California as a Guide to Understanding the New America

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To understand the new political/economic impact on America just look at California, where the same political/economic process has been in place and growing for decades.

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California as a Guide to Understanding the New America

  1. 1. California as a Guide to Understanding the New AmericaTo understand what to expect from the current political/economic direction of the UnitedStates, just take a look at California, where thesamephilosophy has been in placeandgrowing for decades.Here are some samples of the results, and signs of what to expect nationally. Worst state income tax in the nation. The governors of other states are openly coming to California and encouraging businesses to leave for states with lower taxes, less regulation& interference, and business-friendlier climates. Highest state sales tax rate in the nation: 7.25% (does not include local sales taxes). Corporate income tax rate (8.84%) is the highest west of the Mississippi (our economic competitors) except for Alaska. 8th highest nationwide.40% pay no income tax. Highest gas tax (tied with NY) in the nation at 67.7 cents/gallon National average is 48.9 cents. 5th highest diesel tax in the nation – 71.9 cents/gallon. (National average 53.8 cents) Ranked 15th highest in per capita property taxes (including commercial) in 2009 – the only major tax where California is not in the worst ten states. But CA property taxes per owner-occupied home were the 10th highest in the nation in 2009. (2009 latest year available). Instituted the highest ―cap and trade‖ tax in the nation – indeed, the ONLY such U.S. tax. One study estimates the annual cost at $3,857 per household by 2020. Even proponents concede that it will have zero impact on global warming. Licenses more occupations than any state – 177. Second worst state is Connecticut at 155. The average for the states is 92. (Of course, there are license fees involved). 2012 Business Tax Climate ranks 3rd worst in the nation – behind New Jersey and New York state. Public school teachers are highest paid in the nation. Students rank 48th in math achievement, 49th in reading. (Who says higher pay equates to superior performance?). One in Five in Los Angeles County receive public aid. 12% of the nation’s population, with 33% of the country’s TANF (―Temporary‖ Assistance for Needy Families) welfare recipients – more than the next 7 states combined. Unlike other states, this ―temporary‖ assistance becomes much more permanent in CA. For every dollar California pays to D.C., they get back 78 cents; ranking 7th worst. Worst ranked state for tax administration – another anti-business factor. The total of U.S. state debt, including pension liabilities, could surpass $4 trillion, with California owing the most ($27.8 billion). Worst state ―judicial hellhole‖ – extremely anti-business; per the American Tort Reform Association. Incredibly high tickets. Red-light camera ticket $480. Next highest state is $250. Most are around $100. Tied with 3 other states (Hawaii, Texas, and Florida) for having by far the least competitive property & casualty insurance markets.
  2. 2. Has a anti-small business $800 minimum corporate income tax, even if no profit isearned, and even for many nonprofits. Next highest state is Oregon at $150. A fewothers under $100, with most at zero.California small businesses failed in 2011 at a rate 69% higher than the national average- the worst state in the nation (based on Dunn & Bradstreet study).America’s top 650 CEO’s rank California ―the worst state in which to do business‖ forthe 8th straight year (May, 2012).California, a destitute state, still gives away college education at fire saleprices. Community college tuition is the lowest in the nation. How low? Nationwide, theaverage community college tuition is about three times higher than California CC’s. Thisridiculously low tuition devalues education to students – resulting in a 30+% drop ratefor class completion. In addition, 2/3 of California CC students pay no net tuition at all –either filling out a simple unverified ―hardship‖ form that exempts them from any tuitionpayment, or receiving grants and tax credits for their full tuition. On top of that,California offers thousands of absolutely free adult continuing education classes – a sopto the upper middle class. In San Diego, about 1,000 classes for everything from bakingpastries to ballroom dancing are offered totally at taxpayer expense. Protests aboutincreased UC student fees too often ignore one crucial point – all poor and many middleclass students don’t pay the ―fees‖ (our state’s euphemism for tuition). There are nofees for California families with under $80K income. Moreover, Pell Grants and federaltuition tax credits covered the total 2009-10 fee increases for nearly 3/4 of allundergraduates with household incomes below $180K.Residential electricity costs an average of 29.2% more than the national average(significantly higher in San Diego and Orange counties). For industrial use, CAelectricity is 59.8% higher than the national average (average for 2011).From 2007 through 2010, 10,763 industrial facilities were built or expanded across thecountry - but only 176 of those were in CA. So with roughly 12% of the nation’spopulation, CA got 1.6% of the built or expanded industrial facilities.Ranked as the 2nd worst state to retire in. Only Illinois is worse.From 2000 through 2009, California lost a NET 1.5 million people. Net departuresslowed in 2008 only because people couldn’t sell their homes. But more people stillleave each year — in 2011 California lost 66,000 net people to domestic out-migration. Again, note that this is NET loss. These are not welfare kings and queensdeparting. They are the young, the educated, the productive, the ambitious, thewealthy (such as Tiger Woods) – and retirees seeking to make their pensions providemore bang for the buck. Too often these departing seniors are retired state and localgovernment employees fleeing the state that provides them with their opulent pensions– in order to avoid the high taxes that these same employees pushed so hard forthrough their unions. And once they move out of California, our state can no longer taxtheir California-paid pensions. The departure rate will increase now that Prop 30 hasbeen passed.Ranked as the ―worst-run state‖ in new Wall St. analysis. CA ―won‖ last year too.Worst state to do business (multiple polls, multiple years).Approximately 6% (6 per 100) of California workers work for the state.
  3. 3. California public employees earned the most of the 12 most populous states in 2011 for almost every type of compensation including wages, overtime, extra duty, and one-time lump sum payments; and had the most state employees of the 12 most populous states. Largest population of illegal immigrants in the nation. Massive budget deficits for most of the past decade (per 2011-2012 Governor’s Budget Report).Of course, the Federal Reserve’s ability to print money, and the Federal government’s abilityto borrow, gives the national government a tremendously greater ability to deficit-spendand indebt citizens than that of California; so more dramatic impacts can be expected, aswe have observed and continue to observe.

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