Posted on 03/25/2012 6:44:58 AM PDT by SeekAndFind
California Tax Revenue Plunges
Inquiring minds have noticed a huge plunge in California Tax Revenue for the month of February compared to February 2011.
That is a 22.55% plunge in spite of the fact that this February was a leap year adding a day to the calendar.
Madeline Schnapp, at TrimTabs Investment Research sent me a quick note regarding that plunge a few days ago.
Madeline writes...
Hello MishMany Explanations for the Unemployment Puzzle
I came across this little tidbit from the February report from the Comptroller's office of the State of CA.
In Feb 2012 income tax receipts are down $328 million y-o-y, or 16.5%. Ouch!
What about retail sales taxes? CA had a "temporary" sales tax hike of one cent that expired last July. Adjust the data to reflect that change, it looks like sales taxes in February are $400 million y-o-y +/-, a decline of about 12.4%. Double ouch!
That doesn't sound like robust growth to me.
Something About the Economy Doesn't Add Up
In Piecing Together the Jobs-Picture Puzzle, Jon Hilsenrath at The Wall Street Journal wonders "How can an economy that is growing so slowly produce such big declines in unemployment?"
Something about the U.S. economy isn't adding up.Trimtabs thinks the problem lies in the heavily massaged BLS employment data and the highly suspect BEA personal income data.
At 8.3%, the unemployment rate has fallen 0.7 percentage point from a year earlier and is down 1.7 percentage points from a peak of 10% in October 2009. Many other measures of the job market are improving. Companies have expanded payrolls by more than 200,000 a month for the past three months, according to Labor Department data. And the number of people filing claims for government unemployment benefits has fallen.
Yet the economy is barely growing. Many economists in the past few weeks have again reduced their estimates of growth. The economy by many estimates is on track to grow at an annual rate of less than 2% in the first three months of 2012. The economy expanded just 1.7% last year. And since the final months of 2009, when unemployment peaked, the economy has expanded at a pretty paltry 2.5% annual rate.
How can an economy that is growing so slowly produce such big declines in unemployment?
That said, withholding tax data is also messy and not a perfect measure either, but no matter what I do with the data, I can't get to 200,000+ jobs unless a huge percentage of the workforce is suddenly working for McDonalds
Best,
Madeline Schnapp
Director, Macroeconomic Research
TrimTabs Investment Research
U.S. unemployment, as measured by Gallup without seasonal adjustment, increased to 9.1% in February from 8.6% in January and 8.5% in December.So, is the BLS carefully massaging the data, or are their seasonal adjustments simply that far out of line with reality, tax collections, and common sense?
The 0.5-percentage-point increase in February compared with January is the largest such month-to-month change Gallup has recorded in its not-seasonally adjusted measure since December 2010, when the rate rose 0.8 points to 9.6% from 8.8% in November.
California politicians seem delusional in their continued delusion that high taxes have not savaged the State’s economy. Each month’s disappointment is written off as due to some one-time event.Taxed to Death
The more likely reason tax collections continue falling is that businesses and successful people are leaving California for the better tax rates available in more pro-business states.
Derisively referred to as “Taxifornia” by the independent Pacific Research Institute, California wins the booby prize for the highest personal income taxes in the nation and higher sales tax rates than all but four other states. Though Californians benefit from Proposition 13 restrictions on how much their property tax can increase in one year, the state still has the worst state tax burden in the U.S.
Spectrum Locations Consultants recorded 254 California companies moved some or all of their work and jobs out of state in 2011, 26% more than in 2010 and five times as many as in 2009. According SLC President, Joe Vranich: the “top ten reasons companies are leaving California: 1) Poor rankings in surveys 2) More adversarial toward business 3) Uncontrollable public spending 4) Unfriendly business climate 5) Provable savings elsewhere 6) Most expensive business locations 7) Unfriendly legal environment for business 8) Worst regulatory burden 9) Severe tax treatment 10) Unprecedented energy costs.
Vranich considers California the worst state in the nation to locate a business and Los Angeles is considered the worst city to start a business. Leaving Los Angeles for another surrounding county can save businesses 20% of costs. Leaving the state for Texas can save up to 40% of costs. This probably explains why California lost 120,000 jobs last year and Texas gained 130,000 jobs.
California Governor Jerry Brown’s answer to the State’s failing economy and crumbling tax revenue is to place a $6 billion tax increase initiative on the ballot to support K-12 public schools. He promises to only “temporarily” raise personal income rates by 25% on any of the rich folk who haven’t already left.
When the state of California goes bankrupt, will it revert to territorial status and lose its Representatives, Senators, and electoral votes?
NY tooo...
The smart ones (conservatives) will be the first to leave as they’ll see the writing on the wall. The moochers already have a gravy train and won’t leave until the state collapses and the spigot runs dry.
It would be interesting to see what the 2020 census turns up and how many electoral votes leave the state.
Hey, look on the bright side. The illegals might “self-deport” now that Mexico’s economy is on the upswing. Heck, maybe some Californians might join them.
The insane asylum at Sacto is run by the Dems controlled by the puppet strings of their Union overloads. Its no wonder why productive businesses, citizens and sane people are going 'Galt' on Kookifornicate.
You know Lion its simply incredible the evidence and history of govt increases of excessive taxation on the productive citizens indirectly results in fewer total tax revenues generated.
Yet these mad dog lieberals like O’Malley continue to do it ad nauseum while ignoring the factual history of its results. Yes Michael Savage....”Liberalism IS a Mental Disorder”.... and let me add....{by willfull and stubborn ideological choice}.
“Maryland is beginning to feel the effects of this phenomenon as many people are sick and tired on the rapidly increasing tax burden Democrats. Needless to say, Democrats have a stranglehold on the state legislature.”
And a result is, that as more and more of the productive people leave, those who are left behind will turn the state “bluer and bluer” until there is isn’t a chance that the state’s political leanings, along with its problems, will ever be “righted” again....
The country is “dividing”.
For the second time in history...
“Immigrants” from south of the border are moving in as fast as residents leave. More people come in from other states that aren’t as welfare friendly as California is. They come in to feed at the trough.
I didn’t “Californicate” the other states I lived in. Not all of us do that. That’s a stereotype that I see in FR frequently. We have cities and even entire counties, some bigger than eastern states, that are conservative. The problem is the huge metro-urban centers of LA and SF. Especially LA.
The southern counties wanted to split off and form a 51st state called “South California”. It would have included all the southern counties EXCEPT LA county.
The Dems have had almost complete control of MD since the 70’s. If it wasn’t next to DC and supported by all the Fed money (gov worker salaries, contracts, etc), MD would be a wasteland.
The country is “dividing” for the second time in history...
“0’Malley...has come up with another great plan to make up for that lost revenue”
I wouldn’t put it past him to levy an exit tax on people and businesses leaving the state. Those who choose to remain in the state can drown their sorrows in alcohol — if they can afford the recent 50% increase in the liquor tax. Yet another assault on the Maryland taxpayer by O’Malley.
Well it looks like CA got some of its revenue back as people are drinking and smoking more now this February. Gee wonder why that might be?
sfl
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