PorkChopSandwiches
11-08-2012, 07:59 PM
http://i.imgur.com/3IHib.jpg
Prior to the passage of Prop 30, California had the second highest state income tax rates in the nation. Now California has the highest state income taxes in the nation along with the highest gasoline taxes and sales taxes.
This will cause more businesses to leave California for states that have less punitive taxes, including states that have zero income tax, and much friendlier business and regulatory environments. Attached is a partial list of businesses that have recently left the state, and while there are many names you will not recognize, the list includes big names like Apple Computer, Denny's Corp., Fluor Corp., Hewlett-Packard, Hilton Hotels, Intel Corp., Nissan North America, Northrop Grumman, StarKist, USAA Insurance. It doesn't always mean that they moved their main headquarters because many of these are headquartered out of state, but they have moved major regional centers out of California employing lots of workers.
That only provides half of the picture. It doesn't tell you what companies will not come to California that aren't here now. Does anyone think a new, ambitious start-up company, run by driven, energetic, entrepreneurial-minded risk takers, is planning to locate in the highest taxed state in the nation? Chief Executive Magazine surveyed 650 chief executives and the business executives ranked California the absolute worst state in the nation for business for the 8th year in a row. These are thousands upon thousands of jobs that will never come to this state.
I predict that the increase in income tax rates in California will lead to less tax revenues collected by the state. The state will get more tax revenues in 2012 because the law just passed and it is retroactive to 1/1/12, but from 2013 forward less income tax revenues will come to Sacramento. Businesses will be leaving the state, and those high income people that do stick around have ways to take less income, move assets around, etc. so that they do not have to pay more taxes. In other words, people will not sit still and take it.
Listening to the radio yesterday, the elation of school officials and college students in the state college system was at a high level, and officials were talking about retracting tuition increases that had been planned. It won't take long for those officials to realize that the problem has not been solved. New tax revenues will not be materializing.
And what is the problem after all? Public employee pensions. The California State Teachers Retirement System has a $65 billion unfunded liability over the next 30 years. A teacher can retire at age 60 and receive $54,000 annual pensions for the rest of their life plus free health care. The average firefighter cost $157,000 a year in pay and benefits and can retire at age 50 with a pensions equal to 90% of his/her highest salary, plus free lifetime health benefits. Much the same with police. I think most of us understand how we got here. Governor Brown, in his first term back in the 70s, allowed, for the first time, public employees to unionize. The unions take mandatory deductions from the paychecks and use those funds for Democratic election campaigns. The elected Democrats then cut the salary and benefit deals the unions ask for. Prop 32 was an attempt to stop that, but it failed passage.
The unaffordable and unsustainable pension deals are crowding out all other spending needs for essential services in the state of California. The state of California is insolvent. The Prop 30 tax increase will only drive productive people out of the state, leaving less revenues, and thus will totally back fire. We will start to see more municipal bankruptcies like Vallejo, Stockton, and San Bernardino. When a municipality declares bankruptcy, the future is very bleak for its residents.
I was listening to McIntyre in the morning a few days before the election and he was interviewing Governor Brown about Prop 30 and he asked the Governor, with the state is such dire fiscal condition, why did he and the Democrats in the state legislature vote to move forward with the High Speed Rail project between Bakersfield and Fresno. The first stage of the high speed rail will cost $68 billion. Governor Brown became argumentative and made two main points: 1) France has a high speed rail, and 2) with such naysayers we never would have had the Mars Rover.
California is in a death spiral. Prop 30 has not saved the state. It will make it much worse. There are many great people and families that have been here for generations who will begin uprooting their families to move out of state. The future in California is bleak.
PS
I didnt write it, just thought I would pass it along.
Prior to the passage of Prop 30, California had the second highest state income tax rates in the nation. Now California has the highest state income taxes in the nation along with the highest gasoline taxes and sales taxes.
This will cause more businesses to leave California for states that have less punitive taxes, including states that have zero income tax, and much friendlier business and regulatory environments. Attached is a partial list of businesses that have recently left the state, and while there are many names you will not recognize, the list includes big names like Apple Computer, Denny's Corp., Fluor Corp., Hewlett-Packard, Hilton Hotels, Intel Corp., Nissan North America, Northrop Grumman, StarKist, USAA Insurance. It doesn't always mean that they moved their main headquarters because many of these are headquartered out of state, but they have moved major regional centers out of California employing lots of workers.
That only provides half of the picture. It doesn't tell you what companies will not come to California that aren't here now. Does anyone think a new, ambitious start-up company, run by driven, energetic, entrepreneurial-minded risk takers, is planning to locate in the highest taxed state in the nation? Chief Executive Magazine surveyed 650 chief executives and the business executives ranked California the absolute worst state in the nation for business for the 8th year in a row. These are thousands upon thousands of jobs that will never come to this state.
I predict that the increase in income tax rates in California will lead to less tax revenues collected by the state. The state will get more tax revenues in 2012 because the law just passed and it is retroactive to 1/1/12, but from 2013 forward less income tax revenues will come to Sacramento. Businesses will be leaving the state, and those high income people that do stick around have ways to take less income, move assets around, etc. so that they do not have to pay more taxes. In other words, people will not sit still and take it.
Listening to the radio yesterday, the elation of school officials and college students in the state college system was at a high level, and officials were talking about retracting tuition increases that had been planned. It won't take long for those officials to realize that the problem has not been solved. New tax revenues will not be materializing.
And what is the problem after all? Public employee pensions. The California State Teachers Retirement System has a $65 billion unfunded liability over the next 30 years. A teacher can retire at age 60 and receive $54,000 annual pensions for the rest of their life plus free health care. The average firefighter cost $157,000 a year in pay and benefits and can retire at age 50 with a pensions equal to 90% of his/her highest salary, plus free lifetime health benefits. Much the same with police. I think most of us understand how we got here. Governor Brown, in his first term back in the 70s, allowed, for the first time, public employees to unionize. The unions take mandatory deductions from the paychecks and use those funds for Democratic election campaigns. The elected Democrats then cut the salary and benefit deals the unions ask for. Prop 32 was an attempt to stop that, but it failed passage.
The unaffordable and unsustainable pension deals are crowding out all other spending needs for essential services in the state of California. The state of California is insolvent. The Prop 30 tax increase will only drive productive people out of the state, leaving less revenues, and thus will totally back fire. We will start to see more municipal bankruptcies like Vallejo, Stockton, and San Bernardino. When a municipality declares bankruptcy, the future is very bleak for its residents.
I was listening to McIntyre in the morning a few days before the election and he was interviewing Governor Brown about Prop 30 and he asked the Governor, with the state is such dire fiscal condition, why did he and the Democrats in the state legislature vote to move forward with the High Speed Rail project between Bakersfield and Fresno. The first stage of the high speed rail will cost $68 billion. Governor Brown became argumentative and made two main points: 1) France has a high speed rail, and 2) with such naysayers we never would have had the Mars Rover.
California is in a death spiral. Prop 30 has not saved the state. It will make it much worse. There are many great people and families that have been here for generations who will begin uprooting their families to move out of state. The future in California is bleak.
PS
I didnt write it, just thought I would pass it along.