Posted on 07/08/2013 7:40:52 AM PDT by SeekAndFind
I feel sorry for the people of California. They’re in a state that faces a very bleak future.
And why does the Golden State have a not-so-golden outlook?
Because interest groups have effective control of state and local political systems and they use their power to engage in massive rip-offs of taxpayers. One of the main problems is that there’s a bloated government workforce that gets wildly overcompensated. Here are some staggering examples.
A state nurse getting $331,000 of annual compensation.
A county administrator getting $423,000 pensions.
A state psychiatrist getting $822,000 of annual compensation.
Cops that get $188,000 of annual compensation.
A city manager getting $800,000 of annual compensation.
But overpaid bureaucrats are not the only problem. California politicians are experts at wasting money in other ways, such as the supposedly high-speed rail boondoggle that was supposed to cost $33 billion and now has a price tag of $100 billion.
You may be thinking that I’ve merely provided a handful of anecdotes, so let’s recycle some numbers that I first shared back in 2010.
California state spending has outgrown the state’s tax base by 1.3 percentage points annually for 25 years. Simple arithmetic dictates that in lieu of constant tax increases, this perpetuates a deficit. From 1985 to 2009 state GDP in California grew by 5.5 percent per year, on average (not adjusted for inflation). Annual growth in state spending was 6.8 percent, on average.
In other words, California politicians have routinely violated my Golden Rule for good fiscal policy. And when government grows faster than the productive sector of the economy for an extended period of time, bad things are going to happen.
And those bad things can happen even faster when upper-income taxpayers can leave the state.
Walter Williams sarcastically suggested last year that California barricade the state to prevent emigration, reminiscent of the actions of totalitarian regimes such as East Germany.
But since state politicians fortunately don’t have that power, successful taxpayers can escape, and hundred of thousands of them have “voted with their feet” to flee to states such as Texas.
One recent example is NBA superstar, Dwight Howard, who left the Los Angeles Lakers for the Houston Rockets. There are probably several reasons that he decided to make the switch, but the Wall Street Journal opines on a very big reason why he’ll be happier in Texas. The WSJ starts by looking at Mr. Howard’s two options.
NBA labor agreement…allows the Lakers to offer Mr. Howard $117 million over five years, compared to a maximum of $88 million over four years in Houston.
That looks about even when you look at annual pay, with the Lakers offering $23.4 million per year and the Rockets offering $22 million per year, but there’s another very important factor.
…this picture looks a lot different once the tax man cometh: “Howard would pay nearly $12 million in California tax over the four years if he signs with the Lakers, but only $600,000 in state tax should he sign with Houston. This means that a four-year deal with Houston would actually yield an additional $8 million in after-tax income.” California has the highest top rate for personal income in the nation, while Texas has no state income tax.
Some of you may be thinking this is no big deal. After all, the Lakers will sign somebody to take Dwight Howard’s place and that person will also get a huge salary.
That’s true, though Lakers fans probably aren’t happy that they’re destined to be a middle-of-the-pack team. The bigger point, though, is that there are tens of thousands of other high-paid people who can leave the state and there’s no automatic replacement. And many of them already have escaped.
Including very well-paid Chevron workers.
Now that California’s moochers and looters have imposed an even higher top tax rate of 13.3 percent, expect that exodus to continue. Other pro athletes are looking to escape, and even famous leftists are thinking about fleeing.
In other words, Governor Jerry Brown can impose high tax rates, but he can’t force people to earn income in California. I don’t know whether to call this “the revenge of the Laffer Curve” or “a real life example of Atlas Shrugs,” but I know that California will be a very bleak place in 20 years.
P.S. Here’s the famous joke about California, Texas, and a coyote. And here’s an amusing picture of the California bureaucracy in (in)action.
No way to correct the problem with communists Democrats running the State. Golden State finished.
Don't. I say that as a Californian.
Sometimes people have to learn things the hard way. By experience.
Save yourselves. Nobody is forcing us to stay here.
Born there 1946.
Escaped......1976.
Kaliforniastan-Mexicostan is a self inflicted wound. I could care less what happens to the arrogant bunch of liberal commie fools. To heck with the entire bunch.
Texas wins ... California loses ... again.
I don’t feel sorry for the people of California at all...I was born and raised there...left when I was 20 and never returned.
Even if it does, it's probably much lower than California's. Howard is probably saving tens of thousands of dollars a year in property taxes alone.
“Save yourselves. Nobody is forcing us to stay here.”
Preach it. We are damn aware we sailing on the Titanic, and the difference is I know where the lifeboats are.
I hope we can keep Uncle Sugar from doing so.
Property Taxes are higher in Texas, but the overall price of Housing is lower. More bang for the buck.
Maybe in some areas close to the Oregon border, but otherwise...
8% Sales Tax in Orange County where I live. Highest Gas Tax in the Nation.
We do have the best weather though. Taking care of the old folks and my Job keep me here for the time being.
The Family moved here when I was six years old. Back then it was truly The Golden State, land of Nixon and Reagan.
Might as well have been a thousand years ago.
Even though we live in the Sacramento Valley (where it was 110 degrees or higher every day last week!), we are only two hours from the Pacific, 90 minutes from Lake Tahoe, a couple hours from Mt. Lassen.
I guess an argument can be made that it's a good thing for the rest of the country that we're so messed up here in California.
Otherwise, EVERYONE would live here.
Too bad there's no source for that linked in the article.
I still for sorry for the good people there. It’s hard to point fingers when we’re all in the same boat to some degree, living under Obozo after he was elected and re-elected.
It seems that almost everyone from Mexico will be living there soon. According to this article, whites and Latinos have reached parity in CA, with Latinos poised to become a plurality in the next year.
http://www.sfgate.com/news/article/Whites-Latinos-hit-population-parity-in-Calif-4640801.php
Ditto.
“…this picture looks a lot different once the tax man cometh: “Howard would pay nearly $12 million in California tax over the four years if he signs with the Lakers, but only $600,000 in state tax should he sign with Houston. This means that a four-year deal with Houston would actually yield an additional $8 million in after-tax income.” California has the highest top rate for personal income in the nation, while Texas has no state income tax.”
Not correct, because he would have to pay state income tax in each state he played in as a non-resident. Only half the games are home games in Texas.
I owned a 3k sq foot home in Jersey. Good neighborhood, good school. Property tax 15k.
I moved to Texas in 2006. I own a 3k sq foot home. Good neighborhood, good schools. My property tax is 5k.
My salary is the same.
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