Enjoy another Texas vs. California roundup:
The basket of California state taxes — sales, income, and gasoline — rates among the highest in the U.S. Yet California roads and K-12 education rank near the bottom.
California depends on a tiny elite class for about half of its income-tax revenue. Yet many of these wealthy taxpayers are fleeing the 40-million-person state, angry over paying 12 percent of their income for lousy public services.
Excessive state regulations and expanding government, massive illegal immigration from impoverished nations, and the rise of unimaginable wealth in the tech industry and coastal retirement communities created two antithetical Californias.
One is an elite, out-of-touch caste along the fashionable Pacific Ocean corridor that runs the state and has the money to escape the real-life consequences of its own unworkable agendas.
The other is a huge underclass in central, rural, and foothill California that cannot flee to the coast and suffers the bulk of the fallout from Byzantine state regulations, poor schools, and the failure to assimilate recent immigrants from some of the poorest areas in the world.
The result is Connecticut and Alabama combined in one state. A house in Menlo Park may sell for more than $1,000 a square foot. In Madera, three hours away, the cost is about one-tenth of that.
California taxpayers are getting taken to the cleaners, but most of them are completely in the dark about how and why.
I will pose a quick question: Does it seem strange that California has recorded record revenue increases, yet we also see a record number of tax increases and bond issuances on the ballot?
In other words, the state’s tax system is collecting massive amounts of revenues, record amounts, yet politicians are still asking for a record number of new tax increases. For taxpayer advocates, it just doesn’t seem fair and seems very strange at first glance as to how this can even occur.
The truth of the matter is that California’s system of public finance is a complete train wreck and is set up such that no amount of tax revenues collected will ever be enough to satisfy “spending needs.” The so-called baseline expenditure increases are on autopilot and deficit projections are generated despite record revenue increases, a trend projected in the Governor’s May Revise.
(Hat tip: Pension Tsunami.)