Skip to comments.Latest Gold Rush Headed in Wrong Direction
Posted on 04/01/2006 3:37:59 PM PST by Signalman
There are some among us who seem hell-bent determined to destroy what's left of California's eggshell economy.
This group of meatheads insists on attaching state tax increases to any cause it finds attractive. One such group is led by Rob Reiner of "Meathead" fame in the 1970s sitcom "All in the Family."
Reiner has led a group of Hollywood liberals whose sole purpose in life is to raise our taxes. In the 1990s, he helped to pass a 50-cent-per-pack increase in the state's tobacco tax, ostensibly to pay for children's healthcare. Last year, he sponsored a ballot initiative that imposed a one-point income tax surcharge to pay for mental-health subsidies.
Now, Reiner and his friends have put an initiative on the June ballot that would add a 1.7 percent increase on incomes over $400,000, with the money to go to fund universal preschool. All of these efforts seem well-meant, but the collective results spell disaster.
What's happening is a tax and regulatory culture that is being exploited by every group with a pet cause. The victim is California's economy. California's corporate income tax rate at a flat 8.84 percent is the highest corporate tax rate in the West. This is a clear deterrent against business moving into California and a clear incentive for business to move out. Add to that the fact that California's general sales and use tax rate is 6.25 percent, well above the national median of 5 percent.
On the Tax Foundation's chart of business tax climate, California ranks 40th among 50. Our neighbors are much more attractive: Washington, 13th; Oregon, 10th; Arizona, 25th, and Nevada 5th. Our steeply progressive personal income tax has an effective top rate of 10.3 percent, second highest in the nation. Add to that, tax renegades like Reiner, who are determined to drive business and industry out of California.
Reiner's abuse of the initiative process is an end run around legislative responsibility. The wise use of government revenue is exactly what we expect out of our elected assemblymen. We handsomely pay our lawmakers to equitably allocate our state revenues, and to raise, or lower, taxes in a manner that helps the state's economy.
The liberals use their pockets of personal wealth to promote special causes and to tax the rest of us to pay for them. Their goal is to tax and regulate us into becoming a socialist society. Unfortunately, they are succeeding.
California is now second only to New York among states with the highest marginal income-tax rate. Reiner's role in the passage of the 1998 Proposition 10 smokes-to-school initiative carried enough momentum for his appointment as chairman of the California Children and Families Commission that has a leadership role in disbursing some $770 million in annual tobacco tax revenues.
Raising tax rates even more is absolutely the wrong answer. Time after time we have found that raising tax rates diminishes total tax revenue. According to the Census Bureau, during 2005, 239,416 more native-born Americans left California than moved in. And figures from the state finance office show the number of Californians reporting million-dollar incomes fell from 44,000 in year 2000 to 25,000 just three years later. And these fleeing rich guys have taken with them $9 billion a year in what would otherwise be tax revenue.
The upcoming June primary initiative now proposes another tax increase, this one aimed at incomes in excess of $400,000. If Reiner's proposal succeeds in driving even more wealthy taxpayers out of the state, you and I will be left to fund the deficit.
If anyone believes that this debate is just political rhetoric, I suggest a simple test. Pull up U-Haul on your computer and compare rates to and from any U.S. location you choose.
For example, as of Wednesday, the rate for a 26-foot, four-to-five bedroom capacity truck one-way from Simi Valley to Des Moines, Iowa, is $2,756. That exact same truck headed into California instead of out, from Des Moines to Simi Valley, is $1,995.
Take that same truck size headed for Houston North, Texas. The rate from Simi Valley to Texas is $3,221 The rate from Texas to Southern California is only $1,225. U-Haul says that the higher east-bound rates are a direct reflection of demand.
Who are you going to believe, Meathead or U-Haul?
May I suggest move to Florida?
Once a meathead, always a meathead.
California, the next France.
Interesting...U-Haul is charging TWICE as much for trucks headed south from New England as they are from south to north. What a surprise.
Exactly -- those folks in Ventura get the picture.
I think most of the southbound trucks are out on Interstate 75 through Atlanta. I-75 is just buried in traffic, including lots of rental trucks.
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