You may have heard that France’s new socialist President Francois Hollande wants to tax anyone earning more than a million francs a year at 75%.
One of the people that France’s high tax rates have already driven out is supermodel Laetitia Casta.
So remember liberals: When you hike taxes to the stratosphere, you’re driving out this:
Won’t someone please think of the supermodels?
I’ve got another Texas vs. California piece coming around on the guitar, but I thought there was
Hold on to your hats, but it seems that California voters might, just might, be catching on that the Democrats who run California’s state government are wasting their money.
I will now wait for the indignant shouts of incredulous outrage to die down.
Support for Gov. Jerry Brown’s plan for billions of dollars in tax hikes on the November ballot is slipping amid public anxiety about how politicians spend money, but voters still favor the proposal, according to a new USC Dornsife/Los Angeles Times poll.
Well, I did say “might.”
The findings suggest that voters are leery of sending more cash to Sacramento in the wake of a financial scandal at the parks department, spiraling costs for a multibillion-dollar high-speed rail project to connect Northern and Southern California and ill-timed legislative pay raises.
If voters aren’t willing to stop spending for a $100 billion train to nowhere that everyone know will never be completed, and which would lose even more money every year if it was, when will they?
Brown’s measure would temporarily raise income tax rates on high earners for seven years and boost the state sales tax by a quarter-cent for four years in a bid to avoid steep cuts in funds for schools and other programs.
Note that word: “temporary.”
Anyone with even a passing knowledge of the way politics actually works knows that there’s no such thing as a “temporary” tax hike. The only thing that prevents Democrats (and establishment Republicans) from spending every cent of every tax collected and more is booting them out of office. Raising taxes simply ensures that they’ll spend all the new revenue and additional money they don’t have on top of that. And with the fiscal tsunami California is facing from bloated government, spiraling debt, and gold-plated public employee union pensions that will bankrupt the state, those “temporary” taxes will never be repealed. Ever.
And two or four years down the line, the next Democratic governor will be asking the voters to approve another “temporary” tax hike…
It’s that time of year again. Texas is having it’s annual tax free weekend this weekend, August 17-19, for back-to-school goods like clothing under $100, school supplies, etc. And this year, the previously tax-free but now-tax-covered Amazon is participating as well.
Just got off a Texas Public Policy Foundation conference call with Chuck DeVore and Arlene Wohlgemuth on the effects of the Supreme Court ObamaCare decision. Just in case you hadn’t read anything on the Internet today, that ruling was 5-4 affirming ObamaCare as constitutional, majority opinion written by Chief Justice Roberts, not on Commerce Clause grounds, but on congress’ ability to tax:
The Affordable Care Act is constitutional in part and unconstitutional in part. The individual mandate cannot be upheld as an exercise of Congress’s power under the Commerce Clause. That Clause authorizes Congress to regulate interstate commerce, not to order individuals to engage in it. In this case, however, it is reasonable to construe what Congress has done as increasing taxes on those who have a certain amount of income, but choose to go without health insurance. Such legislation is within Congress’s power to tax.
Here some no-doubt random bits of information I gleaned from the conference call:
This TPPF policycast also covers some of the same topics discussed on the conference call.
So: That’s my brief recap of the conference call. I’m still digesting the ruling itself, and reactions to the ruling. I might be doing that for some time…
The challenge with covering the respective fortunes of Texas and California is where to cut off the news roundup. Here’s news of how California is sucking, and Texas isn’t, from the last month or so:
Things will only get worse in the coming years as Democratic Gov. Jerry Brown and his green cadre implement their “smart growth” plans to cram the proletariat into high-density housing. “What I find reprehensible beyond belief is that the people pushing [high-density housing] themselves live in single-family homes and often drive very fancy cars, but want everyone else to live like my grandmother did in Brownsville in Brooklyn in the 1920s,” Mr. Kotkin declares.
Also this:
Middle-class workers—those who earn more than $48,000—pay a top rate of 9.3%, which is higher than what millionaires pay in 47 states.
The one where you tell potential voters “I’m going to raise your taxes.” We all know how well that worked out for him:
Sadly, the Saturday Night Live “What Were You Thinking?” skit with Mondale does not appear to be anywhere online…
…or filed an extension, now would be a Real Good Time to do so.
Remember: Tax fraud is best left to the professionals.
I had a maid service come clean my house in advance of a family event I’m hosting this weekend. It’s amazing the difference between “Bachelor Clean” and “Clean Clean.” It’s almost as big as the difference between “Obama Smart” and “Actually Smart”…
If we build the Raspberry Pi in Britain, we have to pay a lot more tax. If a British company imports components, it has to pay tax on those (and most components are not made in the UK). If, however, a completed device is made abroad and imported into the UK – with all of those components soldered onto it – it does not attract any import duty at all. This means that it’s really, really tax inefficient for an electronics company to do its manufacturing in Britain, and it’s one of the reasons that so much of our manufacturing goes overseas. Right now, the way things stand means that a company doing its manufacturing abroad, depriving the UK economy, gets a tax break. It’s an absolutely mad way for the Inland Revenue to be running things.
(Hat tip: Slashdot)
Don’t forget that there’s a state constitutional amendment election Tuesday, November 8 (as well as various local elections, bond issues, etc.). A few roundups and recommendations from:
As for myself, I’m currently leaning toward voting Yes on Proposition 1 and No on all the rest.
Blue Dot Blues has a roundup of several additional sources you can go to, including some from the other side of the aisle. When in doubt, voting against whatever the Austin Chronicle endorses will seldom steer you wrong…
Tax revenues in Texas rose 11.8% in September compared to September a year ago.
Meanwhile, California took in 4 percent less than anticipated in September, falling $300 million short in September alone and $700 million short for the year.
These numbers offer me a chance to offer up my long-in-gestation comparison between Texas and California.
Both Texas and California share a number of similarities: They are the two most populous states in the Union, both are southern states with warm climates, both have long coastlines and important ports handling international trade, both share a border with Mexico, both have diverse populations and diversified economies, including extensive portions of the agriculture, energy, and high tech sectors.
The biggest difference between the two is their respective governments. Texas, of course, is the paragon of the red state model (low tax, low spending, limited government, non-union) whereas California is the classic example of the blue state model (high tax, high spending, expansive welfare state, closed shop). Texas kept government small, tightened its belt and lived within its means. California spent like there was no tomorrow, jacked tax rates into the stratosphere, and gave generous contracts to public employee unions. Now Texas is doing well and California is going broke.
So what example should America follow, that of deficit-slaughtering, budget-cutting, seriously limited government in Texas, which has added 730,000 jobs in the past decade, or that of regulation-happy, spend-mercilessly, owe-everything, flee-this-place-quickly California, which has lost 600,000 jobs during the same period?
Texas has some of the best cities for jobs in the country. California? It “boasted zero regions in the top 150.”
Chief Executive ranks Texas as the best state for business, and California as the worst.
High tech companies are fleeing California for low tax states. In fact, high earners inevitably flee high tax states for low tax states:
Examining IRS tax return data by state, E.J. McMahon, a fiscal expert at the Manhattan Institute, measured the impact of large income-tax rate increases on the rich ($200,000 income or more) in Connecticut, which raised its tax rate in 2003 to 5% from 4.5%; in New Jersey, which raised its rate in 2004 to 8.97% from 6.35%; and in New York, which raised its tax rate in 2003 to 7.7% from 6.85%. Over the period 2002-2005, in each of these states the “soak the rich” tax hike was followed by a significant reduction in the number of rich people paying taxes in these states relative to the national average. Amazingly, these three states ranked 46th, 49th and 50th among all states in the percentage increase in wealthy tax filers in the years after they tried to soak the rich.
Here’s a comparison between California and Texas that explains, in great detail, how and why Texas is kicking California’s ass. Remember those job creation numbers, so ably depicted by WILLisms?
Now compare Texas to California via this chart from Mark J. Perry’s Carpe Diem blog:
Another reason Texas is thriving is that it doesn’t have overpaid, all-powerful public sector unions.
High tech employees are fleeing California for Texas, because they can keep more of what they make, the government isn’t going bankrupt, and the roads and schools are now better in Texas. Despite all the money California spends on a a bloated public sector, the actual core services delivered are worse in California than they are in Texas:
“Today, you go to Texas, the roads are no worse, the public schools are not great but are better than or equal to ours, and their universities are good. The bargain between California’s government and the middle class is constantly being renegotiated to the disadvantage of the middle class.”
Just how broke California is became apparent in a recent Michael Lewis piece in Vanity Fair. It illustrates who irretrievably broken California’s politics and finances are, and just how little a dent Gov. Arnold Schwarzenegger made in fixing the problem:
David Crane, the former economic adviser—at that moment rapidly receding into the distance—could itemize the result: a long list of depressing government financial statistics. The pensions of state employees ate up twice as much of the budget when Schwarzenegger left office as they had when he arrived, for instance. The officially recognized gap between what the state would owe its workers and what it had on hand to pay them was roughly $105 billion, but that, thanks to accounting gimmicks, was probably only about half the real number. “This year the state will directly spend $32 billion on employee pay and benefits, up 65 percent over the past 10 years,” says Crane later. “Compare that to state spending on higher education [down 5 percent], health and human services [up just 5 percent], and parks and recreation [flat], all crowded out in large part by fast-rising employment costs.” Crane is a lifelong Democrat with no particular hostility to government. But the more he looked into the details, the more shocking he found them to be. In 2010, for instance, the state spent $6 billion on fewer than 30,000 guards and other prison-system employees. A prison guard who started his career at the age of 45 could retire after five years with a pension that very nearly equaled his former salary. The head parole psychiatrist for the California prison system was the state’s highest-paid public employee; in 2010 he’d made $838,706. The same fiscal year that the state spent $6 billion on prisons, it had invested just $4.7 billion in its higher education—that is, 33 campuses with 670,000 students. Over the past 30 years the state’s share of the budget for the University of California has fallen from 30 percent to 11 percent, and it is about to fall a lot more. In 1980 a Cal student paid $776 a year in tuition; in 2011 he pays $13,218. Everywhere you turn, the long-term future of the state is being sacrificed.
It’s even worse at the local level, where cities are going broke do to outrageous union pensions, such as in San Jose:
It shows that the city’s pension costs when he first became interested in the subject were projected to run $73 million a year. This year they would be $245 million: pension and health-care costs of retired workers now are more than half the budget. In three years’ time pension costs alone would come to $400 million, though “if you were to adjust for real life expectancy it is more like $650 million.” Legally obliged to meet these costs, the city can respond only by cutting elsewhere. As a result, San Jose, once run by 7,450 city workers, was now being run by 5,400 city workers.
What do the citizens of California get for some of the highest public sector wages in the country? Police and firefighters that stand around watching a man drown.
San Jose is far from the worst:
Back in 2008, unable to come to terms with its many creditors, Vallejo declared bankruptcy. Eighty percent of the city’s budget—and the lion’s share of the claims that had thrown it into bankruptcy—were wrapped up in the pay and benefits of public-safety workers.
You cannot tax your way to prosperity.
You cannot spend your way to prosperity.
Government can only create the conditions that allow the free market to create jobs.
The red state model works.
The blue state model doesn’t.