Heinlein tried to warn them, but California’s Politicians just ain’t a listening…

March 13, 2012 | Filed under Big government,Economics,Entitlement Culture | Posted by

Throughout history, poverty is the normal condition of man. Advances which permit this norm to be exceeded — here and there, now and then — are the work of an extremely small minority, frequently despised, often condemned, and almost always opposed by all right-thinking people. Whenever this tiny minority is kept from creating, or (as sometimes happens) is driven out of a society, the people then slip back into abject poverty.
This is known as “bad luck.”

 

The Golden State’s “bad luck” continues to manifest as “unexpected” shortfalls in tax and fee collection.  The Governor and the Democratic Legislature assumed that increasing tax rates and fees would increase state revenues, and are shocked to find that revenues are instead falling as marginal rates increase…

 

Exodus: California Tax Revenue Plunges by 22%

By Chriss W. Sweet | Breitbart’s BigGovernment

State Controller John Chaing continues to uphold the California Great Seal Motto of “Eureka”, i.e., ‘I have found it’. But what Chaing is finding as Controller is that California’s economy as measured by tax revenues is still tanking. Compared to last year, State tax collections for February shriveled by $1.2 billion or 22%. The deterioration is more than double the shocking $535 million reported decline for last month. The cumulative fiscal year decline is $6.1 billion or down 11% versus this period in 2011.

 

But but…  They raised the tax rates.  They raised the fees.  How can revenues go down?

 

While California Governor Brown promises strong economic growth is just around the corner, Chaing proves that the best way for Sacramento politicians to hurt the economy and thereby generate lower tax revenue, is to have the highest tax rates in the nation.

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.

 

Shockingly, it would seem that a significant proportion of the high earning businesses and individuals are voting with their feet and relocating to states where they can keep more of what they earn.

Bad luck, that.

Hat Tip: Krewe Maynard at Google +

 

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Posted by on March 13, 2012.
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  • GarandFan

    Current unemployment rate is 11.2%.

    Some ‘expert’ stated last week that the US can absorb $4/gal gasoline.  No worries unless the price reaches $4.50.  Guess what gas prices were this last week in Kalifornia.

    Jerry and the legislature put together the last budget several days after it was due.  Because of this, the legislature lost their pay and perks until the budget was passed.  And pass it did with the Democratic majority  (passing a budget now only requires a majority vote).  Only problem was that all the income projections were BEST CASE.  But Jerry says it was “an honest budget”.

    Just wait until the elections this fall.  Jerry and the Democrats get their way, there will be a host of new “temporary” taxes.  Jerry ran for governor, saying “everything was on the table”.  Well “everything” lasted until he was elected.  Now all we hear is raising taxes.  Nothing about cutting politician pay, perks, staff, any of the 118 “advisory” commissions, or UC bureaucrat salaries.  Just prison populations, state funds for education (to include bus transportation), CalFire, state parks.  Were such tactics used in the private sector it would be called EXTORTION.

    Oh, and Jerry wants a LEGACY.  He wants a $100 BILLION plus Bullet Train.

  • herddog505

    It would be of some interest to compare California’s revenue decline with other states.  Is CA losing money because of the sh*tty economy… er… I mean, during the Greatest Economic Recovery EV-AH?  Are they losing more than other states?  Less?

    For my own state of No. Carolina*, I find:

    Q-3, 2009      $5.0B
    Q-3, 2010      $5.4B
    Q-3, 2011      $5.5B (+1.9%)

    For California:

    Q-3, 2009     $24.2B
    Q-3, 2010     $25.1B
    Q-3, 2011     $25.0B (-0.4%)

    For Texas:

    Q-3, 2009     $9.3B
    Q-3, 2010     $9.7B
    Q-3, 2011     $10.8B (+11.3%)

    For New York:

    Q-3, 2009     $13.4B
    Q-3, 2010     $14.0B
    Q-3, 2011     $14.9B (+6.4%)

    For Florida:

    Q-3, 2009     $7.5B
    Q-3, 2010     $7.6B
    Q-3, 2011     $7.8B (+2.6%)

    So, even in a struggling economy, CA lost revenue while the other three largest states (and No. Carolina) managed to gain a bit.

    Is there something in the water out there???

    ====

    (1) http://www.indexmundi.com/facts/united-states/state-taxes/north-carolina/all-tax-types/tax-revenue#table

    All other state data also from this website.

    • http://wizbangblog.com/author/rodney-graves/ Rodney G. Graves

      We’ve become a one party state and unless that reverses soon we’ll be Detroit writ large.

      • http://profiles.yahoo.com/u/EU5DQWQTTHTPO4A4ZYSL3AAV2U Adjoran

         In Detroit, they found it more efficient to bulldoze entire city blocks rather than try to sell the property which had been taken for unpaid taxes.

        California is in the process (with the assistance of the US government) of turning some of the world’s most bountiful agricultural areas into deserts to save some one inch fish you can’t eat or use for bait.  Thereby saving the cost of the bulldozers . . .

        • http://www.wizbangblog.com David Robertson

          Uh, about those agricultural areas turning into deserts … I could be mistaken, but weren’t they deserts originally until man-made water systems brought water to those places?

          • http://www.rustedsky.net JLawson

            True. 

            Through mankind’s ingenuity, we made the deserts bloom.

            Through the left’s perversity, we’ve turned them back into deserts.

          • http://wizbangblog.com/author/rodney-graves/ Rodney G. Graves

             Semi-Arid, not desert.  California’s San Juaquine Valley prior to irrigation was grassland.

          • LiberalNitemare

             When you put it that way it kind of sounds like a waste of the peoples resources.

            I wonder whose idea it was to turn off the water?

          • http://wizbangblog.com/author/rodney-graves/ Rodney G. Graves

             The Usual Suspects.

    • herddog505

      Additional data:
       
      State – tax burden as % of state income (rank) / state “freedom” ranking / %change in tax revenue, Q3 2010 – Q3 2011 (as above)
       
      NC – 9.8% (16th) / 18th / +1.9%
       
      CA – 10.6% (6th) / 48th / -0.4%
       
      TX – 7.9% (45th) / 14th / +11.3%
       
      NY – 12.1% (2nd) / 50th / +6.4%
       
      FL – 9.2% (31st) / 11th / +2.6%
       
       
      I tried to correlate tax burden vs. “freedom” using Excel.  As expected, this is a negative correlation, i.e. increasing burden —> decreasing freedom.  However, it is by no means an iron-clad correlation (r^2 = 0.4); for example, Wisconsin has a slightly higher tax burden (11%, 4th) than CA (10.6%, 6th), but is far more “free” (25th vs. 48th); from Q3 2010 to Q3 2011, Wisconsin’s tax revenue increased by 4.6%
       
      So, while tax burden and “freedom” tell part of the story for CA’s woes, they by no means tell the whole story.  Perhaps there is something in HOW CA collects taxes (sales tax?  property tax?  income tax?).
       
       
      ====
       
      Tax data:
       
      http://taxfoundation.org/publications/show/2181.html
      TABLE 3, page 6
       
       
      “Freedom” data:
       
      http://mercatus.org/freedom-50-states-2011

  • http://twitter.com/MaggieW65 MaggieW65

    What do you expect from the land of fruit and nuts?   Wait, there will
    be a temporary tax on leaving the state before you know it!

    • http://wizbangblog.com/author/rodney-graves/ Rodney G. Graves

       Don’t go giving the bastards any ideas now…

    • http://www.wizbangblog.com David Robertson

      “…the land of fruit and nuts…”

      MaggieW65, when you say “fruits” and “nuts”, are you talking about agricultural products or about people?

    • LiberalNitemare

       How long before they erect a wall to keep Californians in?

      • herddog505

        Kind of like Cuba, North Korea, or East Berlin, eh?

  • cirby

    A whole bunch of people are learning about the Laffer Curve in real time.

  • Evil Otto

    Obviously, taxes must be raised again. That will solve the problem.

    What’s the old joke about the definition of insanity?

  • http://www.rustedsky.net JLawson

    “The beatings will continue until morale (or income) improves.”

    Obviously, the problem is with the ‘rich’.  The ungrateful sods are leaving.  They’ve had enough.  They’re tired of being accused of being exploiters of the working class on the one hand, berated on the other hand for not employing enough people, supposedly never paying their fair share, and lastly being the source of all evil in the world. (Wait – that’s 4 hands.  Half an octopus, or a piano duet…)

    So they pack up and leave, taking jobs and tax revenue with them.  Wow – what a concept… that people can actually LEAVE if conditions aren’t to their liking and they’ve got the resources to do so.  There oughta be a LAW! to prevent that…

    Seems to me like the corollary of “Fuck the rich!” that’s been so gleefully shouted by liberals who see the rich as a bottomless supply of money is – “Fuck ya’ll – we’re out of here and we’re taking the jobs, money, and tax revenue with us.  Good luck eating your ideology.”

    Congrats, CA – you’ve managed to kill the golden goose.

  • Commander_Chico

    Why are taxes in CA so high?  Maybe because it’s so big, they layer on a lot of unnecessary agencies to make them feel good.

    CA really ought to be split into two or three states.

    • Brian_The_Adequate

      Careful Chico – you are making too much sense.

      • http://2012.ak4mc.us/ McGehee

         He’s certainly right about breaking California up. It’s either that or cut it loose and let the ocean have it — though I’ll need to find my brother and his family someplace high and dry to move to first.

        • LiberalNitemare

           I say donate it to mexico.

    • herddog505

      I suggest that the problem with CA isn’t that it’s “too big”: it’s that it’s been too rich for so long.  The people and politicians got used to the idea that there was just so much money in the state that they could afford virtually anything their hearts desired.  It’s very easy to be generous – and careless – with money when you’ve got more of it than you really know what to do with.

      Unfortunately, the goose can only lay so many eggs, and CA has finally reached the limit.  Breaking the state into bits isn’t going to solve that problem.

      Incidentally, is this your solution for other states (including, I believe, Illinois, Rhode Island, and Michigan) that are in financial trouble?  Indeed, what about the country as a whole?  The only things saving the US from bankruptcy are the facts that we can print money at will and the dollar is – for the time being – the gold standard currency.  What shall we do when the federal goose can’t lay enough eggs?  Break up the country as being “too big”?

      • Commander_Chico

        Yikes, Disqus ate my comment, will reply later.

        (EDIT) Okay, I agree with what you said about the wealth of California leading to a spending spree. That and the size probably led to all kinds of boards and commissions and programs other states don’t have.

        States have some control over local economic conditions, but their fate is tied to the country’s because of the Commerce Clause. They can’t impose tariffs to protect local manufacturing. California being split would be good to reduce the size of state government overall- which is kind of perverse, because it should be the other way around, economies of scale being what they are.

        The country as a whole has to follow the path of empires in retrenchment – which means saving money on foreign adventures (does anyone now believe that more dollars spent or lives lost will make a difference in Afghanistan?). Make the tax code simpler but stop the folly of treating overseas operations the same or more favorably than US operations – through tax holidays for repatriation of overseas profits. Rebuild rotten US infrastructure.

        • http://www.rustedsky.net JLawson

          Hate it when that happens.

        • herddog505

          It’s happened to me many times.  Frustrating.

        • herddog505

          Size doesn’t matter!

          Sorry… couldn’t resist…

          Anyway, I suggest that the sheer size of CA, both in area and population, have far, far less to do with their financial woes than the attitudes of California’s citizens and politicians. (How bizarre is it that we are writing of California, once the veritable promised land, as a near-bankrupt, ossified, tottering state?)

          If there is some special multiplicity of boards, bureaucrats, etc. in CA, it is because the people there at least assented to it and at worst demanded it.  “Hey, we live in the land of milk and honey!  We shouldn’t have icky pollution or poor schools like  those (ahem) other states have!  We should have THE BEST!”  And it’s my understanding that, for many years, CA DID have much the best: they could afford it.  But what they didn’t reckon on was that bureaucracy doesn’t tend to stop: it constantly looks for newer, better reasons to justify its existence.  Further, the citizens – well, some of them – looked at their fellows and wanted what they had.  CA is the home of Hollywood, Beverly Hills, Rodeo Drive: those people are RICH and they should share with everybody else.  And how does one “share” with his (unwilling) neighbors?  Why, by taxing the sh*t out of them… er… making them pay their fair share, I should have said.

          Splitting up the state isn’t going to eliminate those attitudes, though it MAY concentrate them in one of the hypothetical new states. (I used to work for a Massachusetts-based company, and I got the feeling when talking to my coworkers that they would have been ecstatic to cut their state in half, leaving Boston on the other side of the new border).

          As for foreign adventure being the cause of the US’s general financial woes, I disagree.  Yes, we spent a good deal of money in the past decade in Iraq and A-stan (money thrown down the rathole in A-stan, it seems; my Sept. 2001 idea of nuking the damned place seems to have had considerable merit).  However, money spent on defense is small compared not only to what we used to spend back during the Cold War, but especially on the social “safety net” that, like CA, we’ve built up at an accelerating pace over the past few decades.  For 2008, the budget was:(1)

          DEFENSE - $626.6B (defense budget + GWOT)

          SOCIAL SECURITY – $608B

          MEDICARE – $386B

          MEDICAID / SCHIP - $209B

          UNEMPLOMENT / WELFARE – $324B

          Even if much of the costs of Iraq and A-stan were (somehow) hidden “off-budget”, we would have had to spend TWICE the amount nominally spent on defense / GWOT to equal what we spent on social spending.  Much more butter than guns.

          As to your point about the fate of the states being tied to that of the nation, there’s much truth in it.  On the other hand, the other large states (TX, NY, FL) saw their tax revenues increase while CA’s decreased.  How is it that they seem to have prospered (Texas did quite well) while CA didn’t?  CA seems to be doing something VERY wrong. (*cough*electing democrats*cough*)

          We don’t need to follow the paths of empires in retrenchment; our woes are entirely of our own making.  Rather, we need to follow the path of people coming off a spending binge that’s brought them to the brink of bankruptcy: cut up the credit cards, come up with a budget that is workable given expected income and NECESSARY expenses and allows debts to start being paid off, and in general stop binging.  We have plenty of money; we just need to stop blowing it.

          ====

          (1) http://en.wikipedia.org/wiki/2008_United_States_federal_budget

          With regard to defense vs. social spending, Heritage has this handy chart.  You will see that, in 1969 at the height of the Vietnam War, defense spending was around 9% of GDP; social spending was around 3.5%.  Today, defense spending is about 5% of GDP, while social spending is about 10%.  Foreign adventure isn’t bankrupting us: charity is bankrupting us.

          http://blog.heritage.org/2011/08/21/chart-of-the-week-defense-spending-has-declined-while-entitlement-spending-has-increased/

          • Commander_Chico

            I’m always struck by the contrast between the indignation about some domestic boondoggle (say Green Jobs) and the relaxed attitude about money spent (wasted) on The Wars.

            If I say Green Jobs “was only” $38 billion is that a defense?  What if I say the money was at least spent in the USA, where it will be used to buy goods and services from other US businesses?  What if I say it gave jobs to Americans?

            On the cost of the wars, the “budget” is only a part of the story.  Almost every year there was a supplemental appropriation -

            2008 (the budget year you cite) – supplemental for
            “$162 billion for military operations in Iraq and Afghanistan into 2009″

            http://en.wikipedia.org/wiki/Supplemental_Appropriations_Act_of_2008

            2007 – supplemental for 95 billion for Iraq and Af

            http://en.wikipedia.org/wiki/U.S._Troop_Readiness,_Veterans'_Care,_Katrina_Recovery,_and_Iraq_Accountability_Appropriations_Act,_2007

            2005 – supplemental for $82 billion for Iraq and Af

            http://www.fas.org/sgp/crs/misc/RL32783.pdf

          • jim_m

            So what you are therefore saying is that government picking winners and losers in the marketplace based solely on political connections and contributions is OK and that spending to try to liberate 50 million brown skinned people from tyranny is a waste of time and money.

            In other words you are strongly in favor of a corrupt kleptocracy mismanaging the economy and against freedom and democracy.

            Glad we got that straight.

          • Commander_Chico

            Where have brown people been liberated from tyranny?  Last I heard, they were stoning emos to death in Iraq. 

             And the chances of any thing resembling “freedom” in Afghanistan approach zero under the likes of Karzai or whatever corrupto replaces him.

          • jim_m

            So you are OK with a fascistic government control of businesses and the economy as long as we are not wasting money in foreign adventures, yet on another thread you laud Eisenhower who threatened nuclear war with Chine over Taiwan, a nation which at that point in time was not a significant economic power and there could have been no way of predicting its future economic influence.

            You find these things to all be congruent?

          • Commander_Chico

            Eisenhower knew how to use national power, and of course warned about the warmongering military industrial complex.

            Knowing who, how and when to threaten is a part of that.

            He also did not outsource his middle east policy to Israel, as shown by his response to the Suez attack.

          • herddog505

            National defense is not only an actual constitutional power of our government, it is a prime reason for the existence of ANY government.  On the other hand, “creating jobs” is neither constitutional nor a traditional government role.  At any rate, if one wants to create jobs, it seems to me that hiring shipyard, aircraft plant, or other defense industry workers is a better way to do this than making “loans” to dicey start-up companies in the hopes that they’ll make something that people actually want to buy (and whose owners and other investors just happen to be major political contributors).

            As for what we spent in Iraq and A-stan, my argument stands: one would have to DOUBLE what we budgetted for defense and the GWOT to match what we spend on social services.  Further, unlike those social services, the wars – eventually – come to an end.

            The argument about guns v. butter is a matter of personal opinion.  I take the view that, as I wrote above, a primary role of the federal government is to provide for the common defense, and I like A LOT of defense.  I don’t believe, on the other hand, that social welfare is either a constitutional, traditional, or even very smart thing for the federal government to do.  It’s bankrupting us, just as it has bankrupted Greece and is likely to bankrupt other countries in Europe that, coincidentally, spend far, far less than we do on defense.

            ===

            (*) Speaking of defense, I see that the Navy is – as expected – being starved out.

            THE PROJECTED FY13 SHIP INACTIVATION SCHEDULE FOR INACTIVATING U.S. NAVAL VESSELS IS PROMULGATED AS FOLLOWS TO FACILITATE FLEET PLANNING EFFORTS TO CONDUCT A DECOMMISSIONING CONTINUOUS MAINTENANCE AVAILABILITY (CMAV) OR INACTIVATION AVAILABILITY (INAC):SHIP NAME INACTIVATION POST DECOM STATUSUSS CROMMELIN (FFG 37) 31 OCT 2012 SEE NOTE 1USS UNDERWOOD (FFG 36) 15 FEB 2013 SEE NOTE 1USS CURTS (FFG 38) 27 FEB 2013 SEE NOTE 1USS CARR (FFG 52) 15 MAR 2013 SEE NOTE 1USS ENTERPRISE (CVN 65) 15 MAR 2013 SEE NOTE 2USS KLAKRING (FFG 42) 22 MAR 2013 SEE NOTE 1USS REUBEN JAMES (FFG 57) 30 AUG 2013 SEE NOTE 1USS COWPENS (CG 63) 31 MAR 2013 SEE NOTE 3USS ANZIO (CG 68) 31 MAR 2013 SEE NOTE 3USS VICKSBURG (CG 69) 31 MAR 2013 SEE NOTE 3USS PORT ROYAL (CG 73) 31 MAR 2013 SEE NOTE 3

            NOTE 3 – VESSEL WILL BE DECOMMISSIONED AND DISPOSED OF BY DISMANTLEMENT. REQUEST USFFC AND CPF COORDINATE REQUIREMENTS FOR UTILIZING VESSELS IN A LOGISTIC SUPPORT STATUS PRIOR TO THEIR DISMANTLEMENT WITH OPNAV N8F VIA N86.

            http://www.informationdissemination.net/2012/03/fy13-inactivation-schedule.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+InformationDissemination+%28Information+Dissemination%29
            In other words, we are not only going to decommission FOUR Ticonderoga-class cruisers this year alone, we aren’t even mothballing them: they are going to the breakers yard.  Unlike the frigates or even Big E, these ships are not that old: Cowpens was commissioned in 1991.

            I note that we are NOT building any replacements.

            It seems that the democrats learned two things from World War II and Korea:

            Jack and Sh*t.

            But maybe the dems are banking on us getting our asses kicked in a war when a Republican is in office so they can blame him for it.  Ah, who and I kidding?  They’ll blame the GOP no matter WHO is in office.

          • Commander_Chico

            I also don’t get the idea that money totally wasted and pissed away in the desert paying corrupt Afghan, Paki, and Gulf Arab contractors in an absolutely futile war (which gets Americans killed and damages the reputation of the USA) is somehow “defense” and preferable to paying medical care for grandma.

            It is now obvious that our presence in Af will soon end and the Afghans will work it out when we are gone, in their own way.  Whether they require burkas for women is not a vital national interest of the USA.

            Social security is lumped in as “social spending” by the Heritage Foundation which shills for Wall Street, but SS is paid for in regressive FICA taxes to wage earners.

            As for the Navy, of course it is being starved because of the wars, although both the Burke and Zumwalt class DDGs are more capable than Ticonderoga class CGs.  I always though “cruiser” was a bit of a stretch for a ship built on a Spruance DD class hull.

            I think two considerations are in play in the Navy: (1) cost of personnel to man ships, and (2) keeping shipyards going with new construction.
             

    • http://www.wizbangblog.com David Robertson

      Uh, no. CA shouldn’t be turned into two or three states. Doing such a thing would result in the creation of more U.S. senators.  It’s bad enough that CA has already given us Feinstein and Boxer.

      • Commander_Chico

        The Republicans could easily win in southern or eastern California.

        • http://www.rustedsky.net JLawson

          Farmers tend to understand reality, as opposed to ideology.

        • http://2012.ak4mc.us/ McGehee

           Stop making sense! For the sake of my sanity I beg you!

        • http://pulse.yahoo.com/_425GVKQCLFZMQYYENR7CJBRDVA jb

           And they’d be welcome to ‘em. The liberals areas wouldn’t have to keep bailing out the rest of the state, as the only parts of California that are making the most money – Hollywood and Silicon Valley.

          • jim_m

            Yep, that’s because the ag industry has been destroyed by the leftist state government. Free up the ag industry to actually grow crops again and you will have an economy in those areas.

          • http://pulse.yahoo.com/_425GVKQCLFZMQYYENR7CJBRDVA jb

            I am extremely skeptical that the “Leftist state government” which has a) had mostly Republican governors and b) is hogtied from increasing property taxes by a referendum passed back in the 1960′s, is responsible for destroying the Californian AG industry.

            Can you back that up with some figures?

            ‘Cause this makes much more sense as far as I can see:

            http://www.nytimes.com/2009/05/25/opinion/25krugman.html?_r=4

    • http://profiles.yahoo.com/u/YSM6XGIY2CLRQKYDB746ZVVUUI Texas Accountant

      Commandante,

      Are you sure that the creation of three “progressive” states would not result in more “layers” of government?

      • Commander_Chico

        No, I’m not sure.  I think there would be less government – of course you’d have three legislatures and three governors, etc, but you’d have less boards, commissions, authorities, offices, etc. down below.  Just a hunch. 

    • http://wizbangblog.com/author/rodney-graves/ Rodney G. Graves

      Because it’s a one party state, effectively, and all that party knows how to do is tax and spend.

  • http://2012.ak4mc.us/ McGehee

    I was growing up in California when this downward spiral began. Oddly enough, in hindsight I’d have to say the beginning was in 1975, the first time Jerry Brown assumed the gubnership.

    • http://wizbangblog.com/author/rodney-graves/ Rodney G. Graves

      That’s pretty much how I remember it as well, @McGehee:disqus .

  • Meiji Man

    A policy needs to be put in place for the dissolution of a state based on insolvency. 

    I think a state that is unable to pay it’s bills on filing of bankruptcy needs to be reverted to territorial status. The state Constitution and courts should be suspended and all executive functions replaced with federal appointees. All contracts with the state to include employment and retirement should be voided. All elected representatives are fired. All retired elected representatives will have their pensions voided. 
    Senators and Congressmen will be removed from their offices, as the State that they we’re elected to serve no longer exists. After a Period of two years, A elected body of the citizens of the new territory may reapply for statehood based on existing law.  

    • http://2012.ak4mc.us/ McGehee

      But not with the same boundaries, constitution or seat of government.

      • mikegiles

         And as much state property as possible, should be sold to satisfy the creditors, including state office buildings, the capital, parks, etc.

  • http://pulse.yahoo.com/_EJGOSD7BRBBY4ZQQEUCFQU4GHU W

    It a shame what California and their unrealistic socialist ideas are doing them in. Unfortunately when they cut and leave the mess they made behind, they start their destructive ideas all over again in other communities.

  • http://pulse.yahoo.com/_425GVKQCLFZMQYYENR7CJBRDVA jb

    Guys:

    1) you are linking California’s economic troubles solely with it’s taxes, and

    2) you are further saying that it’s taxes are causing some economic exodus of businesses.

    Meanwhile the article doesn’t present any information to support either of those suppositions.

    I’d like to point out a much more likely cause: the real estate bubble, which absolutely CRATERED California. I think there was only one other state hit as bad – Florida.

    Shall we suppose all of Florida’s economic troubles are due to their conservative governorship? Or shall we look for deeper things going on besides this simplistic “economy = taxes = businesses fleeing = liberals are bad” stuff?

    • jim_m

      The real estate bubble didn’t cause businesses to flee California.  It is the high rate of taxation that is driving out business.   That has been an ongoing story for several years now. CA state legislators actually took a trip to Texas to find out why so many businesses were relocating there and numerous businesses have cited the high taxes as the reason for their leaving.

      • http://pulse.yahoo.com/_425GVKQCLFZMQYYENR7CJBRDVA jb

        A cratered economy means people have less money, which means less demand. And less demand means less money for businesses.

        I don’t see how taxation has more of an effect on businesses than customers buying their products.

        I know it’s an easy way to blame all of California’s problems on liberals, but it just doesn’t make sense as an economic explanation.

        If you were to blame businesses leaving on the budgetary gridlock that California’s been going through, which is creating an **uncertain** environment, that would make more sense to me. But otherwise, businesses stay where they have demand, and they go when they don’t. Why would they behave otherwise?

        • herddog505

          Well, it appears form the little data I have (and presented above) that, despite being clobbered by the same real estate downturn that hit CA, FL tax collection rate increased from ’10 to ’11, while CA’s decreased.

          I realize that tax policy is complicated, and it’s not a simple matter to determine to what extent tax policy affects revenue, employment, economic activity, or anything else*, but two things seem pretty clear:

          1.  CA is in a bad way, and;

          2.  CA has notoriously high tax and regulatory burdens.

          I suggest a cause-and-effect.

          ===

          (*) O’ course, politicians don’t have this problem: they will tell you INSTANTLY that their policies will spur economic activity, increase revenues, and otherwise do wonders the likes of which have never been seen in human history.

          • http://pulse.yahoo.com/_425GVKQCLFZMQYYENR7CJBRDVA jb

            A key difference there is that Florida can and has increased its property taxes in the past 30 years, while California can not. This also means that Florida can reinvest more into its infrastructure, while CA can’t.

            But in any case, thanks for at least looking into some comparative info and then **suggesting** a cause-and-effect relationship. Rather than just asserting it without looking into it.

            Thanks for that.

          • herddog505

            See above following my post about tax revenue per state.

            Thank you.