…until morale improves. California tax revenues have plunged. And Sacramento’s solution? To increase tax rates, of course.
15 thoughts on “The Beatings In The Not-So-Golden State Will Continue”
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…until morale improves. California tax revenues have plunged. And Sacramento’s solution? To increase tax rates, of course.
Comments are closed.
And yet no matter how dismally statist policies perform, we’ll always have some bozos telling us that what we need is more statism.
=Some= bozos pushing the absurd is a source of humor. A critical mass needed to make it happen is a source of horror.
California is reaping the predictable results of the path it chose. The higher income brackets are much more volatile, so making state revenue dependent on a heavily graduated income tax aimed at soaking the rich makes state revenues volatile as well.
Then they pushed things well past the peak of the Laffer curve, whose existence strongly implies that individuals have their own personal Laffer curves, since no part of the Laffer’s theory includes “total population” as an input. It applies to a population of one as well as one million. The curve also doesn’t include an absolute income scale, so raising taxes to confisicatory levels will decrease the total revenues paid by the rich at any given level of personal income, and it’s being done to people who’ve already seen their income fall dramatically. So California’s tax policy will yield a smaller piece of a smaller pie.
Finally, something not included in Ibn Kuldun’s analysis or Laffer’s early, simple curve (based on Ibn Kuldun), is that people can vote with their feet and just leave to find a state with lower tax rates. If the costs of moving are lower than the costs of staying, allowing for changes in total potential income (surfboard shop owners won’t be moving to Tennessee regardless of tax rates, though they might liquidate and open an ocean-themed pizza joint in Nashville) then people and businesses will leave, taking 100% of their taxable income with them.
Those drawing a state pension will have less incentive to leave, basing their decision on the cost of living, comfort, and other personal measures, but even if they do leave, they still get their checks from California. Their departure would deprive California of the economic activity generated by their local spending. As they depart, California will increasingly be paying other states to babysit its retirees instead of having that money recirculated in California, further decreasing state revenues.
In both those regards (both employed and retired people leaving in droves), California is worse off than Greece because moving to a different state within the US is trivially easy compared to moving to a different EU country with a different language and culture. Greeks are much more likely to sit and suffer through it, whereas California could largely depopulate, probably contrained by how many people are willing to walk away from a house that will never sell in a collapsing local real-estate market.
Ronald Reagan long ago summed up the situation perfectly, saying “Government’s view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.” Sacramento should’ve paid more attention.
And make the pizza surfboard-shaped, dude! Check out that pepperoni hangin’ ten on that most excellently bitchin’ wave of cheese.
The worst thing about too many California transplants is when they arrive in their new state, they all to often start demanding the same expensive government programs that caused the problems in California. They’re living proof that you don’t have to go overseas to be an “Ugly American.”
Back in 1986 when the Air Force assigned me to Colorado, I used to see bumber stickers that read, “Don’t Californicate Colorado!” Unfortunately, they eventually did.
Well, one thing modern California has never run out of is excuses. They’ll find some way to blame these problems on the people who are leaving or the wealthy and “conservatives” who haven’t left yet.
There are always Kulaks, Jews and Gypsies to blame, no?
Yea, when you run out of the real ones, then you find the “crypto” ones.
CA could raise tax revenues by concurrently eliminating the state income tax and raising the state sales tax. Illegal aliens pay the latter but not the former.
Not surprising. When I lived in California my state taxes were horrible, most of it earned doing online consulting and teaching out of state. But California insisted on taxing me on it since I just happened to reside there… So I just moved to Nevada where there is no personal income tax and housing is 1/3 the cost. In fact, the money I saved in not paying California taxes covers my housing, food, utilities expenses.
Multiple that by the tens of thousands of other online workers who used to live in the state and now don’t and its no wonder the tax revenue is plunging.
I wonder how long before they past laws making it illegal for taxpayers to move out and place guards on the “border” to enforce it 🙂
They’ll put one on the eastern border before the southern one.
Yet another utopia that needs an iron curtain.
People escaping “against their own interests” — damn that “false consciousness” — at some point you just have to open up the killing fields…
There are pieces of the Berlin Wall in Las Vegas in the Casinos (one famous piece is in a men’s restroom…) as souvenirs of the victory of capitalism over communism. Maybe California could buy a piece to include symbolically in the wall it will need to build to keep taxpayers in.