San Diego Tax Fighters
10969 Red Cedar Dr.
San Diego, CA 92131
Voice: (858) 530-3027
Email: RRider@san.rr.com
Thursday, 1 December, 2011
Press Release – Authored by Richard Rider
Governor Jerry Brown has gone absolutely bonkers – proposing a $7 billion tax increase
Today the SACRAMENTO BEE reports that Jerry Brown is proposing we put MASSIVE (“temporary”) tax increases on the California ballot for voter approval in November of 2012. This is a state with among the highest tax rates in the nation.
Included is a half percent sales tax and BIG TIME income tax increases on folks making more than $250K. Hit a million dollar income, you’ll pay 12.3% — up from the current 10.3% — starting in 2012 (the tax will be retroactive).
If passed, California will advance from the third highest income tax state to numero uno. Any sane rich person HAS to be thinking of moving out of the state. We ALREADY have the highest state sales tax.
About three years ago, Maryland raised its millionaires income tax. The following year, one out of every eight millionaires no longer filed Maryland income tax forms. A few died – the rest left. The net Maryland tax revenue from millionaires declined – and the state economy suffered from the loss of the big spenders. And the Maryland tax increase was only a FRACTION of the huge percentage increase being proposed by Governor Brown.
Madness. But the good news is that I suspect we’ll be able to fight off the taxes. California voters rejected seven of the last eight statewide props to impose higher taxes. Six of the seven failed by double digits.
BTW – remember the complaint that Prop 13 keeps taxes from going up without a 2/3 majority? Not true. State prop tax increases can be imposed with a simple majority vote.
It’s going to be a huge battle.
For those who still think we Californians are undertaxed, I include below my latest revised “Breaking Bad” fact sheet. Read it and weep.
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Breaking Bad: California vs. the Other States
by Richard Rider, Chairman, San Diego Tax Fighters
Version 1.792 Revised: 26 November, 2011
Updated version online at: http://open.salon.com/blog/Richard_Rider
Email: RRider@san.rr.com
Phone: 858-530-3027
Facebook blog page: www.Facebook.com/Richard.Rider
Here’s a depressing but documented comparison of California taxes and economic climate with the rest of the states. The news is breaking bad, and getting worse (twice a month, I update crucial data on this fact sheet):
California has the 3rd worst state income tax in the nation. 9.3% tax bracket starts at $46,766 for people filing as individuals. 10.3% tax starts at $1,000,000. http://www.taxfoundation.org/files/bp59_es.pdf
Highest state sales tax rate in the nation. 7.25% (as of 1 July – does not include local sales taxes)
http://www.taxfoundation.org/files/bp60.pdf Table #15
California corporate income tax rate (8.84%) is the highest west of the Mississippi (our economic competitors) except for Alaska.
http://www.taxfoundation.org/files/bp59.pdf Table #8 – we are 8th highest nationwide.
Fourth highest capital gains tax 9.3%
http://www.thereibrain.com/realestate-blog/capital-gains-tax-rates-state-by-state/109/
UPDATE: CA has the 2nd highest gas tax (averaging 67.5 cents/gallon) in the nation (October, 2011). Nat’l average 48.8 cents.
http://www.api.org/statistics/fueltaxes/ (also CA has the highest diesel tax – 76.5 cents/gallon. Nat’l average 53.9 cents)
California is ranked 14th highest in per capita property taxes (including commercial) – the only major tax where we are not in the worst ten states. But CA property taxes per owner-occupied home were the 10th highest in the nation in 2009.
http://www.taxfoundation.org/taxdata/show/251.html and
http://www.taxfoundation.org/taxdata/show/1913.html
CA has now instituted the highest “cap and trade” tax in the nation – indeed, the ONLY such U.S. tax. One study estimates the annual cost at $3,857 per household by 2020. Even proponents concede that it will have zero impact on global warming.
http://WSJ-CA-cap-and-trade.notlong.com
California’s 2011 “Tax Freedom Day” (the day the average taxpayer stops working for government and starts working for himself) is the 6th worst date in the nation – up from 28th worst in 1994, but down from 4th worst in 2009. CA “improved” only because of our state’s soaring unemployment rate – the new tax dodge!
http://www.taxfoundation.org/research/show/387.html
UPDATE: CA has the 2nd highest state unemployment rate. (October, 2011) – 11.7%. National unemployment rate 9.0%. National unemployment rate not including CA is only 8.63%, making the CA unemployment rate 35.6% higher than the other 49 states.
http://www.bls.gov/lau/
CA needlessly licenses more occupations than any state – 177. Second worst state is Connecticut at 155. The average for the states is 92.
http://cssrc.us/publications.aspx?id=7707
California’s 2011 Business Tax Climate ranks 2nd worst in the nation – close behind New York state.
http://www.taxfoundation.org/news/show/26806.html
For the 2007-08 school year, the Los Angeles Unified School District spent $29,780 per student. The district also has the country’s second lowest graduation rate of 40.6%.
CA public school teachers the highest paid in the nation. CA students rank 48th in math achievement, 49th in reading.
http://www.lao.ca.gov/reports/2011/calfacts/calfacts_010511.aspx page 36
1 in 5 in Los Angeles County receiving public aid.
http://www.latimes.com/news/local/la-me-welfare22-2009feb22,0,4377048.story
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 7 states combined. Unlike other states, this “temporary” assistance becomes much more permanent in CA.
http://weblog.signonsandiego.com/weblogs/afb/archives/034662.html
California prison guards highest paid in the nation.
http://www.caltax.org/caltaxletter/2008/101708_fraud1.htm
For every dollar California pays to D.C., we get back 78 cents. We rank 7th worst.
http://www.taxfoundation.org/research/show/266.html
California is the worst ranked state for tax administration – another anti-business factor.
http://www.sacbee.com/static/weblogs/capitolalertlatest/2010/03/cal-rated-worst.html
California now has the lowest bond ratings of any state, edging out Louisiana.
http://tinyurl.com/CA-worst-bond-rating
California has the 6th highest (worst) state per capita debt. Not counted is local government debt.
http://www.huffingtonpost.com/2011/10/24/states-debt-combined-may-exceed-4-trillion_n_1029162.html
The American Tort Reform Association ranks CA the worst state “judicial hellhole” – extremely anti-business.
http://tinyurl.com/CA-worst-judicial-state
California is tied with 3 other states (Hawaii, Texas(!) and Florida) for having by far the least competitive property & casualty insurance markets.
http://heartland.org/policy-documents/heartland-institute-releases-new-property-casualty-insurance-report-card
California has a nasty $800 minimum corporate income tax, even if no profit is earned, and even for many nonprofits. Next highest state is Oregon at $150. A few others under $100, with most at zero.
http://tinyurl.com/CA-800-tax
America’s top 500 CEO’s rank California “the worst state in which to do business” for the 7th straight year (May, 2011).
http://chiefexecutive.net/best-worst-states-for-business (It’s worth reading the short article, and especially the part about California.)
California, a destitute state, still gives away college education at fire sale prices. Our community college tuition is the lowest in the nation. How low? Nationwide, the average community college tuition is about three times higher than California CC’s.
http://www.hecb.wa.gov/research/issues/documents/TuitionandFees2009-10Report-Final.pdf Chart 5 on page 8
This ridiculously low tuition devalues education to students – resulting in a 30+% drop rate for class completion. In addition, 2/3 of California CC students pay no net tuition at all – either filling out a simple unverified “hardship” form that exempts them from any tuition payment, or receiving grants and tax credits for their full tuition.
http://tinyurl.com/ygqz9ls
On top of that, California offers thousands of absolutely free adult continuing education classes – a sop to the upper middle class. In San Diego, over 1,400 classes for everything from baking pastries to ballroom dancing are offered totally at taxpayer expense.
http://www.sdce.edu
Protests about increased UC student fees too often ignore one crucial point — all poor and most middle class students don’t pay the “fees” (our state’s euphemism for tuition). There are no fees for California families with under $80K income. Moreover, Pell Grants and federal tuition tax credits covered the total 2009-10 fee increases for nearly 3/4 of all undergraduates with household incomes below $180K.
http://www.universityofcalifornia.edu/blueandgold/ and
http://www.universityofcalifornia.edu/news/article/22415
California residential electricity costs an average of 32.4% more than the national average (far higher in San Diego County). For industrial use, CA electricity is 70.8% higher than the national average (May, 2011).
http://www.eia.doe.gov/cneaf/electricity/epm/table5_6_a.html
From 2007 through 2010, 10,763 industrial facilities were built or expanded across the country — but only 176 of those were in CA. So with roughly 12% of the nation’s population, CA got 1.6% of the built or expanded industrial facilities.
http://podcasts.odiogo.com/city-journal/podcasts-xml.php California Manufacturers and Technology Association podcast
California is now ranked as the 2nd worst state to retire in. Only basket-case Illinois is worse. We “beat” NY, RI and NJ.
http://www.topretirements.com/blog/great-towns/our-worst-states-to-retire-list.html/
Consider California’s net domestic migration (migration between states). From April, 2000 through June, 2008 (8 years, 2 months) California has lost a NET 1.4 million people. The cumulative net annual income lost from this 8 year out-migration comes to about $26 billion. Net departures slowed in 2008 only because people couldn’t sell their homes. In 2010 we lost “only” 72,000 net people to domestic migration. Again, note that this is NET loss.
http://www.mdp.state.md.us/msdc/Pop_estimate/Estimate_08/table5.pdf and
http://tinyurl.com/2010-CA-lost-72000 and
http://interactive.taxfoundation.org/migration/
These are not welfare kings and queens departing. They are the young, the educated, the productive, the ambitious, the wealthy (such as Tiger Woods) – and retirees seeking to make their pensions provide more bang for the buck. Too often these departing seniors are retired state and local government employees fleeing the state that provides them with their opulent pensions – in order to avoid the high taxes that these same employees pushed so hard through their unions. And once they move out of California, our state can no longer tax their California-paid pensions.
As taxes rise and jobs disappear, we lose our tax base, continuing California’s state and local fiscal death spiral. This downward spiral must stop NOW.
NOTE: To see the latest version of this “Breaking Bad” column, plus other taxpayer items of interest, go to my blog at http://open.salon.com/blog/Richard_Rider, or my more active Facebook www.Facebook.com/Richard.Rider. This fact sheet also is available free upon request as a 2 page Word file for printing.
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