Depending on the day, California taxpayers are on the hook for $25-28 billion of debt, however according to one state watchdog group this number is just the tip of the iceberg.
California Political News reported that the $25 billion figure does not include $10 billion in outstanding lawsuits, $3 billion owed to government schools or the $146 billion owed to the California Teachers’ Retirement System (CalSTRS).
If these numbers don’t resonate with the voters, the Golden State pension funds are destined to collapse the state. Currently California taxpayers pay nearly 25 percent of the teachers’ bloated pension fund for which they are treated to some of the worst schools in the country. Currently, Los Angeles County only graduates 50 percent of its high school students.
“The governor is ignoring that they (teachers’ pensions) need another $4 billion a year, every year, for CalSTRS,” said Marcia Fritz president of California Foundation for Fiscal Responsibility.
While there have been rumblings of revamping the antiquated Internal Revenue Service (IRS) on a national level, financial experts think the time is right for California to lead the way with a flat tax.
“If done right, it would profoundly and positively change the economy in California. A low single-digit rate would unleash creativity,” said Steve Forbes of Forbes Magazine. The genius behind the flat tax is the more you make or spend the more you pay. The added bonus is the flat tax could eliminate special interests and level the playing field for those paying taxes.