Crush Liberalism

Liberalism: Why think when you can “feel”?

Economics 101 for blue states

Two of the bluest states in the union, CA nd NY, have huge budget deficits and plan on addressing them by raising taxes.  Not the best approach, to say the least.  From WSJ:

Anyone who thinks the path to “fiscal discipline” is through higher taxes ought to look at the current budget spectacles in New York and California. The two liberal states have among the highest tax burdens in the country, yet both now find themselves with huge budget deficits and are debating still higher taxes to close the gap.

California has the highest state income tax rate in the country (10.3%), while New York State also has a high income tax rate (6.85%), with the combined state and city rate rising to 10.5% in New York City. Their overall government spending totals also happen to top the national charts. And, what do you know, California is $15 billion in the red this year while New York is trying to close a $6.4 billion 2009 budget hole, which budget expert E.J. McMahon of the Manhattan Institute expects to grow to $26 billion over three years.

California hasn’t even passed a budget yet, many weeks into the fiscal year. The Democrats in Sacramento have proposed a series of new taxes on businesses and individuals with incomes above $1 million. Their plan would raise the top income tax rate to 12%, which would be the highest in the nation. They would also repeal a tax law allowing businesses to carry forward losses against future profits.

A similar mess is playing out in Albany, where Assembly Democrats and Republicans have passed a budget with two added tax rates. Millionaires would face a one-percentage-point rate income tax hike (to 11.5% in New York City), while anyone making more than $5 million would get hit with another 0.85-point hike (to 12.35% in NYC). A new business tax of 4% would also apply to hedge fund managers.

And what happens to those vile, evil rich when you jack their taxes up even higher to fund the nanny state?  Well, they don’t like it very much…go figure!

The “progressives” who dominate politics in these states target the rich on grounds that they have the ability to pay. They also have the ability to leave. From 1997-2006, New York State lost 409,000 people (not counting foreign immigrants). For every two people who move into the state, three flee. Maybe the problem for New York is merely bad weather, not high taxes.

Except that sunny California is experiencing a similar exodus. Over the past decade 1.32 million more native-born Americans left the Golden State than moved in — despite beaches, mountains and 70-degree weather. Mostly the people who have fled are the successful, the talented and the rich.

I’m sure those numbers are simply inflated due to their large populations, right?  Nope.

If taxes don’t matter, then maybe someone can explain the divergent economic paths of California and New York and America’s two other most populous states, Florida and Texas. The latter two states have no personal income tax. Personal income has been growing about 50% faster in Florida and Texas than in California and New York. (See chart.) This year Texas became the No. 1 state for Fortune 500 corporate headquarters. About a dozen of those 58 corporations once called New York or California home, and taxes are one reason they departed.

Atlas is shrugging in CA and NY, and as long as the economically illiterate rubes continue running those states in the same way, the results will be the same.

Attention, liberals: The numbers don’t lie.

Advertisements

September 15, 2008 - Posted by | big government, California, economic ignorance, Florida, New York, taxes, Texas

4 Comments »

  1. DAMN IT JON
    We here in Texas were trying to keep that quiet to keep the trash out. One bad thing is that the real estate taxes, school taxes and insurance are REDICULOUS. I pay $2500 a yr in house insurance, my brother in Ill pays $600 for a home valued at twice what mine is. My school tax is $3000 and real estate $2000. And they can raise the school tax 5% a yr WITHOUT asking for a vote on it.

    Comment by WMD_Maker | September 15, 2008

  2. The dems are sooooo good at getting people out of poverty

    Commentary: The poverty of Democrats’ ideas for cities

    http://www.cnn.com/2008/POLITICS/08/20/beck.cities/

    Comment by WMD_Maker | September 15, 2008

  3. Tax our way to prosperity? Gee, that’s a new concept from liberals.

    Comment by TheBad | September 15, 2008

  4. It’s not just the high taxes driving people out of California, it’s also the increased nanny-ism of the legislature coupled with the ineffectiveness and waste in the government along with an influx of illegal aliens. Despite the money being thrown at them, public schools here in CA are getting worse and worse. Courts and some juries have become so liberal that it’s increasingly impossible to fight crime. Even with high taxes, basic services are overlooked (like roads, police and fire) in favor of moronic government programs, grants and special interest pandering.

    Comment by JsinGood | September 15, 2008


Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: