The Self-Inflicted Economic Wound

Citizens typically put up more of a fight regarding taxes when they see a government in a fiscal crisis which has been self-inflicted over time. In California, for example, the state is pictured next to the dictionary definition of “how not to operate a state.” Liberal politicians pushing liberal policies of excessive taxation and excessive deficit spending have left a state, which should be economically robust, in a fiscal hole the likes of which only President Obama could be envious.

All that being said, on Tuesday we witnessed a change in the mindset of California voters who, for the first time in many years, bought the notion that raising taxes on the wealthiest, most productive citizens in the state will help bring the state into solvency. Proposition 30 in California temporarily increases sales tax for everyone by a quarter cent and raises income taxes for those making over $250,000. In other words, it is the “millionaires tax.” The sales tax may seem trivial but the income taxes on the upper tax brackets are a glaring acknowledgment of failed decades-old liberal policies.

Fifty-four percent of Californians were convinced that the economic woes in their state can be solved by siphoning more money from the private economy and pouring it down the economic rat hole that is the state budget. Liberal politicians, and the low-information voters on which they prey, are convinced in their soul that the issues facing California have nothing to do with the state’s lavish social programs or inability to cut even a dime from any budgetary item on the state’s ledger. However, that won’t stop them from selling the notion.

Taxing higher earners in California does nothing to address the numbers on the other side of the equation. Is there anyone with reasonable mental capacity who will argue that the state’s budget problems arose from a tax burden which was too low? Some will argue that and when they do, you know which side of the problem on which they stand on.

Though I do not reside in California and have made it a life goal to stay at least 100 miles away from the border at all times, I believe the state serves as a model from which other states can learn valuable lessons. Perhaps, and I know this is silly, even the federal government could take a peak at the west coast and learn a thing or two.

The vote in California to pass proposition 30 is just one example from the 2012 election where enough voters were convinced that the answer to their fiscal situation lies with wealth redistribution. The guise of proposition 30 was to prevent cuts in education funding which is always the route which liberals use to peddle more taxing and more spending.

If voters are convinced that voting against a proposal will make their children stupid, their inclined to vote for it. Never mind that perhaps too many people voted for earlier proposals that purported to save education which might be the reason the present day voters are so easily swayed and lack basic critical thinking skills.

As a result, California is becoming less and less inviting for anyone with a high earning potential. States like Texas, Florida and Arizona are reaping the benefits of California’s continuing failure.

Once the upper tax brackets leave and take their wealth with them, who will be left to blame for California’s failed policies? Two words: state bailout.

  • JD McAfoose

    There is no doubt that California has created a fiscal issue in their state but so do a lot of states. I also do think Texas was quite brilliant when it passed into law the the requirement for the state but, none the less, we (Texas) had a $6.6 billion shortfall for its 2010-2011 fiscal years.

    Ironically, nearly all of the deficit was covered with $6.4 billion in Recovery Act money (from Washington). Which many of we Texans criticized Rick Perry for since we have a $9.1 billion rainy day fund.

    By the Way the Rainy Day fund was passed in 1988 with a Texas congress made up of State house (63% Democrats) and Senate (81% Democrats).

    Again, pointing that Democrats can also have secure fiscal policies. Much of Texas fiscal legislation has been in place for decades… back when it was a blue state and that Texas required 6.4 billion of federal aid in the past two fiscal years.

  • JD McAfoose

    Wish I could edit… I meant to say “Texas was quite brilliant when it passed the requirement for the state to balance it’s budget”

    Also, “that Texas required 6.4 billion of federal aid in the past two fiscal years so we (Texas) needed federal help. So instead of asking our citizens to help we had the entire American population chip in to solve our budget crisis.”

    Texas may not be that great of a model

  • California is by far in the absolute worst situation with no shot of making a positive change now without a federal bailout. Politicians failed, citizens failed in electing the same politicians, talent leaving the state, etc.. California is looking at Texas and New York thinking “gee, that’d be nice”.

    As of August, 2012, just for perspective:

    At $617.6 billion, California had by far the biggest total debt, more than twice the total of No. 2, New York, with $300.1 billion owed, according to State Budget Solutions, a research and non-partisan advocacy group.

    Texas, with $287 billion owed, New Jersey, with $282.4 billion, and Illinois, with $271.1 billion, ranked next among states with the biggest total debt, according to State Budget Solutions.

    http://www.huffingtonpost.com/2012/08/28/state-debt-report_n_1836603.html

  • Bill Hedges

    Nate I would GUESS “Texas, with $287 billion owed” IS SMALLER % of Texas revenue than say “New Jersey, with $282.4 billion”. If true, Texas is in better shape. Texas could always start taxing REAL FOOD.

    I read article on CA financial woe recently. They are losing rich tax base because of high taxes. Their notion was flat rate under consideration because raising tax on rich would further un-stabilize that revenue base.

    The non-recalled Republican Gov. of WI had a different plan. Last I checked debt was going down & jobs migrating into WI away from toxic IL. and elsewhere.

    Arnold had his muscles in Charley horses fighting STRONG unions. If bum still has some of his share of stimulus money left he may have to give to CA himself. A total bail-out by House is unlikely even with major, major concessions by unions and demos in my opinion.

    We have no money & no way to raise living within liberal standards. Opening up carbon energy plentiful resources & relaxing EPA regulations is pipe dream. NO JOBS coming their now nor revenue for government…

    JD McAfoose

    I would like link on your numbers when you wrote “Rainy Day fund was passed in 1988 with a Texas congress made up of State house (63% Democrats) and Senate (81% Democrats)” to verify and see how it developed. Is not standard working behavior for Demos without good reason.

    What States DID NOT get federal aid ? Any Demo Sates ? And how much ?

    With demos refusing to heed Bush’s warnings concerning recession AND NEED FOR BANKING REGULATIONS, all States were HIT HAR

  • Bill Hedges

    JD McAfoose _ I DO MY RESEARCH… Especially when it sounds TOO FISHY… YOU wrote “Ironically, nearly all of the deficit was covered with $6.4 billion in Recovery Act money (from Washington). Which many of we Texans criticized Rick Perry for since we have a $9.1 billion rainy day fund.”

    By ommission of pertinent information (( and MORE )) you tried to make it appear “RAINEY DAY FUND” was done by majority of demos in Texas legislator. I CALL it a LIE:

    “Rainy Day Fund”

    “HJR 2, 70th R.S. 1987 proposed the creation of the Economic Stabilization (“Rainy Day”) Fund. The constitutional amendment was approved by Texas voters on November 8, 1988”

    http://www.lrl.state.tx.us/whatsNew/client/index.cfm/2011/2/28/FAQs-about-the-Economic-Stabilization-Rainy-Day-Fund

  • Bill Hedges

    CORRECETION

    not “Ironically, nearly all of the deficit was covered with $6.4 billion in Recovery Act money (from Washington). Which many of we Texans criticized Rick Perry for since we have a $9.1 billion rainy day fund.”

    Replace with

    “By the Way the Rainy Day fund was passed in 1988 with a Texas congress made up of State house (63% Democrats) and Senate (81% Democrats”

  • JD McAfoose

    Bill, since you are the researcher you say you are… I recommend you look up Texas’s 70th legislative session which passed the rainy day fund. Please do not try and school me on my own state’s politics and history unless you have done your homework.

    The point is that there are liberals who believe in valences budgets and good focal policies. None the less, Texas may preach independence and that we have the best state but we have the same problems and have relied on the aid of our federal government.

  • Bill Hedges

    Nothing to disprove what I wrote…

    “Rainy Day Fund” A constitutional Amendment NOT a legislative bill

    “HJR 2, 70th R.S. 1987 proposed the creation of the Economic Stabilization (“Rainy Day”) Fund. The constitutional amendment was approved by Texas voters on November 8, 1988”

    Already gave link above.

    Voters passed. NOT DEMO CONTROLLED LEGISLATIION. You left that OUT.

    I did “school you”. YOU DID NOT MENTION IN YOUR COMMENT

    AS I recently said *** By ommission of pertinent information (( and MORE )) you tried to make it appear “RAINEY DAY FUND” was done by majority of demos in Texas legislator. I CALL it a LIE***

    From around 1986 Gov of Texas has been Republican except for the GREAT LADY Ann Richards.

    REAL POINT is YOU *** By ommission of pertinent information (( and MORE )) you tried to make it appear “RAINEY DAY FUND” was done by majority of demos in Texas legislator. I CALL it a LIE*** which you do not disprove.

    I won’t do your research unless I have a $$$ retainer…

  • Bill Hedges

    JD McAfoose YOU could of just admitted you error…

    Look what showed up on my computer sceen. Proof Texas Raining Day Fund was voted on 11/08/1988. Adopted by about 927,131.

    “JD McAfoose Nov 8th, 2012 at 9:15 pm” wtote “Bill, since you are the researcher you say you are… I recommend you look up Texas’s 70th legislative session which passed the rainy day fund”

    ******************* LIAR ********************

    Votes for: 2,457,703
    Votes against: 1,530,572

    “ HJR 2, 70th Regular Session

    Proposing a constitutional amendment relating to the establishment of an economic stabilization fund in the state treasury.

    PropositionProp. 2 – The constitutional amendment establishing an economic stabilization fund in the state treasury to be used to offset unforeseen shortfalls in revenue.

    Outcome: Adopted

    Election date: 11/08/1988

    Votes for: 2,457,703
    Votes against: 1,530,572

    Enabling legislation No enabling legislation required.

    Articles affected Article 3 : Adds §-g

    Note(s)
    Election date amended by S.J.R. 5, 70th Legislature – 2nd C.S.

    Analyses of proposed amendments:
    House Research Organization Amendments Proposed for the November 8, 1988 election.
    Texas Legislative Council Analyses of Proposed Constitutional Amendments for the November 8, 1988 election.

    Effective dates
    Unless otherwise specified, an amendment takes effect as part of the constitution on the date of the official canvass of election returns showing adoption of the amendment.

    The Legislative Archive System is a work in progress. Complete information is not available for all bills and all sessions. Visit the Legislative Archive System status page for details. Please contact the Legislative Reference Library at 512-463-1252 if you have any questions. Information on this website is provided as a public service by the Legislative Reference Library. The Legislative Reference Library makes no representation as to its completeness or accuracy and makes no warranty in regard to its use. Users assume all risk of reliance on the information included on this site. ”

    http://www.lrl.state.tx.us/legis/billSearch/amendmentdetails.cfm?legSession=70-0&billtypeDetail=HJR&billNumberDetail=2&amendmentID=459

  • Bill Hedges

    I admit my mistakes…

    Not “…just admitted you error…”. Change to “your”

    I feel much better…