1. IIRC, many folks sold issues at a profit, before cap gains tax increased. So there are some time-limited proceeds from this.
2. Higher tax rates on millionaires brought in more money, only because it takes a while for the 1 percenters to sell and move.
3. and I think I read that the chinese are buying property here in the once-golden state (please correct if I'm in error), so there is a stimulatory effect from that.
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From what I have read, I believe you are absolutely correct.
Housing prices are recovering at a rapid pace in CA. A point will be reached where it levels off.
When taxes are raised, people alter their behavior to avoid them.
A few years back, Corzine slapped a tax on NJ millionaires and tens of billions of $$$ left the state. Christie vetoed the renewal of the tax and caught heck for it.
If CA doesn’t pay down debt with the surplus, it severely weakens their case when down the road they go to DC with their hands out.