Taxes will be increased (on the "rich", of course) - there is no other possibility. (I still predict a huge estate tax increase, since that will be a way of getting back at the feds since state death taxes are deductible from federal death taxes.) Also look for huge shifting of costs from the state to cities and counties. That's a way to get back at the rural "red zones" - make them suffer or raise local taxes to make up for the cutoff in state funds. And the dems will not get the blame, wall street will..Interesting predictions. It could happen that way, but if it does, I think that will harm the California economic recovery and hence the tax revenue projections. Also, I would suspect that the wealthy would retire to another state to avoid estate taxes. If what you say comes to pass, I think that real estate investment in Nevada will be very attractive short term.
Here in NC, we are going through a pale version of the situation in CA. The dems in charge spent us into a defecit with their usual programs and to solve it, they simply cut off all reimbursements to cities and counties. The people who did this were re-elected
en masse by the liberals in the Eastern (citified) part of the State.
As a result, my local (rural, Republican) county had to raise the sales tax by 1/2 cent just to stay solvent. And we're not talking extravagence here. Our District Courthouse, for instance, is over 100 years old. No oak panelling and padded seats and all that...
As for the death taxes, people want their elderly parents close to them. Many will have to stay in CA nursing homes, rather than move to FL or NV.
Just my prediction...