…as government revenue tumbles:
California’s government risks a financial “meltdown” within 50 days in light of its weakening May revenues unless Governor Arnold Schwarzenegger and lawmakers quickly plug a $24.3 billion budget gap, the state’s controller said on Wednesday.
(…)
The state’s revenues from personal income taxes tumbled by 39.9 percent in May from a year earlier while revenues from corporate taxes fell by 52.1 percent…according to a report released by (Controller) John Chiang.”
(h/t R.H. Terry Tory)
New culture always starts in California, so the state is just a forewarning of the impending Obamassiah debt tsunami.
It will be very ugly.
One thing that is stunning to me is the continued call for the state to tax and spend more, even as they are hitting the wall. There seems to be no reforming the leftards short of total collapse. Woe is us.
It’s not clear to me that a financial meltdown will make things much worse for people like me. The public schools haven’t been serious about teaching for more than thirty years, traffic is a problem from 6:30 am to 8:30 pm every workday and afternoons and evenings on weekends, and crime rates are rising. Admittedly, some responsibility for these problems falls on local governments, but most of the responsibility is the state’s.
Wow.
Clearly taxing the rich more will not work – they aren’t making any money either.
I wonder how bad the drop in tax revenues in Arizona and Florida has been as they are the other two states that have really taken a dive ecnomically.
And what will the update here in cda report? Compared to those three states and the us in general we probably look great – somethng that might not be lost on cdn voters.
Novel idea: stop spending so much and get people off their arses.
Why is it revenues tumbled? Could it be that the wealthy individuals and “greedy” corporations they always go after for more taxes are pulling out? Shutting down? Giving up?
It’s not rocket science to know that if you want someone to do less of something, you raise the prices. Higher taxes mean people will buy less, spend less, make less – which means revenues suffer.
You’d think they’d learn that after high gas prices reduced driving and revenues tumbled to the point where they’re now considering a mileage tax to make up for it.
Remember when California, in its Green Zeal, placed a surtax on flat screen TV’s ?
Sales of Flat Screens bottomed in California and went through the roof in Las Vegas.
People are mobile in their shopping habits. They will also be mobile in the place of residency for tax purposes.
Just ask New York City.
I wonder how bad the drop in tax revenues in Arizona and Florida has been as they are the other two states that have really taken a dive ecnomically.
Florida doesn’t have a state income tax. I’m guessing that the state government’s primary revenues are from property and sales taxes, which would, I think, be less affected by a down economy, although certainly not unaffected.
Arizona’s state income tax tops out at a 4.54% rate, compared to California’s 10.3% for 2008 (the “official” rate is 9.3%, but there’s a 1% “mental health surtax” to the extent that personal taxable income exceeds $1 million). I don’t know whether that would make Arizona less susceptible to an economic downturn or not.
People are mobile in their shopping habits. They will also be mobile in the place of residency for tax purposes.
Of course, as soon as certain politicians realize this, they’ll decide to make interstate shopping or interstate moves cost prohibitive or outright illegal.
Because not taxing the hell out of everything would 1) undermine their power and 2) make sense.
The government of the state of California has been run for a long time for the benefit of public employee unions and to fulfill the wish lists of ultra-left groups. California has been covering the shortfall between its income and expenses by selling bonds, which is the equivalent of paying for one’s normal living expenses with credit cards. Recent years have revealed an exodus of productive educated people while the state continues to swell from illegal immigration. Entitlements have exploded while the ever dwindling pool of taxpayers is under more and more pressure to cough up more taxes. Finally, they have hit the wall. It is going to get really ugly.
“Clearly taxing the rich more will not work – they aren’t making any money either.”
Well, here’s a simple solution…tax the wealth! What, nobody thought of this before?
I think that MM and Jim in SV have fairly well laid it out. While Calif. may be something of a bellweather for the rest of the continent I do think that government catering to all of the hippie whackjobs that seem to inhabit the western seaboard is coming to it’s ultimate conclusion. The Utopian dreamworld of the flower power generation is going to be buried in a mountain of self-created debt.
Socialism fails when the socialists run out of somebody else’s money…..
California is proving this……..
revs tumble
Aha, empirical evidence in support of trickle-down economics.
The socialists’ dilemma: go right (eg decrease welfare) and they’ll have no voters; go left and they’ll have no tricklers.
California’s native population has been shrinking for years as the over taxed have moved to neighbouring states and illegal immigrants from Mexico continue to flood in. I have seen some analysis which shows that most of the past California deficits were caused by providing free health, education and other services to illegals who pay no taxes.
Where are the unsung heroes- the celebrities? Why aren’t they paying California’s way out of this mess? Twenty million per film per actor. That kind of scratch has to cover something.
[quote] the state continues to swell from illegal immigration [/quote]
Yes and they believe that the last amnesty resulted in TAX paying Citizens…. What simpletons. When someone has successfully lived without the burden for >10 years
what would make you think that US Citizenship means anything remotely connected to a civic responsibility… Meaningless drivel that a post audit of prior amnesties would unravel
“We keep cutting that board and cutting that board and it’s STILL too short…”
substitute Canaduh for California and it about sums it up. natives not being you know our natives but the home and native land singer types.
California’s native population has been shrinking for years as the over taxed have moved to neighbouring states and illegal immigrants from Mexico continue to flood in. I have seen some analysis which shows that most of the past California deficits were caused by providing free health, education and other services to illegals who pay no taxes
I guess we won’t be hearing “Aille be baaack” anymore.
Osumashi Kinyobe at 1:45 PM ~ Where are the unsung heroes- the celebrities?
Try here for a start.
If only the Feds would let the State fail. The productive sector of California can function rather well without the State bureaucrats preventing them from conducting business profitably and adding huge and mostly needless costs on anything productive. And without tax collectors and police, who needs to pay taxes. As for State services, the highways won’t fall apart immediately and education would improve with library cards or books instead of PC incarceration. Those left-libbers that interpret the Second amendment as the rights of collective militias to bear arms as opposed to individuals, will see that become the replacement for California State-funded police. Illegals might have to move back to Mexico to get free health care (of sorts) and schooling. Perhaps the starving formerly unionized bureaucrats will replace the illegals in doing what most Americans won’t….. Oh shit! the alarm clock just went off…time to get up.
Glasnost, Voigt is “DA MAN”.
I watched “24” this season for him and the hotness that is Tony Almeida. Janeane Garafalo’s character getting a mouthful of Bauer’s pissed-off justice is another highlight.
I foresee an amazing real-life experiment. The individual states are not allowed to run a deficit. We will see California cur all those silly programs and green goals. When all is said and done, when the economy finally turns around, there will be no clamor for more expenses; a clamor for reuced taxation. I say 5 years MAX, probably 4.
I applaud the people of California for voting against every single tax raising measure on the ballot since Proposition 13.
I remember when that passed in 1978, the papers said it was the end of the world and California would slide off into the ocean. Fast forward 30 years, and they are still saying exactly the same damn thing. It was a crock then, and its a crock now.
Schwarzenegger will maybe learn that listening to Kennedy’s for political advice is not a good idea.
They have run Massachusetts into the ground despite spawning innovative companies like Lotus and Polaroid (remember them) and a multitude of software companies in the 1980’s, California will suffer the same fate.
Socialism kills jobs, jobs provide revenue that funds social services. Ipso facto, socialism kills social services.