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Strategies & Market Trends : The Residential Real Estate Crash Index -- Ignore unavailable to you. Want to Upgrade?

To: Jim McMannis who wrote (177956)	1/19/2009 2:11:47 PM
From: GraceZ	Read Replies (1) \| Respond to of 306849

The coming involuntary tax revolt will be a whopper. CA has a real problem during any kind of recession that involves stock market swoons or RE swoons in that their tax receipts are highly dependent on very high income earners. High income earners have incomes that are highly dependent on closely held company profits as well as capital gains. This type of income is the most subject to economic cycles. I live in a state which has a much flatter distribution of income, a much wider tax base, thus not nearly as subject to this type of serious fluctuation in state revenues. That said, even Maryland is experiencing a serious budget shortfall. Nothing even near the scale of CA, though, primarily because we weren't experiencing shortfalls during the best years as CA was and we set up a "rainy day" fund during the good years. If you run a deficit in the best years, you don't have a prayer in the worst.