August 24, 2016
The Julian News 13
California Commentary
Chickens Coming Home to Roost
by Jon Coupal
State Controller Betty Yee's
just-released July Cash Report
shows state personal income tax
revenue falling behind estimates
by 6.9 percent, or $323 million
lower than projections. While
some will argue that one month
does not make a trend, these
figures are significant because
they represent revenue in the first
month of the new state budget,
a budget that is based on much
higher income estimates.
Should these below projection
income tax revenues really be a
surprise to anyone with even a
minimal understanding of basic
economics? Economists tell us
that if you want less of something,
tax it more, and California has
the highest marginal income tax
rates in all 50 states.
When upper income individuals
were slammed with tax rates on
steroids as a result of Proposition
30, approved by voters in 2012,
they had little immediate choice
but to pay, and the tax revenue
poured in. (It should be noted that
the tax, approved in November,
was retroactive, for the entirety
of 2012 so there was an almost
instantaneous infusion of cash
into state coffers.) Still, many
compelled to pay these higher
taxes took some comfort in
knowing the exorbitant tax rates
were scheduled to end in 2018.
However, lawmakers viewed
this extra revenue as the new
normal and they partied on in
Sacramento with ever higher
state budgets -- they have
increased spending by 42
percent in the last five years and
there is no end to the spending
spree in sight.
While the Sacramento
politicians are loath to give up
this additional cash next year as
scheduled, the report from the
Controller's Office shows that the
negative consequences of higher
taxes, like proverbial chickens,
are coming home to roost. Most
high income individuals are
savvy and, given time, those
penalized with a confiscatory
level of taxation will respond by
using legal methods that allow
them to keep more of their own
money. I personally know a
veterinarian who cut his salary
while retaining the unpaid wages
in the business, a small animal
hospital, he owns.
Sadly, over time, other
successful individuals have
packed up and left the state. This
helps to explain the exodus of
businesses, and the jobs they
create, to other areas of the
country with a more attractive tax
climate.
A recently released study by
Spectrum Locations Solutions
estimates that over the last seven
years, 9,000 business have either
divested in California, or, while
maintaining their headquarters
here, have chosen to expand
elsewhere. "Gov. Jerry Brown's
office routinely denies that
business departures is a serious
issue," says Joseph Vranich, a
site selection consultant, who
prepared the report. Brown's
denials are consistent with State
Senate and Assembly leaders
who see no down side to ever
higher taxes.
Of course those businesses
leaving the state are not just
fleeing higher income taxes,
high taxes in almost every other
category are a factor, as are the
costs of suffocating regulations.
But for those paying the ultra-
high income tax rates, no relief
is in sight. California government
employee unions, who represent
the highest paid public workers in
all 50 states, are fielding a ballot
measure - Proposition 55 - that
will extend the Proposition 30 tax
increases for another 13 years.
There is little doubt that just the
threat of extending these hyper
income taxes, will spur more high
earners, to depart. If Proposition
55 passes this November,
there will be consequences for
the California taxpayers who
remain. When Sacramento runs
out of higher income individuals
to tax, they are certain to shift
their attention to those of more
modest means.
Jon Coupal is president of
the Howard Jarvis Taxpayers
Association -- California's largest
grass-roots taxpayer organization,
dedicated to the pt'6tection of
Proposition 13 and the advancement
of taxpayers' rights.
Curios ity...endows the people who have it with a generosity in argument and
a serenity in cheerful willingness to let life take the form it will.
-- Alistair Cooke
R.F.D. by Mike Marland
by Linda Thistle
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DIFFICULTY THIS WEEK: •
• Moderate •• Challenging
• • • HOO BOY[
© 2016 King Features Synd., Inc.
HOMES o LAND. RENTALS o PROPERTY MANAGEMENT. VACATION RENTALS
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3 Bedroom, 2 Bath Home
with granny fiat
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The average American spends
two years of his or her life waiting
for meals to be served.
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BUT TRUE
• It was English Victorian author Samuel Butler who made the
following sage observation: "Words are like money; there is nothing
so useless, unless when in actual use."
• Martha Jane Canary -- better known as Calamity Jane -- was a
noted frontierswoman in the late 19th century. She defied expectations
of women by refusing to wear dresses, becoming a scout and fighting
against Indians in the West. As one contemporary commenter
observed, "She swore, she drank, she wore men's clothing. She was
50 years ahead of her time."
• Those who study such things say that two-thirds of a shark's brain
is dedicated to detecting and
Crossword sorting out odors.
• In his 1510 book "The
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Adventures of Esplandian,"
Spanish author Garci Rodriguez
de Montalvo wrote of an island
peopled entirely by Amazon-
like women, and he called it
California. When Spaniard
Francisco de UIIoa was exploring
the west coast of North America,
his initial surveys of the Baja
Peninsula led him to believe
the land was an island, so the
region was given the name of the
mythical place: California.
• In Mongolia, it's common
to put salt in one's tea before
drinking it.
• If you're a fan of nature
documentaries, you've doubtless
seen footage of Africa's
Serengeti, site of the world's
largest terrestrial mammal
migration. If you've see images of
the place, you won't be surprised
to learn that in Maasai, the word
"Serengeti" means "the place
where the land runs on forever."
• You've probably heard of
John Steinbeck's celebrated
novel "Of Mice and Men," but you
probably didn't know that it was
almost titled "Something That
Happened."
Thought for the Day: "Do you
wish the world were happy? /
Then remember day by day, /
Just to scatter seeds of kindness
/As you pass along the way." --
Ella Wheeler Wilcox
© 2016 King Features Synd., Inc.
® 2016 King Features Syndicate, Inc.
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