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Politics : President Barack Obama -- Ignore unavailable to you. Want to Upgrade?

To: tejek who wrote (55409)	6/10/2009 1:39:37 PM
From: jjkirk	Read Replies (1) \| Respond to of 149317

Welcome to California, Home of the Highest Taxes in the Nation Bro tejek: Re: So then by "we seeing the world" you meant your platoon. I guess you guys are very close. My point was that your taxes did not go up during that period of time that you were defending the world and that's also true for millions of Californians. Unfortunately, the cost to operate the state continues to go up.......its expenses are not fixed at 1979 levels. Hence, the shortfall of revenue.....understand soldier? Carry on [Emphasis mine.] My,my, tejek! There you go again. Facts are, Prop 13 allowed a one percent growth in RE taxes per year, but an overall growth of two percent including certain "non-tax" fees. So, I did have a modest increase in the taxes on my rental those 13 years. I am intrigued by your interest in the subject...perhaps California taxation has been a life-long interest; or, perhaps, sadly, you are a laid-off California employee. In any case, I have unearthed this magnificent piece on the history of California taxation from Mike Mishedlo via these very SI threads. Message 25704795 I certainly hope you have the time and talent to read, understand and absorb this very enlightening treatise by Doug Thornburn. Please come back if you wish on another subject, perhaps your athletic, academic, or, of course, your trading exploits. I look forward to our further visits. I have copied only a text version here. The complete version with charts is on Mish's blog here: howestreet.com Enjoy! YMHOS, jjkirk Welcome to California, Home of the Highest Taxes in the Nation Mike Shedlock writes: Doug Thorburn sent me a nice presentation that he wrote on the tax situation in California. In spite of having the highest taxes in the nation, the state is broke. Doug Writes: The state legislature recently approved tax increases for 2009 and 2010 that catapulted the state’s high-tax ranking to number one in the country. Several propositions that would have extended these increases for another few years were placed on the May ballot. Surprisingly, Californians rejected them down by roughly two to one margins. California voters have elected and re-elected arguably the most extravagant spenders of other people’s money of any state. Democrats, with a huge majority, uniformly approved of the higher taxes. Republicans, barely a one-third minority, almost uniformly opposed them. California voters leaned Republican on arguably the most significant issue of the day while voting for Democrats. This is either schizophrenia at its finest, or the beginning of a popular rebellion against high taxes. Californians might have rebelled long ago had they known that state spending, adjusted for population growth and incomes since 1997, would be about two thirds of 2007’s actual spending. To get a feel for the extraordinary increase in taxes, which translates to spending, over the decades, a history of sales tax rates can be helpful. This tax was a mere 5% during the early 1970s. The rates below do not include district taxes averaging 1%, which were probably non-existent early on. History of Sales Tax Increases howestreet.com According to Wikipedia, “Over the past 10 years state spending from state sources has more than doubled in nominal terms (not adjusted for inflation), and during the current governor's tenure state spending from state sources has risen almost 40 percent.” howestreet.com When we adjust for today’s current relatively low inflation we can begin to see just how profligate state government has been. howestreet.com To be fair, however, we need to adjust for both inflation and population growth. Let’s be fair. howestreet.com Now we can see just what spendthrifts—with other people’s money no less—the state’s politicians have been since FY 1997-1998. howestreet.com This is an enormous and, as we have recently learned, unsustainable growth in government spending. From 1979 through 1990, the Gann Amendment limited the growth in state spending to inflation and population growth. Not only does such a spending limit need to be reinstated, but also the fact that high-income earners pay an inordinately large proportion of state income taxes needs to be addressed. In 2006, the top 15% of state taxpayers paid 84% of personal income tax. The top 1% paid 48% of all such taxes (up from 39% as recently as 2003). These taxpayers can vote with their feet. Recently, when Maryland increased its rate on top income-earners, one-third of those who were hit by the tax became non-residents the following year (they probably converted what were vacation homes in Florida to main homes). Maryland actually lost revenue due to this tax rate increase because the extra percent they took from the two-thirds of high income taxpayers remaining was more than offset by the 100% drop in tax collections from the one-third who left. The approximate additional tax paid by a single person for the privilege of living in California vs. a selection of other states follows: howestreet.com Doug has a website at dougthorburn.com Thanks Doug. One small point: Maryland and many other states have declining revenues not just because people are leaving the state, but because of the sharp dropoff in collections due to the economy. However, many will indeed be voting with their feet as Californian citizens receive very little for the taxes collected. Municipal workers and those on state pension plans are doing quite nicely, however. Everyone else foots the bill. Mike "Mish" Shedlock howestreet.com