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To sum up why California has yet another deficit — this time a $16 billion whopper — is pretty easy: The number of demonized one-percenters who pay over 10 percent in their salary to the state has been shrinking, as thousands flee with their ideas, energy, business, and capital to nearby no-tax states, and others make less money due to more and more costs and regulations — while the number of those receiving all sorts of state housing, food, medical, education, and legal support is soaring. (In crude parlance, California increasingly is seen by some as a very bad deal, in terms of the sort of schools, safety, transportation, and housing per taxes paid in comparison to Reno, Tahoe, or Austin, but by far more people as a very good deal in comparison to the costs versus benefits in, for example, Oaxaca or El Salvador.)
But California being California, such reductionist thinking is taboo, and we are not allowed to make any suggestion that there is a connection between fleeingentrepreneurs, massive and illegal influxes of undocumented foreign nationals in recent years, and record public salaries and unfunded pensions.
So that said, are there any out-of-the-box things California might do to save or make a few billion dollars, other than the obvious measures of slashing spending and dismantling burdensome regulations?
“California earns the dubious honor of being ranked dead last for the eighth consecutive year.” California “appears to slip deeper into the ninth circle of business hell,” the report said. “Each year, the evidence that businesses are leaving California or avoid locating there because of the high cost of doing business due to excessive state taxes and stringent regulations, grows.”
The increasingly delusional nature of the state’s politics is best captured by the urgent political push to build a fantastically expensive—potentially costing as much as $100 billion—high-speed rail line that would eventually connect the Bay Area, Los Angeles and the largely rural places in between. Obama has aggressively promoted high-speed rail nationally, but has been pushed back by mounting Republican opposition. Yet in one-party California, Jerry Brown mindlessly pushes the project despite the state’s huge structural deficits, soaring pension obligations, and decaying general infrastructure. He’s continued doing so even as the plan loses support among the beleaguered California electorate.
It’s hard to see how these policies, coupled with a massive income tax increase on the so-called rich (families, as well as many small businesses, making over $250,000), can do anything other than widen the state’s already gaping class divide. Yet given the power of Californian ideas over Obama, one can expect more such policies from him in an electorally unencumbered second term. California’s slow-motion tragedy could end up as a national one.
California has always been a magnet — a land that has called people from across the country and the world. It’s a place that was known for its entrepreneurial spirit and open culture. But it has been turned into a regulatory and tax nightmare, a place where those who already have their money can live in their coastal palaces and enjoy the splendor of the landscapes, but where it’s unnecessarily difficult to move one’s way up the economic ladder.
“The new regime wants to destroy the essential reason why people move to California in order to protect their own lifestyles.” He says the state is run for the benefit of the very rich, the very poor, and public employees.
California remains a beautiful place, but it no longer is the destination for entrepreneurs, free-spirits, and dreamers. These are the fruits of modern-day progressive policies. This should be the cause of much sadness.
California governor Jerry Brown defending the threshold on his “millionaires tax.” Why did I leave Texas?
Brown also defended calling his proposal a “millionaires tax” on his initiative campaign website, even though the income threshold would be $250,000.
“Anybody who makes $250,000 becomes a millionaire very quickly if you save it. You just need four years,” Brown said. “It is a millionaires tax. It taxes millionaires, right?
“Adult film stars are adults, free to make their own decisions. They don’t go into that line of work without understanding the potential consequences, and that’s a risk they’re willing to take. Their decisions, their bodies, their choices. In the wake of the condom mandate, many of the Los Angeles-based studios have threatened to leave the Golden State and relocate in Arizona. So now the law is not only violating the personal freedoms of individuals, it’s also driving business out of a state that is losing business like my dryer loses socks”
“Here in California, students just marched on Sacramento in outrage that state-subsidized tuition at the UC and CSU campuses keeps climbing. It is true that per-unit tuition costs are rising, despite even greater exploitation of poorly paid part-time teachers and graduate-student TAs. But the protests are sort of surreal. The California legislature is overwhelmingly Democratic. The governor is a Democrat. The faculties and administrative classes are largely Democratic. Who then, in the students’ minds, have established these supposedly unfair budget priorities?”
“California companies are watching closely as former Indymac Bank CEO Michael Perry tests the boundaries of state law that shields corporate directors from legal liability. The questions is this: Does the so-called “business judgement rule” also protect corporate officers?
A federal district judge recently ruled that it doesn’t, in a lawsuit against Perry brought by the FDIC in July. The suit alleges that in the waning days of the housing bubble, Perry acted negligently by allowing Indymac to pool $10 billion in risky loans the company was unable to sell in the secondary market.”
“Robinson, 62, is among a group of public employees who have increased their retirement paychecks by adding such things as vacation time, educational incentives, car allowances and bonuses to their final salaries.
Such “salary spiking” was banned in 1993 by CalPERS, the state’s largest public employee retirement system, to help control spiraling costs. But 20 of California’s 58 counties — including Los Angeles, Ventura, Orange and San Diego — do not participate in CalPERS and their employees may legally continue to spike their salaries.”
“The study, titled “Location Matters,” looked at a range of business taxes — corporate income, sales, property, unemployment, gross receipts and others. The accounting firm KPMG collaborated on the report with the Tax Foundation.
Among the most-populated states, California ranked 34th, Texas 12th, New York 42nd, Florida 19th, and Illinois came in 45th. Ohio, which came in 5th, imposes a low-rate gross receipts tax instead of a corporate income tax.”
“While Americans have favorable views of most of the 50 states, five polled in negative territory, with California at the bottom. Only 27 percent of respondents (mostly women and Democrats) had anything nice to say about the left-coast leviathan, while 44 percent (including large numbers of Republicans) wanted nothing to do with it.
The PPP poll shows that Democrats like California by 91 points more than Republicans. (Dems also gave high marks to high-tax, socially liberal blue states like Hawaii, Oregon, and New York, while Republicans heavily favored Alaska and Texas.) Over the past half-century, California has turned from a free-enterprise powerhouse – the very embodiment of the American Dream — into a liberal’s fantasy of a totally regulated nanny state, with taxes among the nation’s highest and a host of regulatory agencies just itching to get their hands around the neck of private industry and squeeze.”