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tax heaven

Really interesting article on Cali*fornia. In looking for a new career, I've definitely looked at the Gol*den state. There are LOTS of job opportunities there for a technical person, but the tax code really holds me back. Houses are incredibly expensive, and property taxes are higher than in WA, so if one wanted to own a house, add on the high income tax rates, and you're practically taking a vow of poverty. It was great when I was renting and making 20K a year as a student, and buying almost nothing, but things are different now. Maybe it's just my perception, but I think about tripling the (current, ha ha) value of my house in order to get a modest 3 bed in the Bay Ar*ea, and then adding 70% to the property tax rate, adding 5% state income tax, and keeping the same sales tax rates. Who wants to pay all that tax?

Some interesting quotes:

Total state expenditures have grown to $145 billion in 2008 from $104 billion in 2003 and California now has the worst credit rating in the nation -- worse even than Louisiana's. It also has the nation's fourth highest unemployment rate of 9.3% (after Michigan, Rhode Island and South Carolina) and the second highest home foreclosure rate (after Nevada).

To close the current deficit, the pols in Sacramento are nearing a deal that cuts spending by $15 billion and raises $14.2 billion in higher taxes on income, sales, gasoline and cars. Six years ago Mr. Schwarzenegger helped depose Governor Gray Davis by calling him "Car-taxula." Now he's agreed to double the same tax.

The tax increases will continue to chase even more productive people out of the state. For at least two years, the sales tax would rise by one percentage point to 8.25% and the income tax by 0.3% to a top marginal rate of 10.56%. These will both be the highest statewide rates in the nation (see chart).

Do these taxes hurt business? Ask Hollywood. Film makers are threatening to flee to avoid the state's high costs, so to keep them in Southern California the deal offers $500 million in tax breaks for producers. Rich liberals like Rob Reiner, who love higher taxes on other people, get a sweetheart tax break and everyone else pays more.

In other news, they are blaming the pilot. Maybe he was at fault, but it's obviously easy to blame someone who's not around to defend themself.

11:46 a.m. - Feb. 18, 2009