More on California’s epic self-inflicted failure

Posted by: Phineas on November 28, 2012 at 5:45 pm

**Posted by Phineas


It’s okay. It’s all in the name of fairness:

California residents already contend with one of the most progressive tax codes in the country. Not only does California have high marginal rates, those high rates kick in at relatively modest income levels. California’s middle class residents earning $48,000 a year, for example, pay a state tax rate of 9.3%. Millionaires in 47 other states don’t even pay that high of a marginal rate. However, one of the state tax code’s greatest flaws is it’s over-reliance on upper income households and the revenue volatility it creates, and that is a problem that Prop. 30 would further exacerbate.

As of 2010, the state relied upon 144,000 households, 1 percent of taxpayers, for 50 percent of total state income tax… [With Proposition 30’s passage,] the top 10 percent of earners would be responsible for over 80% of the projected income generated – a fact that Gov. Brown and other advocates of the bill readily acknowledge.

I think I know how the lookout on the Titanic must have felt.

One of the weirdnesses (among many) I’ve noticed on the Left is the assumption that tax compliance is static, that, no matter how high you set the rates, you’ll draw in the expected revenue. That idea is, of course, a crock.

Tax behavior instead is dynamic: raise the rates too high, and rationally self-interested taxpayers will do whatever is legal to avoid them, including moving out of the jurisdiction.

Businesses are already leaving California at a rapid pace. Once Prop 30 really kicks in —with its backdated taxes— businesses and the so-called rich will truly head for the border.

But that’s okay; the left has already figured out the answer — we’ll just charge them exit taxes!

(Crossposted at Public Secrets)

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4 Responses to “More on California’s epic self-inflicted failure”


  1. Sefton says:

    But that’s okay; the left has already figured out the answer — we’ll just charge them exit taxes!

    Who needs a border fence with Mexico, before long they’ll be building a fence and posting border guards to keep California’s taxpayers in – the new Berlin Wall.

  2. Carlos says:

    Is it OK to build a border fence between your failed country/state and the one I live in that will be following in your Democrap Party footsteps in the next few years? I know it won’t stop the economic suicide former Californicators are inflicting upon themselves and the rest of us, but it could slow the agonizing bleeding a little.

  3. What an ingenious way to get those Dust Bowl Okies to go back home!

  4. Carlos says:

    Don’t worry about losing population though, Phineas. I’m sure that with enough incentive the creators and perpetuators of the fiscal insanity known as Detroit would be more than welcome to take charge of California finances because they are so good at fiscal responsibility.

    At least, compared to the jackasses who run Sacto they are.

    And I’m sure the government welfare workers would be more than happy to follow their fearless leaders to CA, too, since they know they can count on more government moneycrack whether the government’s got it or nor because, you know, the taxpayers will always be there and if they are outnumbered by welfare folks (including most government workers) then, by golly, that’s their problem.