Ahnold gets tough with the PRC...finally

[Onkel Neal]

http://online.wsj.com/article/SB124536815497429421.html

The best idea is his semi-endorsement of a flat tax for California. The state's budget problem has two main causes: The first is runaway spending and the second is a tax structure that smothers businesses and entrepreneurs. California's income tax is the most progressive of all 50 states, with the second highest top rate (10.55%) after New York City's 12.62%. The Governor's revenue office calculates that between 50% and 55% of the income tax in the state comes from Kobe Bryant and the rest of the richest 1% of taxpayers.

This sounds like a liberal's tax paradise, but the "soak the rich" system has imploded on itself. As tax rates keep rising, more Californians move to places like Nevada and Texas where they can pay zero income tax, leaving Sacramento with fewer revenue sources. Moreover, the progressive rate structure means that California experiences more extreme gyrations in its revenues than any other state.

Getting tough to get the other guy to pay for everything in California.

And it isn't just California, have you seen the feds? Taxes are going to have to increase, even for those not currently paying taxes, to pay for the current unfunded spending coming out of Washington. The Chinese, and all other US bond holders will demand it.

[SteamWake]

Buisness and individuals are also being driven out of New York in droves. Soon it too will have a shortfall in tax revenue.

Its hard for them to understand evidently that simply rasing taxes does not necessarly equate to more income.

[TheSatyr]

Having lived in CA for roughly 40 years (till I was finally chased out by more tax increases), I'd have to say that the biggest problem there is that the Democratic Party and their philosophy is so entrenched through nearly all layers of government,state and local,that there really is nothing the Republicans can do there other than bang their heads against the wall.

I really don't think Arnold knew what he was getting into when he ran for Governor. The Dems control the Legislature,therefore they control the State. Not really much any Governor can do,Dem or Repub.

The only Governor I can remember who really fought the legislature was Pete Wilson and only in his second term when he had nothing to lose by doing it. He still failed to reign in the legislature but at least he tried.

[Onkel Neal]

Yeah, I think you're right. California is finding out what happens when you ask 1% of the people to pay 48% of the taxes, which benefits the low income classes. They've killed the Goose.

Small-business owners such as Manuel Belmarez are fretting over how to cope with payment delays from the state.

It's like watching Atlas Shrugged come to life, the John Gaults are bailing out of the Golden State.

[Zachstar]

You mention Ayn Rand you lose...

You know there is nothing wrong with reducing tax burdens on the rich as long as they commit to some simple rules.

A) You dont outsource
B) You hire citizens
C) You obey the rules

Ok let me put it simply the day that a huge dent is put in outsourcing is the day I support reduced taxes for the rich.

[Onkel Neal]

Originally Posted by Zachstar

You mention Ayn Rand you lose...

.

I do? I guess I didn't read the rules closely enough

Still, I find it really interesting to see fact mirroring fiction. Say I'm a wealthy businessman, and the tax burden becomes more than I'm willing to bear in order to support...uh, let's see, prison guards unions that make 2x the national average and health insurance for millions of illegal aliens--see ya, California, you're in my rear mirror.

I do agree with you on incentives for hiring Americans and not ousourcing, we have common ground there, Zach.

[Onkel Neal]

California moves a life-saving step away from the edge.

To close a $26 billion budget gap, the deal reduces spending by $15 billion, including in previously untouchable though bloated education and health-care programs. Democrats were even forced to implement welfare reforms that most of the rest of America put in place 15 years ago: a work requirement and a four-year limit. The agreement eliminates about $2 billion a year in automatic benefit increases and saves another $1 billion by auditing in-home health-care payments that are notorious for fraud. “Only in California,” says Mr. Schwarzenegger, “is welfare still a way of life.”

Score one for the Governator.