Category Archives: Taxation

Hasta La Vista Father Christmas: California Post-Election Blues

“Christmas, children, is not a date. It is a state of mind.”  Mary Ellen Chase

There will be no Christmas in May for California. What happened to California?  How did we come to this: poised on the brink of State bankruptcy?

Reason TV has produced an excellent video analysis. Unfortunately, it emphasizes too heavily the role of public employee unions in the State’s budget woes and doesn’t spend enough time analyzing how wasteful spending has compounded the crisis.

While voters overwhelming voted “Yes” (by the almost mythical 2/3 “supermajority”) to preventing salary increases for members of the legislature in budget deficit years, the overwhelming majority of these useless State Senators and Representatives will be re-elected. Go figure.

It’s not a surprise that there is not one county in California where a majority voted “Yes” on Propositions 1A, 1B, 1C, 1D and 1E.

It has always been my contention that Californians like to spend money, they just don’t like to pay the bills.

EXTRA READING:

Sundown for California, The American
California’s Dependency Culture, George Will
Voters Say ‘no way’ to budget ballot measures, The Sacramento Bee
California budget mess: Where did our money go?, San Jose Mercury News
A California election left open to interpretation, The Los Angeles Times

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Filed under California, California Budget Crisis, Politics, Taxation

California’s East Berlin Syndrome: the good and bad in the Sunday Merc

The Good: Mike Swift has written an excellent, balanced article, “In taxing times, target the rich?” Paul McCauley and Brad Rooker are attempting to qualify an initiative that will levy a one-time 55 percent “wealth” tax on property worth $20 million (individual) or $40 million (joint) as well as a permanent 35 percent increase on joint-filers making more than $500,000 annually.

This initiative is a cynical play on class warfare. McCauley’s statement to the Merc is the typical socialist fare: “… the educational establishment, the media, government mouthpieces, institutional churches and nearly everyone else have mesmerized the working class into thinking that the rich deserve the wealth and income they have.” Mr. and Ms. Working Class you are just mesmerized zombies who need McCauley and Rooker (whoever they are) to free you from your bondage. The rich don’t “deserve” the wealth and income they have, but they “earned” it and it belongs to them. Here’s a thought: if you want a piece of that pie, use some initiative and entrepreneurial spirit to earn your own! Their choice of targets is rather odd, given that Rooker has enlisted the California Teachers Association (i.e., educational establishment) to collect signatures to qualify the initiative for the November ballot. Of course, part of that 55 percent income tax is promised to fund California’s cause celebre, “environmental protection.” I am waiting for the day when some activist proposes that we protect the California environment by moving all the people to neighboring states.

The article’s most insightful comment comes from Kris Vosburgh of the the Howard Jarvis Taxpayers Association, describing the California Legislature as suffering from East Berlin Syndrome, “thinking there’s a wall around California.” At one time this attitude had merit. The benefits of living in California–its mild climate, myriad recreational activities and entertainment, and once plentiful jobs–kept people and employers bound to the State. However, higher taxes and an increasingly anti-business attitude are pushing individuals and corporations out. Unfortunately, I have personal experience with this phenomenon. Citing the increasing cost of doing business in California, the company for which my husband worked for 16 years, closed all of its California offices–pulling operations back to Colorado and the East Coast. Eighteen months later, my 50-year old husband still has not found another job in his chosen profession.

Is my husband’s dilemma the fault of California’s wealthiest citizens? Does this incite in me a burning desire to tax their heinies in a fit of rage? Absolutely not. Although Mssrs. McCauley and Rooker would be happy if it did. Increasing wealth and income taxes will only inspire some of the wealthy (many of whom are business owners) to move out of California, leaving more workers without jobs and decreased taxes from revenue. It will motivate others to find tax shelters and loopholes. In the end, this initiative will provide no lasting solution to California’s economic woes. It is merely an symbolic act pandering to emotion and resentment.

The Bad: The Mercury News is no doubt a liberal-leaning newspaper, and its Editorial staff have been cheerleading for Barack Obama for months. However, I was surprised by the shallow argument given in support of Obama’s experience in the Sunday editorial “Palin renews McCain’s maverick image, but is clearly unqualified.” The Merc writes “In the Senate, in organizing a stunningly successful national campaign and through 18 months of hard campaigning for the nomination, Obama proved to be capable, articulate and knowledgeable as anyone in Congress–and certainly the equal of McCain.” Obama’s Senate experience is weak at best. He’s spent approximately 143 working days in the Senate (a little more than four months), has authored no legislation that has been signed and enacted, and has never held a meeting of the Senate Foreign Relations Committee that he was selected to chair. This can’t even come close to matching McCain’s 36 years of Senate experience. Even Sarah Palin has more leadership experience: helping her husband run their family business, as city council member, as mayor and in her two years as Governor of Alaska. Does the Mercury News really believe that merely campaigning for President (keep in mind that Obama has staff who organize and run the campaign) qualifies a person for that job? What a stunningly weak argument.

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Filed under 2008 Election, Barack Obama, California, John McCain, Politics, Sarah Palin, Taxation