wound up winning that game. But what many people don't know is that the Seahawks quarterback Sam Darnold, he wound up owing about a quarter of a million dollars in job taxes to the state of California after winning the game. That was, by the way, roughly $70,000 more than he actually earned for that game. And the reason for that disparity has to do with how California taxes out of state athletes. California has a rule that out of state athletes must pay state income taxes. And based on the number of days that they work within the state of California. And the Seahawks during their super bowl trip to California totted eight working days. So the California Treasury Department, they took Darnold's $35 million a year salary, they divided it by 200 working days, they multiplied it by eight, which is the number of days he worked in California, and they taxed them at the higher tax rate that they have in California. If he had played that same super bowl game over in Arizona, instead of owing a quarter million dollars, he would have instead had an extra $200,000 in his purse. But because he played in California for just eight days, he wound up paying $70,000 to win the Super Bowl. Now these types of high profile cases involving athletes, they obviously don't apply to the everyman, but actually these cases are just the most visible examples of this phenomenon. A phenomenon I should mention that does a pretty apply to normal people over in California. You see California's recent batch of new taxes, they have essentially led to an exodus of both wealthy tax paying individuals as well as corporations moving out of the Golden State. You have Tesla, SpaceX, the Boring Company, Oracle, Hewlett Packard, Chevron Public storage, Charles Schwab, realtor.com, yamaha, as well as over a hundred, I think hundreds of smaller businesses you might have never heard of leaving California and moving to what they consider more business friendly states over the last six years, from the year 2020 up until 2026, Texas has been the biggest beneficiary of this exodus, followed by Florida and Tennessee. And what's happening with businesses and corporations is also being mirrored by the individual residents as well. To that end, you have data from both U Haul alongside the California Department of Finance showing that last year in 2025, 216,000 residents left the state, which was similar to the 239,000 that left the year before that. In fact, California is one of the few states in America to actually be losing population year after year. And that loss of able bodied humans translates to a loss, a real world loss of tax revenue. Quote Tech investor Chamath Palihapitiya estimates that the total wealth that has left California in the past month is $1 trillion. That was back in January of 2026. He wrote that we had $2 trillion of billionaire wealth just a few weeks ago. Now 50% of that wealth has left. Taking their income tax revenue, sales tax revenue, real estate tax revenue, and all their staffs and their salaries and income taxes with them. California is estimating budget shortfalls this year of $3 billion to $18 billion. Mr. Polly Hapatia noted that California billionaires paid 13.3% of their income to to the state every year and with them gone, the middle class will have to foot the bill. Seemingly understanding this, California's middle class is also fleeing. Last year marked the sixth consecutive year that California ranked first among the nation's states in terms of outbound migration. With more one way U haul customers leaving than arriving. The Golden State has led the nation in albound migration for six years in a row. And indeed it is this exodus of corporations, wealthy individuals as well as regular middle class Americans that's causing the state to rake in somewhere between 1 billion to $2 billion less per year in taxes. And so it's a bit ironic. The government wants to take in more money so they raise taxes to do so. People leave because they just don't want to get taxed anymore and then the government winds up with less money than if they did nothing at all. This concept, by the way, it does have a name in economics. It's called the Laffer Curve. It shows the relationship between the tax rate and the tax revenue. And so basically, if the tax rate is 0%, then the government obviously gets $0. But then if the tax rate is 100%, the state also gets $0 because people stop working at that point. And so somewhere between those two points is the optimal tax rate. Now where that exactly is on the curve, it's hard to perfectly determine. There's a lot of different variables to consider and to factor into any specific situation and so you can test and see what happens. And judging by the exodus of wealth, both corporate and personal, out of California, it looks like they might have found themselves on the right side of the curve. Taxing more but getting less. But hey, let me know your thoughts on the subject. I know a lot of you watching this program based on the metrics I can see on the back end happen to live in California. And so what do you think about the tax situation? Is it really as bad as the data makes it seem? Do you think you get enough services and amenities back from the state to justify the high cost? And also, are you yourself considering moving? Please leave your thoughts in the comments section below. I'll be reading them tonight as well as into the week. Also, all of my research notes for today's episode will be down in the description box below, which is that same description box right below those like and subscribe buttons, both of which I hope you smash so this video can reach ever more people via the YouTube algorithm. People who perhaps might be thinking about moving themselves to California, not knowing about the tax situation. So you might be helping them out by smashing those, like, buttons. Thank you so much for that. And then, until next time, I'm your host, Roman, from the epic times. Stay informed. Most importantly, stay free.