Democrats & Taxes: California is “#1 “
As California goes, so the nation? Let’s hope not.
We thought this was worth posting in its entirety, c/o WSJ.
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California as No. 1
July 17, 2008; Page A14
Wall Street Journal
New York City has long been the highest tax jurisdiction in the United States, but California politicians are proposing to steal that brass tiara. California faces a $15 billion budget deficit and Democrats who rule the state Legislature have proposed closing the gap with a $9.7 billion tax hike on business and “the rich.” There’s a movie that describes this idea: Clueless.
The plan would raise the top marginal income tax rate to 12% from 10.3%; that would be the highest in the nation and twice the national average. This plan would also repeal indexing for inflation, which is a sneaky way for politicians to push middle-income Californians into higher tax brackets every year, especially when prices are rising as they are now. The corporate income tax rate would also rise to 9.3% from 8.4%. So in the face of one of the worst real-estate recessions in the state’s history, the politicians want to raise taxes on businesses that are still making money.
This latest tax gambit was unveiled, ironically enough, within days of two very large California employers announcing they are saying, in the famous words of Governor Arnold Schwarzenegger, “hasta la vista, baby” to the state. First, the AAA auto club declared it will close its call centers in California, meaning that 900 jobs will move to other states. “It costs more to do business in California,” said a AAA press release, in the understatement of the year.
Then last week Toyota announced it is canceling plans to build its new Prius hybrid at its plant in the San Francisco Bay area because of the high tax and regulatory costs. Adding to the humiliation is that Toyota will now take this investment and about 1,000 jobs to a more progressive and pro-business state: Mississippi.
There is already a reverse gold rush going on in California and the evidence points powerfully toward high tax rates as a culprit. Census Bureau data show that, from 1996-2005, 1.3 million more Americans left than came to California. And the people who are leaving are disproportionately those with higher incomes: the very targets the Democrats want to tax more.
The liberal fairy tale is that the rich “don’t pay their fair share.” The reality is that there’s no state in the country more dependent on six- and seven-figure earners to pay its bills. Those with incomes of more than $100,000 pay 83% of the state’s income taxes, and the richest 6,000 of the 38 million Californians pay $9 billion in taxes. Every time a rich person like Tiger Woods departs, the state fiscal problem deepens.
The Democratic tax plan will give rich people a further incentive to flee at the very time the real-estate market is in collapse. New housing data reveals that the average California home price fell by 28% from June 2007 to June 2008, almost double the decline of any other state. The politicians in Nevada, the state with the third worst real-estate market, are hoping California raises taxes, because this could be a fast way to revive the Reno and Las Vegas housing markets.
What the politicians in California refuse to address is their own overspending. State outlays were up 44% over the past five years, meaning that California is spending at a faster pace than even Congress. Minority Republicans in the Legislature say the solution is a hard expenditure cap – like 46 other states have. Yet even in the face of the giant deficit, Mr. Schwarzenegger and the Democrats want to pass a new $9 billion water bond, a $14 billion state-run health insurance program, and the most expensive climate-change program in the country.
It may be that California Democrats are trying this now as a kind of trial run for Barack Obama next year. The Illinois Senator also believes he can solve the federal government’s fiscal imbalance by imposing higher tax rates on small business employers and the wealthiest Americans. If they can get away with it in Sacramento, look for a national reprise next year.
July 26th, 2008 at 8:45 am
But you see, you’re overlooking the one greatest tenent of faith of the California Democratic Nuthatch.
to wit:
“We know best”
You, Mr Average Californian are too stupid to understand how $200 a gallon is bad for your budget.
you’re too stupid to wear a helmet riding a bicycle around the block,
you’re too stupid to drive and use a cell phone at the same time,
too stupid to fasten your seat belt,
too stupid to not smoke,
too stupid to wash your car in your own driveway,
too stupid to own a gun,
too stupid to know that hot coffee is hot,
too stupid to allow your teenage daughter to have an abortion,
too stupid to home school your own children,
you’re too stupid to even know transfats are bad for you,
so WE, Mother Superior government, are going to either over regulate or outlaw your bad habits, tax the crap out of them,
or find a judge who agrees with us.
The tragic thing is that more and more Californians who remain here seem to be buying into the security blanket mentality that fosters it. Why think when the government is all too willing to think for you?
Of course, it hasn’t yet dawned on Sacramento that driving business and the wealthy out of the state is not the best way to increase the tax base.
Yet their hasn’t been an election in recent memory without a gaggle of omnibus bond issues, for everything from apple farm subsidies and “clean water” to zebra research. And California voters keep right on merrily increasing their bonded indebtedness under the myth that bond issues, are like free money.
July 26th, 2008 at 11:57 am
Yes, and another stupid ballot innititive here in Los Angeles county is-surprise-a 1/2 cent sales tax hike! Of course it is “all” going for mass transit. Los Angeles county supervisor, Mike Antonivich, has written about the fact that now there is a clear imbalance as to where the funding goes as far as funding for transit project. And these idiots want us to pass another tax? That would make the sales tax in Los Angeles county 9%. God Bless us one and all here in the Not-so-Golden State!
July 26th, 2008 at 11:57 am
I forgot, the Democrats best enabler? Why “Republican” governor, Benedict Arnold!
July 27th, 2008 at 12:32 pm
Isn’t it odd that the people fleeing California at the fastest pace are those with the most money and, quite possibly, the brains required to earn it? Yet shouldn’t the smartest among us be the first to appreciate how indispensible Big Brother is in the guidance of our pathetic, unimportant little lives? So how can such bright people even think of leaving the very peoples’ republic responsible for their wealth and success? Don’t they realize that, absent the watchfull eye and guiding hand of the Sacramento nanny, they will be doomed to fail??!! Just you wait….they’ll be back. Yep. Any time now. Uh huh!
July 27th, 2008 at 1:39 pm
The handwriting is on the wall. The only long-term solution for California is for the State to go bankrupt! In California we are already seeing Cities taking that course, when city councils have passed out so many golden eggs to public employee groups that they have outstripped the local taxpayer’s ability to pay the bill. So too will the State of California be forced into this unfortunate situation. Bankruptcy will surface the real underlying financial problems, and allow solutions to be created to put things back on a sound financial footing. To suggest that the elected clowns in Sacramento can ever hope to solve this problem that they alone have created is wishful thinking. Let’s hope that bankruptcy doesn’t take too long to occur.
July 27th, 2008 at 5:57 pm
Well, of course we always throw every single one of the bastards out. But, of course it would take nothing short of that to really bring about a change.
And, thats the problem isn’t it? Everybody thinks Sacramento is full of crooks, except their guy. So we go on year after year after year reelecting the same ego trips in empty suits that keep on doing the same over spending, over taxing, over dictating our lives about everything from ash trays to light bulbs.
Whats that little blurb from Einstein? Insanity is doing the same thing over and over and over expecting different results.
July 27th, 2008 at 9:14 pm
I wonder how much of that $15B deficit has gone to feeding, housing, incarcerating, medically bankrolling, etc., etc., the criminal aliens doing those jobs we citizens “won’t do” (at their rate of pay)? My guess is the total (with paid taxes figured in, just to be fair) exceeds the deficit.
The only reason I ever go to California is because I’m sent there with a truckload of goods to deliver. I never buy anything there, the company buys as little fuel there as possible, all because I don’t wish to enable those who would take my heritage from me lock, stock and barrel: the donks.
California. Take her. Please. (Back when McCall was guvner of Oregon we had a saying: Come visit but don’t stay, and don’t californicate Oregon.)
July 27th, 2008 at 9:55 pm
The outfit I work for doesn’t have much choice, we either refuel in Colton or Barstow, and then try to make it Belen or La Junta, CO.
THe only good thing is, we own our own facilities and can ship it from Texas or Oklahoma ourselves, but even that costs money that the company could use for other things.
July 28th, 2008 at 8:23 pm
We’ve got a couple of fuel yards in CA, one north, one south. If at all possible we fuel up before we enter the state and get out before we run out. But I understand a lot of companies can’t, and I feel for them.
Someday, the donks will be able to look back on the mess they’ve created with all their brilliant theories and all their compassion, stand back, point their fingers at conservatives and proclaim it’s our fault ’cause we just weren’t with the program, and had we been everything would be just like they dreamed it would be.
You see, in a liberal mind, dream = reality.