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If You Live In California Things Just Got A Whole Lot Worse
The Economic Collapse Blog ^
| Michael Snyder
Posted on 05/20/2012 7:02:44 AM PDT by SeekAndFind
Why does the state of California seem to be so incredibly hopeless? These days California can't seem to do anything right, and if you live in California things just got a whole lot worse. Governor Brown has announced that the state budget deficit for this year is going to be much larger than projected, that more government services are going to be cut and that voters are going to vote on another round of tax increases in November. Meanwhile, unemployment is sitting at 11 percent and extended federal unemployment benefits for workers in the state are ending. Because California is one of the worst places in the nation to conduct business, there has been a steady flow of companies leaving the state. Those companies have taken a whole lot of good jobs with them. Due to the lack of jobs and a steady stream of impoverished immigrants coming in from Mexico and other countries, poverty in the state has exploded and crime is rapidly increasing. California may be the land of "endless sunshine", but for the California economy there are only dark clouds on the horizon. The state is coming apart at the seams and there is not much hope that things are going to turn around any time soon.
These days, California is very similar to Greece in many ways.
Just like Greece, California has had round after round of "austerity" and yet still cannot seem to balance the budget.
Even after all of the cuts that have been implemented in recent years, the California budget deficit is still going to be far larger than originally projected this year. The following is from the Los Angeles Times....
Gov. Jerry Brown announced on Saturday that the state's deficit has ballooned to $16 billion, a huge increase over his $9.2-billion estimate in January.
The bigger deficit is a significant setback for California, which has struggled to turn the page on a devastating budget crisis. Brown, who announced the deficit on YouTube, is expected to outline his full budget proposal on Monday in Sacramento.
"This means we will have to go much further, and make cuts far greater, than I asked for at the beginning of the year," Brown said in the video.
During his remarks on YouTube, Governor Brown stated that California is "still recovering from the worst recession since the 1930s" and he stressed that hard choices are ahead.
But the California state government has already cut back in so many places. For example, back in the late 1970s the state of California was number one in per-pupil spending on education, but now California has fallen to 48th place.
Unfortunately, Governor Brown does not believe that budget cuts alone will solve the problem.
So you know what that means.
The tax increases that California voters will be voting on in November were outlined in a recent Bloomberg article....
Brown this week submitted more than 1.5 million signatures to place the tax measure on the ballot. It would temporarily raise the state sales tax, already the highest in the U.S., to 7.5 percent from 7.25 percent. It would also boost rates on income starting at $250,000. The 10.3 percent levy on those making $1 million or more would rise to 13.3 percent, the most of any state.
Get ready to fire up the moving vans.
The rest of the California economy may be falling apart, but moving companies will continue to do very well.
As I have written about previously, California has already experienced a net loss of approximately four million residents to other states over the past 20 years.
If the top rate on those making a million dollars or more a year hits 13.3 percent you will see a lot more wealthy people leave.
And thousands of businesses have left California in recent years as well. Sadly, one survey found that CEOs ranked California as the worst place in the United States to do business for seven years in a row.
You would think that the state legislature would get the message.
Unfortunately they have not.
California absolutely suffocates businesses with rules and regulations and it gets worse with each passing year.
So lots of good jobs continue to leave the state.
As mentioned earlier, the official rate of unemployment in California is sitting at 11 percent. That is almost 3 points higher than for the nation as a whole.
Of course the "official" numbers greatly understate the true scope of the unemployment problem, but for more on that you can check out this article.
However you want to look at it, the reality is that California has a massive unemployment problem.
Sadly, a whole bunch of unemployed workers in California are about to lose their unemployment benefits.
On Saturday, more than 200,000 unemployed Americans were dumped off the unemployment rolls. Close to half of them live in California.
Instead of 99 weeks, unemployed workers in California will now only be able to collect unemployment benefits for a maximum of 79 weeks.
It is estimated that a total of 93,000 people in California have suddenly lost their benefits as a result of this change.
Unfortunately, the truth is that the employment picture in California is not really getting any better. It is still incredibly difficult to find a decent job.
Unless you are "connected", it can be a horribly frustrating experience trying to find a new job in this economic environment.
But if you are truly desperate, there are some folks out there who are always hiring.
These days, "national security" is quite a growth industry. For example, if you are currently unemployed you can always apply to work as an Internment/Resettlement Specialist for the national guard.
While the economy is going to pot, you can get paid to lock up other Americans that are protesting about the state of our country.
Doesn't that sound fun?
But seriously, if you live in California right now you probably don't need anyone else to tell you how bad things are.
You probably already know that the number of children living in poverty in the state of California has increased by 30 percent since 2007.
California is rapidly changing, and not for the better.
But it is not just the economy that is falling apart in California. The truth is that there are a whole host of good reasons to move away from California. The traffic is nightmarish, crime is on the rise, the gangs are bigger and more active than ever before, millions of illegal immigrants have poured into the state, and the control freak politicians become more insane with each passing year.
Plus there is the constant threat that your home will be destroyed by a mudslide, a wildfire or an earthquake.
One of these days the "big one" will hit California.
You do not want to be there when that happens.
But if you decide that you do want to move from California, what is the best state to move to?
That is a very good question.
The truth is that economic conditions are horrible in most of the country and are rapidly getting a whole lot worse.
According to one poll, 30 percent of all Americans described the condition of the economy as "good" back in February but only 20 percent do now.
When we enter the next major economic downturn, unemployment is going to go higher everywhere in the nation.
There will be small pockets where jobs are still plentiful (where the oil industry is strong for example) but almost everywhere else will be really hurting.
So what do all of you think?
For people looking to move away from California, where should they go?
Please feel free to post a comment with your thoughts below....
TOPICS: Business/Economy; Society
KEYWORDS: california; debt; deficit; governormoonbeam; jerrybrown; taxes
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What I see is that the State is simply forcing much of the business underground.
I agree with you. I see it on a daily basis here , in what is left of the construction business in California. It is just a shell of people holding on with their fingertips and trying to crawl forward. By any means necessary.
posted on 05/20/2012 8:55:28 AM PDT
(I don't want a piece of someone else's pie)
To: SeekAndFind; SmithL; fieldmarshaldj; AuH2ORepublican; Impy; GOPsterinMA; randita; Sun; ...
posted on 05/20/2012 9:25:51 AM PDT
(Obama and Company lied, the American economy died)
California needs to ask the other 56 states to help.....a penny sales tax for a year on all Facebook postings should do the trick..../ S
posted on 05/20/2012 9:50:23 AM PDT
(America is squandering its wealth on riotous living, war, and welfare.)
posted on 05/20/2012 10:06:51 AM PDT
No, the saying is “If you feed them they will breed them.”
Screw California, let them stew in the mess they made of their state, NO BAILOUTS!! It can’t get any worse for me personally. My former rock-ribbed conservative brother-in-law has now told me he’s a socialist!! I’m in shock, this is no joke! He lives in Penn. and recently got a job with the PA Dept. of Transportation. Figures. Government job, government mind-set. Christ Almighty!
posted on 05/20/2012 11:36:40 AM PDT
(Political correctness is cultural Marxism. I'm not a Marxist.)
All this plus our own version of Cap and Trade about to kick in.
Which will kill off any remaining jobs in the pockets the author speaks of. The oil industry is calculating, conservatively, that buying carbon credits will cost $10 - $12 a barrel.
State utilities are in a mad dash, buying up politicians, for Cap & Trade exemptions.
Someday California will be used as an example of what happens when liberals are allowed to run the whole show themselves.It is gone and this latest tax hikes just about ought to do in what decent jobs outside of government are left.I know hubby’s corp owns several factories in California and recently built a new facility in Colorado with the rumor begin that the ones in California will be closed and manufacturing moved to the new factory.
Oh, and I love the irrelevant stat 48th in per pupil spending. California schools have been flooded with the anchor babies of illegals.
51% of ALL California school children are hispanic. 45% of all Californians don’t speak English at home, or 17 million people. This compares to 15% for the other 49 states.
Even so, we spend half of every dollar in the general fund on education. If we hadn’t been flooded with the kids of illegal aliens, CA schools would be rolling in dough.
I wonder how long it will take President Whoever He Might Be to endorse a so-called “federal bail-out” for California.
Hmmmm....now why could California be in a bind...hmmm...
A partial list of California state agencies:
California Academic Performance Index (API) * California Access for Infants and Mothers * California Acupuncture Board * California Administrative Office of the Courts * California Adoptions Branch * California African American Museum * California Agricultural Export Program * California Agricultural Labor Relations Board * California Agricultural Statistics Service * California Air Resources Board (CARB) * California Allocation Board * California Alternative Energy and Advanced Transportation Financing Authority * California Animal Health and Food Safety Services * California Anti-Terrorism Information Center * California Apprenticeship Council * California Arbitration Certification Program * California Architects Board * California Area VI Developmental Disabilities Board * California Arts Council * California Asian Pacific Islander Legislative Caucus * California Assembly Democratic Caucus * California Assembly Republican Caucus * California Athletic Commission * California Attorney General * California Bay Conservation and Development Commission * California Bay-Delta Authority * California Bay-Delta Office * California Biodiversity Council * California Board for Geologists and Geophysicists * California Board for Professional Engineers and Land Surveyors * California Board of Accountancy * California Board of Barbering and Cosmetology * California Board of Behavioral Sciences * California Board of Chiropractic Examiners * California Board of Equalization (BOE) * California Board of Forestry and Fire Protection * California Board of Guide Dogs for the Blind * California Board of Occupational Therapy * California Board of Optometry * California Board of Pharmacy * California Board of Podiatric Medicine * California Board of Prison Terms * California Board of Psychology * California Board of Registered Nursing * California Board of Trustees * California Board of Vocational Nursing and Psychiatric Technicians * California Braille and Talking Book Library * California Building Standards Commission * California Bureau for Private Postsecondary and Vocational Education * California Bureau of Automotive Repair * California Bureau of Electronic and Appliance Repair * California Bureau of Home Furnishings and Thermal Insulation * California Bureau of Naturopathic Medicine * California Bureau of Security and Investigative Services * California Bureau of State Audits * California Business Agency * California Business Investment Services (CalBIS) * California Business Permit Information (CalGOLD) * California Business Portal * California Business, Transportation and Housing Agency * California Cal Grants * California CalJOBS * California Cal-Learn Program * California CalVet Home Loan Program * California Career Resource Network * California Cemetery and Funeral Bureau * California Center for Analytical Chemistry * California Center for Distributed Learning * California Center for Teaching Careers (Teach California) * California Chancellors Office * California Charter Schools * California Children and Families Commission * California Children and Family Services Division * California Citizens Compensation Commission * California Civil Rights Bureau * California Coastal Commission * California Coastal Conservancy * California Code of Regulations * California Collaborative Projects with UC Davis * California Commission for Jobs and Economic Growth * California Commission on Aging * California Commission on Health and Safety and Workers Compensation * California Commission on Judicial Performance * California Commission on State Mandates * California Commission on Status of Women * California Commission on Teacher Credentialing * California Commission on the Status of Women * California Committee on Dental Auxiliaries * California Community Colleges Chancellors Office, Junior Colleges * California Community Colleges Chancellors Office * California Complaint Mediation Program * California Conservation Corps * California Constitution Revision Commission * California Consumer Hotline * California Consumer Information Center * California Consumer Information * California Consumer Services Division * California Consumers and Families Agency * California Contractors State License Board * California Corrections Standards Authority * California Council for the Humanities * California Council on Criminal Justice * California Council on Developmental Disabilities * California Court Reporters Board * California Courts of Appeal * California Crime and Violence Prevention Center * California Criminal Justice Statistics Center * California Criminalist Institute Forensic Library * California CSGnet Network Management * California Cultural and Historical Endowment * California Cultural Resources Division * California Curriculum and Instructional Leadership Branch * California Data Exchange Center * California Data Management Division * California Debt and Investment Advisory Commission * California Delta Protection Commission * California Democratic Caucus * California Demographic Research Unit * California Dental Auxiliaries * California Department of Aging * California Department of Alcohol and Drug Programs * California Department of Alcoholic Beverage Control Appeals Board * California Department of Alcoholic Beverage Control * California Department of Boating and Waterways (Cal Boating) * California Department of Child Support Services (CDCSS) * California Department of Community Services and Development * California Department of Conservation * California Department of Consumer Affairs * California Department of Corporations * California Department of Corrections and Rehabilitation * California Department of Developmental Services * California Department of Education * California Department of Fair Employment and Housing * California Department of Finance * California Department of Financial Institutions * California Department of Fish and Game * California Department of Food and Agriculture * California Department of Forestry and Fire Protection (CDF) * California Department of General Services * California Department of General Services, Office of State Publishing * California Department of Health Care Services * California Department of Housing and Community Development * California Department of Industrial Relations (DIR) * California Department of Insurance * California Department of Justice Firearms Division * California Department of Justice Opinion Unit * California Department of Justice, Consumer Information, Public Inquiry Unit * California Department of Justice * California Department of Managed Health Care * California Department of Mental Health * California Department of Motor Vehicles (DMV) * California Department of Personnel Administration * California Department of Pesticide Regulation * California Department of Public Health * California Department of Real Estate * California Department of Rehabilitation * California Department of Social Services Adoptions Branch * California Department of Social Services * California Department of Technology Services Training Center (DTSTC) * California Department of Technology Services (DTS) * California Department of Toxic Substances Control * California Department of Transportation (Caltrans) * California Department of Veterans Affairs (CalVets) * California Department of Water Resources * California Departmento de Vehiculos Motorizados * California Digital Library * California Disabled Veteran Business Enterprise Certification Program * California Division of Apprenticeship Standards * California Division of Codes and Standards * California Division of Communicable Disease Control * California Division of Engineering * California Division of Environmental and Occupational Disease Control * California Division of Gambling Control * California Division of Housing Policy Development * California Division of Labor Standards Enforcement * California Division of Labor Statistics and Research * California Division of Land and Right of Way * California Division of Land Resource Protection * California Division of Law Enforcement General Library * California Division of Measurement Standards * California Division of Mines and Geology * California Division of Occupational Safety and Health (Cal/OSHA) * California Division of Oil, Gas and Geothermal Resources * California Division of Planning and Local Assistance * California Division of Recycling * California Division of Safety of Dams * California Division of the State Architect * California Division of Tourism * California Division of Workers Compensation Medical Unit * California Division of Workers Compensation * California Economic Assistance, Business and Community Resources * California Economic Strategy Panel * California Education and Training Agency * California Education Audit Appeals Panel * California Educational Facilities Authority * California Elections Division * California Electricity Oversight Board * California Emergency Management Agency * California Emergency Medical Services Authority * California Employment Development Department (EDD) * California Employment Information State Jobs * California Employment Training Panel * California Energy Commission * California Environment and Natural Resources Agency * California Environmental Protection Agency (Cal/EPA) * California Environmental Resources Evaluation System (CERES) * California Executive Office * California Export Laboratory Services * California Exposition and State Fair (Cal Expo) * California Fair Political Practices Commission * California Fairs and Expositions Division * California Film Commission * California Fire and Resource Assessment Program * California Firearms Division * California Fiscal Services * California Fish and Game Commission * California Fisheries Program Branch * California Floodplain Management * California Foster Youth Help * California Franchise Tax Board (FTB) * California Fraud Division * California Gambling Control Commission * California Geographic Information Systems Council (GIS) * California Geological Survey * California Government Claims and Victim Compensation Board * California Governors Committee for Employment of Disabled Persons * California Governors Mentoring Partnership * California Governors Office of Emergency Services * California Governors Office of Homeland Security * California Governors Office of Planning and Research * California Governors Office * California Grant and Enterprise Zone Programs HCD Loan * California Health and Human Services Agency * California Health and Safety Agency * California Healthy Families Program * California Hearing Aid Dispensers Bureau * California High-Speed Rail Authority * California Highway Patrol (CHP) * California History and Culture Agency * California Horse Racing Board * California Housing Finance Agency * California Indoor Air Quality Program * California Industrial Development Financing Advisory Commission * California Industrial Welfare Commission * California InFoPeople * California Information Center for the Environment * California Infrastructure and Economic Development Bank (I-Bank) * California Inspection Services * California Institute for County Government * California Institute for Education Reform * California Integrated Waste Management Board * California Interagency Ecological Program * California Job Service * California Junta Estatal de Personal * California Labor and Employment Agency * California Labor and Workforce Development Agency * California Labor Market Information Division * California Land Use Planning Information Network (LUPIN) * California Lands Commission * California Landscape Architects Technical Committee * California Latino Legislative Caucus * California Law Enforcement Branch * California Law Enforcement General Library * California Law Revision Commission * California Legislative Analyst’s Office * California Legislative Black Caucus * California Legislative Counsel * California Legislative Division * California Legislative Information * California Legislative Lesbian, Gay, Bisexual, and Transgender (LGBT) Caucus * California Legislature Internet Caucus * California Library Development Services * California License and Revenue Branch * California Major Risk Medical Insurance Program * California Managed Risk Medical Insurance Board * California Maritime Academy * California Marketing Services * California Measurement Standards * California Medical Assistance Commission * California Medical Care Services * California Military Department * California Mining and Geology Board * California Museum for History, Women, and the Arts * California Museum Resource Center * California National Guard * California Native American Heritage Commission * California Natural Community Conservation Planning Program * California New Motor Vehicle Board * California Nursing Home Administrator Program * California Occupational Safety and Health Appeals Board * California Occupational Safety and Health Standards Board * California Ocean Resources Management Program * California Office of Administrative Hearings * California Office of Administrative Law * California Office of AIDS * California Office of Binational Border Health * California Office of Child Abuse Prevention * California Office of Deaf Access * California Office of Emergency Services (OES) * California Office of Environmental Health Hazard Assessment * California Office of Fiscal Services * California Office of Fleet Administration * California Office of Health Insurance Portability and Accountability Act (HIPAA) Implementation (CalOHI) * California Office of Historic Preservation * California Office of Homeland Security * California Office of Human Resources * California Office of Legal Services * California Office of Legislation * California Office of Lieutenant Governor * California Office of Military and Aerospace Support * California Office of Mine Reclamation * California Office of Natural Resource Education * California Office of Privacy Protection * California Office of Public School Construction * California Office of Real Estate Appraisers * California Office of Risk and Insurance Management * California Office of Services to the Blind * California Office of Spill Prevention and Response * California Office of State Publishing (OSP) * California Office of Statewide Health Planning and Development * California Office of Systems Integration * California Office of the Inspector General * California Office of the Ombudsman * California Office of the Patient Advocate * California Office of the President * California Office of the Secretary for Education * California Office of the State Fire Marshal * California Office of the State Public Defender * California Office of Traffic Safety * California Office of Vital Records * California Online Directory * California Operations Control Office * California Opinion Unit * California Outreach and Technical Assistance Network (OTAN) * California Park and Recreation Commission * California Peace Officer Standards and Training (POST) * California Performance Review (CPR) * California Permit Information for Business (CalGOLD) * California Physical Therapy Board * California Physician Assistant Committee * California Plant Health and Pest Prevention Services * California Policy and Evaluation Division * California Political Reform Division * California Pollution Control Financing Authority * California Polytechnic State University, San Luis Obispo * California Postsecondary Education Commission * California Prevention Services * California Primary Care and Family Health * California Prison Industry Authority * California Procurement Division * California Public Employees Retirement System (CalPERS) * California Public Employment Relations Board (PERB) * California Public Utilities Commission (PUC) * California Real Estate Services Division * California Refugee Programs Branch * California Regional Water Quality Control Boards * California Registered Veterinary Technician Committee * California Registrar of Charitable Trusts * California Republican Caucus * California Research and Development Division * California Research Bureau * California Resources Agency * California Respiratory Care Board * California Rivers Assessment * California Rural Health Policy Council * California Safe Schools * California San Francisco Bay Conservation and Development Commission * California San Gabriel and Lower Los Angeles Rivers and Mountains Conservancy * California San Joaquin River Conservancy * California School to Career * California Science Center * California Scripps Institution of Oceanography * California Secretary of State Business Portal * California Secretary of State * California Seismic Safety Commission * California Self Insurance Plans (SIP) * California Senate Office of Research * California Small Business and Disabled Veteran Business Enterprise Certification Program * California Small Business Development Center Program * California Smart Growth Caucus * California Smog Check Information Center * California Spatial Information Library * California Special Education Division * California Speech-Language Pathology and Audiology Board * California Standardized Testing and Reporting (STAR) * California Standards and Assessment Division * California State Administrative Manual (SAM) * California State Allocation Board * California State and Consumer Services Agency * California State Architect * California State Archives * California State Assembly * California State Association of Counties (CSAC) * California State Board of Education * California State Board of Food and Agriculture *California Office of the Chief Information Officer (OCIO) * California State Children’s Trust Fund * California State Compensation Insurance Fund * California State Contracts Register Program * California State Contracts Register * California State Controller * California State Council on Developmental Disabilities (SCDD) * California State Disability Insurance (SDI) * California State Fair (Cal Expo) * California State Jobs Employment Information * California State Lands Commission * California State Legislative Portal * California State Legislature * California State Library Catalog * California State Library Services Bureau * California State Library * California State Lottery * California State Mediation and Conciliation Service * California State Mining and Geology Board * California State Park and Recreation Commission * California State Parks * California State Personnel Board * California State Polytechnic University, Pomona * California State Railroad Museum * California State Science Fair * California State Senate * California State Summer School for Mathematics and Science (COSMOS) * California State Summer School for the Arts * California State Superintendent of Public Instruction * California State Teachers Retirement System (CalSTRS) * California State Treasurer * California State University Center for Distributed Learning * California State University, Bakersfield * California State University, Channel Islands * California State University, Chico * California State University, Dominguez Hills * California State University, East Bay * California State University, Fresno * California State University, Fullerton * California State University, Long Beach * California State University, Los Angeles * California State University, Monterey Bay * California State University, Northridge * California State University, Sacramento * California State University, San Bernardino * California State University, San Marcos * California State University, Stanislaus * California State University (CSU) * California State Water Project Analysis Office * California State Water Project * California State Water Resources Control Board * California Structural Pest Control Board * California Student Aid Commission * California Superintendent of Public Instruction * California Superior Courts * California Tahoe Conservancy * California Task Force on Culturally and Linguistically Competent Physicians and Dentists * California Tax Information Center * California Technology and Administration Branch Finance * California Telecommunications Division * California Telephone Medical Advice Services (TAMS) * California Transportation Commission * California Travel and Transportation Agency * California Unclaimed Property Program * California Unemployment Insurance Appeals Board * California Unemployment Insurance Program * California Uniform Construction Cost Accounting Commission * California Veterans Board * California Veterans Memorial * California Veterinary Medical Board and Registered Veterinary Technician Examining Committee * California Veterinary Medical Board * California Victim Compensation and Government Claims Board * California Volunteers * California Voter Registration * California Water Commission * California Water Environment Association (COWPEA) * California Water Resources Control Board * California Welfare to Work Division * California Wetlands Information System * California Wildlife and Habitat Data Analysis Branch * California Wildlife Conservation Board * California Wildlife Programs Branch * California Work Opportunity and Responsibility to Kids (CalWORKs) * California Workers Compensation Appeals Board * California Workforce and Labor Development Agency * California Workforce Investment Board * California Youth Authority (CYA) * Central Valley Flood Protection Board * Center for California Studies * Colorado River Board of California * Counting California * Dental Board of California * Health Insurance Plan of California (PacAdvantage) * Humboldt State University * Jobs with the State of California * Judicial Council of California * Learn California * Library of California * Lieutenant Governors Commission for One California * Little Hoover Commission (on California State Government Organization and Economy) * Medical Board of California * Medi-Cal * Osteopathic Medical Board of California * Physical Therapy Board of California * Regents of the University of California * San Diego State University * San Francisco State University * San Jose State University * Santa Monica Mountains Conservancy * State Bar of California * Supreme Court of California * Teach California * University of California * University of California, Berkeley * University of California, Davis * University of California, Hastings College of the Law * University of California, Irvine * University of California, Los Angeles * University of California, Merced * University of California, Riverside * University of California, San Diego * University of California, San Francisco * University of California, Santa Barbara * University of California, Santa Cruz * Veterans Home of California
posted on 05/20/2012 7:47:07 PM PDT
(Romney Republicanism: Leave your principles by the door. You won't be needing them any more.)
State utilities are in a mad dash, buying up politicians, for Cap & Trade exemptions.
posted on 05/20/2012 9:13:02 PM PDT
“California was number one in per-pupil spending on education, but now California has fallen to 48th place”
I seriously doubt this. I wonder if other states play the same game that CA does by reporting only the current-year tax funding spent on schools as per=pupil spending. CA does not include the money spent from bond issues ! In 2010, the LAUSD reported they spent only $10K per student when they actually spent $30K per student — the other $20K per pupil was from school district bonds and “didn’t count” because it didn’t come from “Taxes”. Of course, this means that this money must be paid back from general taxes and will NEVER be counted as school spending.
posted on 05/21/2012 1:40:10 AM PDT
(The ultimate result of shielding men from the effects of folly is to fill the world with fools.)
“It would temporarily raise the state sales tax, already the highest in the U.S., to 7.5 percent from 7.25 percent. It would also boost rates on income starting at $250,000. The 10.3 percent levy on those making $1 million or more would rise to 13.3 percent, the most of any state.”
This is insane. You can figure just how much tax rates would actually NEED to be if they applied to a broader base by simply looking at the income stats for CA. The total personal income for CA is $1.7T for 2011. Suppose we eliminated all taxes except personal income tax and sales tax — and applied it to all income and all retail purchases. No more gas tax, tobacco tax, liquor tax, etc. CA would need $100B in revenue from these two taxes to balance its budget even without any cuts anywhere. A 3% flat personal income tax would collect $45B assuming some evasion. And how good for business would it be to have NO Corporate Income tax, but only a 3% Personal Income Tax ? If the sales tax were 4% and applied to all goods and services, it would collect $60B assuming people saved 10% of their income rather than spending every dime. Total revenue $105B and NOBODY pays punishing tax rates, nobody pays a CA gas tax, or sin taxes. If the Counties and cities keep their same sales tax rates, but follow the state’s lead and apply it to all goods and services instead of just retail finished goods as currently done, the County tax revenues would almost double.
Instead, Jerry wants to raise the State sales tax rate to 7.5% while still applying it to only 30% of purchases. Jerry also wants higher income tax rates on modestly successful people, while continuing a zero tax rate on less successful people. He could not design a plan more likely to attract losers and drive away winners if he tried.
Creating a pro-growth tax system replacement for CA is simple. The much harder problems are the over-regulation (every regulation on the books was some pol’s baby) and the public employee unions.
The unions can be dissolved by attrition and outsourcing to non-union private contractors. If you cannot get rid of union thugs, then you can at least reduce their workload so they never need a single additional employee. 7% of them retire every year, so you should be able to clear them all out in 15 years. Private security instead of police. Private prisons with no union correctional officers. Vouchers for private schools rather than public schools.
I’d bet private companies would house prisoners for $25K/yr instead of the $50K the state is spending.
I’d bet new private schools would spring up eager to teach our kids for $5K/yr (that is still $125K per 25 pupil classroom) instead of the $10K the state claims they spend much less the $30K they actually spend when including the school bond revenues.
The cost of the public pensions can be addressed, as well as discouraging new public employees, by placing a 90% surtax on public employee retirement benefits disbursements that exceed 3x the Federal minimum wage (that would mean 90% tax rate on benefits over $45K/yr). This sidesteps the contractual requirements of the pension amounts being paid. The pensions will still be paid, but subject to a special income tax rate on this class of income, just as municipal bonds are a special class of income with a 0% tax rate.
posted on 05/21/2012 2:22:08 AM PDT
(The ultimate result of shielding men from the effects of folly is to fill the world with fools.)
RE: Welcome to the Hotel California
Conservatives try to stab the libs with their steely knives but they just can’t kill the beast. :)
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