Via Mish’s:
Inquiring minds are asking “Why Is California Broke?” It’s a good question. Please consider …
* California has the 3rd highest state income tax in the nation: 9.55% tax bracket at $47,055 and 10.55% at $1,000,000…
* California has the highest state sales tax rate in the nation by far at 8.25%. Indiana is next highest at 7%.
* California corporate income tax rate is 3rd worst in the nation with a rate of 8.84%…
* California ranks 13th in property taxes.
* California has the fourth highest capital gains tax 9.55%.
* California has the highest gasoline tax as of January 2010, averaging 65 cents/gallon. The national average is 47.4%…
* California has one of the highest state vehicle license car taxes, 1.15% per year on value of vehicle, up from 0.65% in 2008.
So where’s the money going?
* 1 in 5 in LA County receiving public aid, nearly 2.2 million people as of February 2009. 20% in Los Angeles County receive public aid
* California has 12% of the nation’s population, but 36% of the country’s TANF (“Temporary” Assistance for Needy Families) welfare recipients – more than the next 8 states combined. Unlike other states, this “temporary” assistance becomes much more permanent in CA…
* California prison guards highest paid in the nation. The maximum pay of California’s prison guards is nearly 40 percent higher than that of the highest-paid guards in 10 other states and the federal government, according to a study by the California Department of Personnel Administration. Cal-Taxletter
* California teachers easily the highest paid in the nation…
* California now has the lowest bond ratings of any state, two steps above junk. The new rating affects about $72 billion of general obligation and lease-supported bonds…
* California ranks 44th worst in “2008 lawsuit climate.”
* California, a destitute state, still gives away college education at fire sale prices. California community college tuition is by far the lowest in the nation. Nationwide, the average community college tuition is 4.5 times higher than California CC’s. This ridiculously low tuition devalues education to students – resulting in a 30+% drop rate for class completion. Moreover, 2/3 of California CC students pay no tuition at all – filling out a simple unverified “hardship” form that exempts them from any tuition payment, or receiving grants and tax credits for their full tuition.
* California offers thousands of absolutely free adult continuing education classes. In San Diego, over 1,400 classes for everything from baking pastries to ballroom dancing are offered totally at taxpayer expense…
* California residential electricity costs 13.81 cents per kilowatthour. The national average is 6.99-8.49…
* It costs 38% more to build solar panels in California than in Tennessee – which is why European corporations have invested $2.3 billion in two Tennessee manufacturing plants to build solar panels for our state…
The above lists reformatted and reordered from a list compiled by Richard Rider, Chairman, San Diego Tax Fighters.
Too much taxing, too much regulating, too much spending. In other words – California has applied the liberal dream of economics, and done so for decades, and now California is broke. Just thank goodness the Founders forbade States to create currency because if they hadn’t, California would be even broker than it is now – the only thing which applies a bit of discipline to the liberals in California is the fact that California can’t print money (though I’ll bet a full audit would show accounting practices which would make Enron look honest in comparison).
The party is over – though, of course, State level liberals are hoping that Obama will swoop in with bags of new-printed money to allow them to paper over the fiscal cracks. He might well do that, but it just puts off the day of reckoning. There is no such thing as a free lunch. Everything in this world has to be paid for – and so when you provide “free” education to another kid in community college, you are actually taking money out of someone else’s pocket to do it. You have a net loss – the kid is not being productive, the person who pays for it has less resources.
The fundamental economic flaw of liberalism (to differentiate from the underlying moral flaw – that of the perfectibility of Man) is that it sees the transient present as written in stone. This holds that if you are poor now then you must have been poor yesterday and you will certainly be poor tomorrow unless liberals come in and rescue you. This is utter nonsense – yesterday I was talking with a real estate agent and she described this man whom she did a lot of business with; He’s snatching up properties here in Las Vegas for a song and holding them as investments. Oooh, go the liberals – what a cruel, greedy man taking advantage of the sufferings of others! We must tax him and regulate him to prevent him from stealing. Trouble is, he came to America some years ago as a penniless immigrant and by sheer hard work and guts on the part of himself and his wife, he has risen to great wealth…and he’s not being cruel, he’s just buying properties which are at a discount through no fault of his own. He was poor, he became rich – probably the only thing which could have prevented him from becoming rich would have been a government attempt to “help him”.
So it is with the poor kid from the disadvantaged background – he is poor, but he’s no poorer than the penniless immigrant who just got to America and, perhaps, doesn’t even speak the language when he gets here. Whether or not the poor American and the poor immigrant will be rich in 20 years depends entirely up what each of them are prepared to do. Work hard and sacrifice immediate gratification in favor of future prosperity, and wealth will almost certainly result – head off to community college to get a “free” education while living with the parents and, in practical terms, neither learning about life nor contributing to society and what you might have 20 years later is a modestly prosperous school teacher or government bureaucrat – or, perhaps, a permanent student sucking up grants and loans which allow him to indefinitely put off the end of adolescence. Liberals do not understand this.
And so we get all this spending – designed to “even the playing field” and make “the rich” pay their “fair share”. They are “investing” in the future. What they are doing is spending other people’s money – which makes the recipient an ingrate and the forced-donor angry while at the same time preventing reality from forcing wise decisions upon all concerned.
It is time we consigned liberalism to the ash heap of history.
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