Schwarzenegger Calls for Tax Increases, Budget Cuts
Submitted by
CalculatedRisk on Thu, 11/06/2008 - 12:26pm (250 comments)
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Nemo!
The Taxinator!
STOP BEING ECONOMIC GIRLIE MEN!
Sorry, Gray.
ppt to hank: send more ammo
10.25% - does that include the tax rate hike that was just voter approved? Didnt it go up another 1/4 or 1/2%?
"
Tax increases and budget cuts during a recession usually just make the recession worse. My guess is the next stimulus plan from the U.S. government will include some relief for state and local governments. "
From what little I know, this was one issue that delayed recovery from the Great Depression. Federal efforts to get money flowing kept being counteracted by state cutbacks.
But California can't keep going further into debt. Whatever else happens, the budget has to balance.
Wait, I thought the governator was just blasting Obama for his "tax and spend" policies in Ohio last week. So confusing...
Tax increases...CA first...the rest of the Nation to follow!
if he's raising the tax on alcohol, I guess my car is going to have to start sharing
wow, Dow blew through 8700
Tax increases and budget cuts during a recession usually just make the recession worse.
Cheyney is wrong. There are limits to deficits.
At this point, we have bigger worries than the current recession.
Bush: "Generally under normal circumstances I am for the free market...but we are not in normal circumstances...so I am principled until it pays not to be."
The Terminator: "Tax increases are the last thing we should do, especially in a recession....unless of course we have to, and then it's a great idea."
These aren't exact quotes but you get the idea.
It seems that when the going gets tough, the tough change their principles.
Expediency is pissing in your boots to keep your feet warm.
LA County approved Measure R that took them from 8.25% to 8.75%. Arnie is proposing another 1.5% temporary increase at the state level. Temporary Allied forces are still in Japan and Germany.
California should really change its law regarding debt responsibilities for those who default on mortgages.
the market will be opening in a few minutes
Oh, and with the passage of the highish speed sorta choo-choo I fully expect the State's credit rating to be downgraded at least two levels.
Maybe he should cut the prison budget a bit? God forbid nonviolent drug offenders might get released.
Tax increases and budget cuts during a recession usually just make the recession worse.
Yep, that's why you save money and pay off debts during the good times. Just like works for regular folks.
Sadly we have not done that and we may have taken any meaningful stimulus option away from ourselves.
Stimulus is not cheating if you plan ahead and can actually pay for it. But when you're just borrowing more and more that you can't pay back, then the "stimulus" becomes nothing more than another round of lying and cheating.
hey is that ethanol for the cars drinkable? we'll have to rustle a few tank cars to a hidden siding at teotwawki
$24billion Deficit/ 26 million adult pop.
That amounts to $923 per adult capita.
That's like four cases of good Napa chardonnay per person.
peptobismol sunset writes:
hey is that ethanol for the cars drinkable? we'll have to rustle a few tank cars to a hidden siding at teotwawki
No. I recommend home-distillery over outright death.
$24billion Deficit/ 26 million adult pop.
That amounts to $923 per adult capita.
Yeah, but what percentage of the per capita actually pays taxes? Thirty or forty percent?
Of course, the sales tax is about as regressive as it gets, since the lower-income group spends a greater percentage of its income compared to the higher-income groups.
"And he proposed canceling dental insurance for poor adults on the state's MediCal program and lowering subsidies to the aged, blind and disabled. California's welfare subsidies would also be reduced."
Nice.
I don't think general federal tax payers will be eager to bail out California, Massachusetts, or NY state budgets.
Question is does SD, OC, or LA default first...tick tick tick
My vote is on LA.
Can anyone confirm the volume on today's selloff???
My Ameritrade chart is showing that there is significant volume behind the move.
Anyone? Mouse?
The Terminator: "Tax increases are the last thing we should do, especially in a recession....unless of course we have to, and then it's a great idea."
These aren't exact quotes but you get the idea.
It seems that when the going gets tough, the tough change their principles.
At some point you have to deal with reality.
The fundamental question now is if we keep on borrowing and spending does the market for government debt panic and dry up.
If we have a run on government debt then we're in the 8th inning of the credit crisis in a 20 inning game.
CR:This proposal would push the LA sales tax rate to 10.25% - Yikes!
Geez, welcome to my world....Chicago. People without transportation are stuck with 10.25%. Otherwise, people purchase goods outside the city/county limits. This is a forced tax on the poor, elderly, and disabled.
"If it bleeds, we can kill it." Predator
I don't think general federal tax payers will be eager to bail out California, Massachusetts, or NY state budgets.
That didn't stop the bailout.
Plus, these are all solid blue/Obama states.
State bailout here we come.
we look to be going out on the lows
hank's bazooka is very disappointing post election
I wonder if gas will go up in price too?
the sales tax is about as regressive as it gets
At least this should help out Amazon as well as the black market. Unless CA has already figured out how to tax out-of-state online merchants...
O needs to put together a PPT transition team.
"Of course, the sales tax is about as regressive as it gets"
Quite true... but California probably has a higher proportion of illegals who pay no income tax than any other state. On the sales tax, you get everybody.
TJ writes:
I don't think general federal tax payers will be eager to bail out California, Massachusetts, or NY state budgets.
Don't forget Florida/Arizona/Nevada please.
Then add up the % of GDP that these states generate for the US and open the Too Big to Fail play book.
See footnote:
"What taxpayers think is irrelevant".
At some point you have to deal with reality.
The fundamental question now is if we keep on borrowing and spending does the market for government debt panic and dry up.
If we have a run on government debt then we're in the 8th inning of the credit crisis in a 20 inning game.
Jim Rogers was on Booberg recently saying how he's shorting long term treasuries.
Uh oh.
how about rolling back spending to 2005 levels and telling everyone else to suck it up? The budget in 2005 was 77billion, this year it was 103 billion.
Protip: quit increasing spending during shortfalls in revenue.
I don't think general federal tax payers will be eager to bail out California, Massachusetts, or NY state budgets.
Why not - those states are net contributors to the Federal government.
A Republican to raise taxes?
Cordially,
K. Trout
Florida's solution is to keep cutting property taxes. We already don't have a state income tax, so we'll just have to forgo funding our schools.
six minutes to go and minus 5%+ (Dow)
Calif. ought to raise the gas tax instead.
Boy, am I glad I fled to northern Nevada earlier this year!!
No state income tax, less traffic, lower cost of living.
And a sales tax at 6.37%.
God help California!!
The new economy = black markets.
It would be great time to be able to salvage or save the consumer goods being thrown out in the foreclosure process.
Hello internet shopping! Tax = 0 if you buy from cos. w/o in state presence (although you are supposed to own up on your tax return.)
mommy, I'm scared...
Here is 2006 data for state debt per capita
.
The Tax Foundation - State and Local Debt Outstanding Per Capita, Fiscal Year 2006
According to that, MA, NY are in the worse shape.
Here is the revenue per capita.
The Tax Foundation - State Revenues Per Capita, Fiscal Year 2007
Jim Rogers was on Booberg recently saying how he's shorting long term treasuries.
I've finally been converted from being a bond bull. Though I still do take on shorter-term long positions with options.
That said I got out of the junk bond market in late 2006. So I tend to be overly-reactive/too early/totally wrong.
I wonder how long before Arnie gets the Gray Davis treatment.
Vega,
We'll see where things end up in Nevada now that the gaming revenues and associated sales taxes vanish
I don't think general federal tax payers will be eager to bail out California, Massachusetts, or NY state budgets.
Why not - those states are net contributors to the Federal government.
#
Precisely, the reason the Founding Fathers created the Senate.
Boomer,
That sounds nice, then magically everyone will live closer to their jobs.
Wait, they won't have jobs. Never mind.
They won't need to drive at all.
Hudson: We're on an express elevator to hell - going down!
"Maybe he should cut the prison budget a bit? God forbid nonviolent drug offenders might get released."
We can put the violent ones on empty container ships and sink them at sea.
Calif. ought to raise the gas tax instead.
Sadly, the only thing it makes sense to cut are schools. They use half the budget, and increases in any other spending result in more school spending also (Prop 98). I know of high schools with 2500 students and 6 vice principles! Cutting one VP from every state HS would save $1 billion.
Rather than tackle the insanity that are the state funding requirements, the Governator is trying to throw money at the problem. This will end in tears.
Jim Rogers was on Booberg recently saying how he's shorting long term treasuries.
Uh oh.
BTW Jim Rogers has made tons of great calls and I very much respect his opinions. But I think he's been short long bonds since 1986.
All Fall Down,
I always thought making little rocks out of big rocks was poetic.
Suggestion noted.
Eplosi suggesting a permanent tax cut - I guess the congress will spend until the market imposes that debt ceiling. wating...
Jim Rogers was on Booberg recently saying how he's shorting long term treasuries.
I think the increased deficit financing and the decoupling of petro-china-dollars will dwarf any bullish effects of the flight to safety.
And he proposed canceling dental insurance for poor adults on the state's MediCal program
Exhibit A on false economy. Save 50 bucks on tooth cleaning, pay 25,000 for heart disease. Bad teeth cause all kind of secondary problems.
I'm so sick of hearing pundits say we have a "trust" or "confidence" problem. Liars. Salesman.
We have too much debt and not enough income. End of story.
Being broke does not inspire CONfidence.
What a sham.
going up?
The US has high enough tax rates, the problem is all the deductions
"Maybe he should cut the prison budget a bit? God forbid nonviolent drug offenders might get released."
Prison labor is your friend.
All Fall Down writes:
"We can put the violent ones on empty container ships and sink them at sea."
lol
Two down days
I admit it, big mistake to vote for
Obama
not
rps writes;
Geez, welcome to my world....Chicago. People without transportation are stuck with 10.25%. Otherwise, people purchase goods outside the city/county limits. This is a forced tax on the poor, elderly, and disabled
You are catching on, its like lottery or slots in MD and the fact that you used to could get real money in change for food stamps then go buy cigs and 40's now its plastic... so we invent the lottery and slots to fund education and get revenue..
Many of us refer to these as taxes on the stupid and poor and elderly... those that normally dont pay any taxes...
if we can tax bingo, then we got something... oh and tractor pulls...
and hand dances...
I don't think general federal tax payers will be eager to bail out California, Massachusetts, or NY state budgets.
TJ | 11.06.08 - 3:55 pm
Hey TJ, we get back less than 90% of what we send to washington (we are talking a lot of money here). The 3 states you mention have been bailing the rest (or most thereof) of the country for a long time.
Well, states are, for the most part, constitutionally mandated to keep a balanced budget. As such, they are given a short list of options, namely raise revenue, or cut spending. So states have no choice, and the federal government is subsequently responsible for keeping the keynesian pump going.
However, a ton of research is out there (look to Stiglitz), that this is better dealt with by increases on high end marginal income taxes, rather than regressive taxes, as you want to keep the money flowing. With high income earners simply stashing cash away this year, and low income keeping it moving. We want the highest multiplier, so we should be looking at unemployment and medicare benefits first, coupled with high end income tax hikes. Of course, however, this isn't fully in the cards.
EHP, how about issuing $500bn in pension obligation bonds. Dump all the proceeds into the stock market and prices will go up, and the bonds pay for themself. problem solved
I have a better idea. The reality is that all those SS retirees are bound to their SS payments. In effect, they are slaves that can be bought and sold on the open market.
There's probably some value left that be extracted from them. They could be "securitized" to the highest global bidder!
Maybe we can get the ex patriot corporations in the Cayman Islands to come home - or at least pay their dues.
import prisoners for fee... it works privatize it, and containerize it, charge other states...no overhead for them...
Maria came thisclose to a on-air breakdown just a moment ago. Funny stuff!
Sen.Dodd tells the sheeple we need regulation, can not trust the markets, (Forget about Friend of Mozzilo Loan Club)
Vote Obama, oh you already did?
JPM is the FED.
See following article :
J.P. Morgan — Loving Their Handiwork
Broward Horne,
I get dibs on the first tranche.
The 3 states you mention have been bailing the rest (or most thereof) of the country for a long time.
Yep, and the Bay Area receives $1.20 for every dollar it pays in taxes, while LA gets about $0.85.
Gotta spread that wealth around.
"fifty bilyon dollahs"
Oh so true yet so far from declaring it.
Ciao
MS
Sorry, Gray.
Californians have very short memories.
Gray who?
What ever happened to Jas ??
But California can't keep going further into debt. Whatever else happens, the budget has to balance
The CA budget hasn't been balanced in the past ten years, what makes 2009 so special? I say we keep borrowing until 2032!
EvilHenryPaulson writes:
The US has high enough tax rates, the problem is all the deductions
Alternative minimum tax, anyone?
raisng taxes on joe citizen during the worst econ downturn in 70 years. how do they think that is gonna work? what ridiculous calculus are they suing?
EvilHenryPaulson writes:
The US has high enough tax rates, the problem is all the deductions
EvilHenryPaulson | 11.06.08 - 4:04 pm
EHP, thats another reason why im reluctant to buy... or at least watch what i buy ever since Frank and Dodd talked about having to decrease if not eliminate home mortgage deductions to offset the fix to AMT...
sheeple are so inclined tpo talk about the interest they are going to get back every june... and they count on it like income, of course that was way back 6 months ago when tis was conatined to subprime, with no chance of entering our financial system much less effecting our economy..
now i dont see them touching MID but they will have to make up for AMT deficit thats for sure....
using, not suing
problem is that this sales tax hike is a good idea
unfortunately hiking now is the wrong time
the unwillingness to have a VAT or sales tax increase is pathetic
consumption should be taxed - maybe then people would have saved a little, and maybe then we wouldn't have quite such a big mess
but now, when we need a little spending, when we need a little money velocity, its time for tax hikes? too late taxinator - you needed to do this 2 years ago...
Max writes:
"Yep, and the Bay Area receives $1.20 for every dollar it pays in taxes, while LA gets about $0.85.
Gotta spread that wealth around."
How much does Goldman Sachs, Bank of America and JPM receive for each tax dollar they pay?
Republicans: the masters of spreading the wealth by concentrating it and then calling it the "free market".
-442
Still no way near my call for DOW 7200.
evilBlackhat reminds me that it was no where near his call for DOW 3500.
Have a ways to go.
Is it just me or is Maria Bartiromo getting uglier by the day. I don't think she'll be able to stay on air long enough to see the market bottom.
It looks like she went to a cheap $10 hair salon, has been gaining weight (and trying to hide it with bulky jackets), sour attitude, the whole 9 yards.
Dow-lowest level since Oct. 27
Unless CA has already figured out how to tax out-of-state online merchants...
Ahh, yes. I foresee significant retailing opportunities at PirateBay.com in the near future.
The gov't will just have to tax UPS and Fedex!
Ambac: We're standing at severities of 55% in relation to subprime, 45% in relation to Alt-A,. Obviously that reflects [dilution] in house
prices along the liquidation timeframe which incur carrying costs in between times. All of that adds up to a cumulative loss
estimate of around 19% for '06 subprime."
Should start a trading market for deferred tax assets..
Well, states are, for the most part, constitutionally mandated to keep a balanced budget. As such, they are given a short list of options, namely raise revenue, or cut spending. So states have no choice, and the federal government is subsequently responsible for keeping the keynesian pump going.
This indeed is the bind at the state level. The states should relax their rules to being in balance over the business cycle. That might be hard to legislate, however.
Remember the Luxury Tax? Was that during the Clinton years?
"We'll see where things end up in Nevada now that the gaming revenues and associated sales taxes vanish"
Absolutely. I would much rather live in a state which does not provide services I do not use.
Traditionally being a Republican state it is averse to tax increases. But this election it has gone pretty blue.
A 10% sales tax wud still beat no income tax in NV.
And as they say, don't fight the markets.
U can move here too
However, a ton of research is out there (look to Stiglitz), that this is better dealt with by increases on high end marginal income taxes, rather than regressive taxes, as you want to keep the money flowing. With high income earners simply stashing cash away this year, and low income keeping it moving. We want the highest multiplier, so we should be looking at unemployment and medicare benefits first, coupled with high end income tax hikes.
This makes sense, but again there are practical implications that also have to be considered - when you try to take money from one group and give it to another you run the risk of creating a deep divide within the country and potentially a sort of financial civil war.
The risks have to be balanced with the rewards. I.E. there are tremendous costs associated with redistributing wealth even if it needs to be done - there's a risk of going to far and negating the benefits.
CA better pray for the big one...I understand that massive natural disasters are great for stimulating the local economy, what with all the construction/cleanup/infrastructure rebuild.
/ef
Maybe we can get the ex patriot corporations in the Cayman Islands to come home - or at least pay their dues.Speed
Better idea. Send Navy and surround and plunder HRH Elizabeth II islands that protects these traitors. Next, we put a "fee and bonus" on the heads of the tax dodgers. Blackwater will change their MO to Bounty hunters.
EvilHenryPaulson writes:
"Is it just me or is Maria Bartiromo getting uglier by the day. I don't think she'll be able to stay on air long enough to see the market bottom.
It looks like she went to a cheap $10 hair salon, has been gaining weight (and trying to hide it with bulky jackets), sour attitude, the whole 9 yards."
Maria Bartiromo:
From money honey into a market frumpy.
Yep - BGZ (3x inverse Russell large cap) up $20 or 30% in 2 days.
Maria infomercial is now on, probably no O tho. Buy,buy,buy.....great values... like medicinal salesmen and their wagons full of wares.
What do you think we have now? This is a rebalancing not a redistributio
EvilHenryPaulson writes:
Is it just me or is Maria Bartiromo getting uglier by the day. I don't think she'll be able to stay on air long enough to see the market bottom.
It looks like she went to a cheap $10 hair salon, has been gaining weight (and trying to hide it with bulky jackets), sour attitude, the whole 9 yards.
EvilHenryPaulson | 11.06.08 - 4:11 pm | #
I agree. I used to think she was the belle of the ball. Now that the market and economy has gone to hell, the bloom has come off the rose.
I guess the issue ac is that this type of redistribution has been happening for quite some time. The middle class has paid in to a system that reallocates their wealth into non-productive bonuses.
This is where I revert to "game over".
The puss hasn't been drawn from the system yet.
The shock is not shocking enough yet.
rent to own...
exactly on bigger worries. ironic that all the lefties talk about green spend but the coruting the saudis and petro dollar has never been more improtant. Nor has defense spending for all those thinking there will be a 125% cut. The US on bloomberg apparently rekjecting the idea of a gloabl bailout warden/regulator. Gm / Ford may be needed for nothing more than national security. The US is looking a lot like Russia circa 90s at the moment.
We should just raise taxes to 100% and have everybody work for the government!
Is it just me or is Maria Bartiromo getting uglier by the day
She disgusts me. Not because of her looks either.
'At this point, we have bigger worries than the current recession.'
I would tend to agree. Countries and governments fail all the time when you look at larger time spans.
The simple fact is that the US survived the Great Depression without revolution or political collapse.
People look at the economy and start with the assumption that another Great Depression is the worst possible outcome.
It is not.
G Hathaway said:
"Can anyone confirm the volume on today's selloff???
My Ameritrade chart is showing that there is significant volume behind the move.
Anyone? Mouse?"
Volume today was average at best.
With 10%++ sales tax anyone in CA that doesn't shop for goods on the internet tax free is a moron. Bad sign for retailers in CA...
AC, how exactly do you intend on solving it otherwise? We collect a significantly lower % of GDP for government revenue than most of the developed world, and still ring up debt like nobody's business. We have to get through this period by increases in federal spending, without tax increases, and then once we've hit bottom we will have to raise revenues, and pull back some of the spending positions. Every government does some level of redistribution. I don't think we're coming close to a financial civil war. There is a wide amount of research (check out the Center for Budget adn Policy Priorities) that shows how there are states that run in the red (their citizens give less in taxes than the government gives back in programs) and in the black. This has been going on for a long time.
I think "Bartiromo" is italian for "irrational market exuberance".
CNBC - bringing you the best in sloppy porn stars as the economy melts down...
ac:
I was about to disagree with your last note re GD being the worst possible thing (not).
But I have to say that I'm considering it might have merit.
Hail O Great Philosopher King!
bearly writes:
With 10%++ sales tax anyone in CA that doesn't shop for goods on the internet tax free is a moron. Bad sign for retailers in CA...
Shhhh! Don't give the government any ideas. They will target the internet for taxes next.
The beginnings of the Austrian Austerity for California
The simple fact is that the US survived the Great Depression without revolution or political collapse
US had smaller population base in the 20's and 30's. Also, all white, vastly christian. Hard to scapegoat your own race or religion. With all the outsourceing of jobs and illegals here working, scapegoating is easy and in some cases, not even scapegoating.
They will target the internet for taxes next.
Count on it. Dodd and Frank want yo dollahs, yo.
Why the talk of 10+% in California. This only takes them to 8.75, right?
its has been many years since maria had her ass pinched on the floor...and my crush is gone, i see her now in a burgandy top hat and a white suit by the side of the raod, I'm just waiting on Josie Wales to spit and ask how it is with stains.....
when you try to take money from one group and give it to another you run the risk of creating a deep divide within the country and potentially a sort of financial civil war.
Theres class warfare, all right, Mr. Buffett said, but its my class, the rich class, thats making war, and were winning.
And let's be clear here: so far all Obama has proposed is to return the top margin rate to about where it was during the Clinton administration.
But the flat-out reality is either taxes are going up substantially to just hold the level of debt flat and service the $5T in debt the Bush administration added, or printing happens.
I guess the issue ac is that this type of redistribution has been happening for quite some time. The middle class has paid in to a system that reallocates their wealth into non-productive bonuses.
It seems to me whenever some group of "oppressed people" gets ahead it's usually through their own initiative, and then the system ultimately goes along with it and helps them out in a legitimate way.
I simply don't think the "system" of its own accord can ever make people wealthier because that's the opposite of what wealth is - wealth means having control over your own life.
My guess is the "system" at this point really has no desire to make people wealthier in the real sense, I think the government's only concern is keeping people happy and under control (which doesn't make people wealthy in the same way that good heroin buzz doesn't confer wealth either).
But the flat-out reality is either taxes are going up substantially to just hold the level of debt flat and service the $5T in debt the Bush administration added, or printing happens.
Why have one or the other when you can have both at twice the price?
That's how the .gov thinks.
PeakVT
your reasoning and pragmatic thinking is very sound. Run for office in your local municipality
Well, so much for the The 890 zoom last week. Back to singing; I got plenty of nothing, and nothing's plenty for me.....
Is it just me or is Maria Bartiromo getting uglier by the day...she went to a cheap $10 hair salon, has been gaining weight (and trying to hide it with bulky jackets), sour attitude, the whole 9 yards
She's off the white horse and onto the harder stuff since the Bull has gone Bear
They will target the internet for taxes next.
NY has been involved in legal disputes with Amazon and others over this very issue. Overstock, for one, I think rolled over.
Barring a physical presence in the state (NY claims that Amazon's "Associates" counts as in-state), the issue is strictly up to THE Congress.
Quill v. North Dakota
Strange how some of the most important Supreme Court cases are the ones the public never hears about...
Anonymous writes:
The simple fact is that the US survived the Great Depression without revolution or political collapse
US had smaller population base in the 20's and 30's. Also, all white, vastly christian. Hard to scapegoat your own race or religion. With all the outsourceing of jobs and illegals here working, scapegoating is easy and in some cases, not even scapegoating.
Umm... The US was not all white then. Also immigrants were scapegoated at that time as well.
Mexican, Italian, Chinese and Irish immigrants were often the whipping post during rough times. The reason we have such draconian laws concerning marijuana use was partly the result of this.
Realize that 70% of the growth in the economy was in real estate, and that was proven false.
Okay, time to duck and cover.
Pelosi is arguing for action now on a stimulus package of $60 billion to $100 billion, followed early next year by a companion measure including a "permanent tax cut."
LOL.
Bushonomics 101.
Bribe the people to stay in office.
Anti-leadership.
An Outlaw Josie Wales reference? Indescribably awesome.
Sales taxes are regressive. I really don't think that will fly in the face of a Democratic legislature.
As people have rightly pointed out, internet sales will go up and that was oddly missing from the list. I think internet sales WILL get taxed.
I think you will see the personal income tax code revisited. New bracket, starting at (following Obama lead) $250k of 10.5%. Maybe the other brackets star at lower levels as well.
Much higher 'Other' tax to cover rising cost of unemployment benefits.
Hopefully we will revisit public employee retirement benefits - big area of saving there.
With the school cuts more and more municipalities are creating special property tax assessments to help fund schools.
Hrm. If Obama federalizes teachers that would be an immediate, enormous releif.
Strange days.
I know people do not want to hear what I have to say but the truth hurts. But I still will not say it on this board.
Fact of the matter is that we in California are spending way more then we are bring in because of......
PeakVT,
I agree, i think Obama knows he is shooting low...
though i dont recall him ever actually saying he would return to 39% , rather saying only that the rates were 39% under clinton, semantics i know, plus like all good president elects, he knows his ace up his sleeve is " we couldn't have fathomed how bad this actually was"...
Jeez a lot of cowboy metephors lately...
sorry, 'bout that pilgrams!
AC, how exactly do you intend on solving it otherwise?
We don't "solve it".
I'll give my favorite example again...
Five guys buy the same house over the period of a month. The first guy moves in, the second shows up, then third, etc.
Who gets the house?
My girlfriend replied, "Why don't they just split it five ways?"
And I said, "Are you willing to give 4/5ths of your retirement to that homeless guy on the street?"
And she sat there, in shock, "But... that that's MY money".
right.
okay, then.
Off to play pool.
thanks deuces!
I'm serously thinking that Obama should consider resigning... like right now.
The California Prison Disaster:
The California Prison Disaster - NY Times
Sales tax (or better VAT) in Europe is above 10%, sometimes above 20%. California doesn't seem to have much alternatives.
You'll know when things are going to turn around when our leadership encourages cutting back and saving. We need the FFR back up to 5%.
AC, how exactly do you intend on solving it otherwise?
Haha...
Who said there's a solution?
Maybe I'm overly cynical and pessimistic but my suggestion:
Pain and time.
Most people wouldn't consider this a solution of course, and I may well be overlooking something, but I want to make it clear I've never claimed to have a solution.
I believe the "solution" existed back in the 1990s. Not really now.
Why the talk of 10+% in California. This only takes them to 8.75, right?
Thats Ballgame Comrades | 11.06.08 - 4:23 pm
Don't know if anyone answered this yet, but here in Cali, local areas add some sales tax on top of the state sales tax.
As goes the Dow, so goes Maria Bartiromo...
...isn't that the old saw?
Assume Crash Positions! writes
thanks!
Vega,
Looked into Nevada's revenues because I'm curious
$1.2bn deficit and growing quickly, governor doesn't want to raise taxes, won't cut any more spending after a couple rounds
0607 report Total revenues of $4.8bn
Interesting setup. Tourism is big, followed by general consumption taxes, and then property taxes. Not sure what the School Support and City relief taxes are.
But Nevada is getting hammered. Auto sales tax revenues are down 20% YoY (I gather reliance on many out of state purchasers for a lower tax). Luxury Retail/Liquor/Cigarettes/Lodging/Live Entertainment/Real Estate will be far from their record peak numbers.
It may not have the debt of some other states, but it will be rough adjusting from tourism-derived tax revenues to state residents and in a rough local economy. People just will not have been expecting it
This is why I voted for Obama. He has the financial background and education, as well as insight into state government financing, to solve all this and change this mess. We need to put Obama in charge NOW so that we can get back to a Callifornia that was safe, profitable and the envy of the world back in 1950 to 1960's before the Republicans ruined this state.
EvilHenry - regarding your Bartiromo comment, good observation. You don't miss anything!
Wow. People here have a disturbing fetish with government spending and higher taxes.
Cut taxes. Cut government spending by more.
Problem solved.
They will target the internet for taxes next.
Count on it. Dodd and Frank want yo dollahs, yo.
Don't forget Schwarzenegger.
"If Obama federalizes teachers that would be an immediate, enormous releif." Neuromancer
Hmmmm, interesting idea. I'm not sure if the teachers unions would agree. They are powerful as separate entities. Blackmailing cities, towns, and states via striking for wages and benefits just before the school year starts. As federal employees they'd lose that power.
I was about to disagree with your last note re GD being the worst possible thing (not).
But I have to say that I'm considering it might have merit.
Hail O Great Philosopher King!
Well realistically that's not philosophy; that's history.
If you just zoom out the perspective a little bit you see catastrophic failure of civilizations and governments all the time.
The Great Depression was not one of those events.
By some measures, at least, it might have been considered a "success".
That doesn't mean you endorse or embrace such an event, only that you consider the alternatives.
i might be crazy but at this point i say fair tax gross 17-18% everyone no tax shelters ., no deductions and reinstitute the one thing that the libs in congress got right which was PayGo... budget to the revenues..
funny we have to.....
After Hours: Qualcomm sinks after earnings miss expectations
An Outlaw Josie Wales reference? Indescribably awesome.
Dying ain't much of a living boy
Man -
'compared to a couple of hundred unemployed Chinese. '
ooops - better proof reading needed - assuming no one noticed -
'compared to a couple of hundred million unemployed Chinese.
Citigroup's $1.1 Trillion of Mysterious Assets Shadows Earnings - Bloomberg.com
AC, ALL,
Here's the Bloomberg link that mentions Citi's $1 trillion in off balance sheet "assets".
Make sure to check out the image (click on it to the right of the article) showing the make up of these so called "assets".
No way is Citi solvent.
We have serious problems.
rent_to_own writes:
check out the information dissemination website a good read from mil perspective. The interesting thing about the political mil types is that they see no nexus to the economy / structure / plumbing. They cant see through the US beacon on the hill metaphor.
Endeavour to persevere!
Taxes aren't perfect and pain and time is no solution. Here's the deal, we can be pessimistic and cynical (two things I'm guilty of on a regular basis), or we can keep the pessimism and cynicism in the background. What I mean is you have a plan to get out of it that is ideal, and then you have a set of contingencies to deal with reality, one more 'cynical' than the next. Pain and time takes the thinking out of it. We can pull ourselves out of this one, but it will take many years (if not decades) to do it without massive default (I won't claim that selective default is imminent, but is becoming a larger possibility). But just giving up at the start, it's pitiful.
Question is does SD, OC, or LA default first...tick tick tick
Also, the state has been clawing back grant $$ from cities for public works projects etc, leaving cities with gaping holes in their budgets.
Then again, we keep voting the same idiots back into office.
Former Goldman Sachs analyst may have fled country
Business Week Online > File Not Found
How about just cutting spending?
evans:
This is why I voted for Obama. He has the financial background and education, as well as insight into state government financing, to solve all this and change this mess...
Please list:
financial background:
financial education:
Insight into state financing:
I am not as enlightened, not that i dont wish him the best....
it's not for eating it's for looking through
I will repeat that the obvious solution to California's budget problem is for the state government to start printing its own money. Don't call it money; call it "scrip" or something. Peg it to the USD and accept it as payment for state taxes. Then, fire up the presses.
I believe the "solution" existed back in the 1990s. Not really now
Yes, my thoughts exactly. The deficit needed to be truly fixed immediately after the Soviet Collapse. Instead, we got a "pretend fix".
I know why Greenspan did what he did, but nobody else did and instead of consolidating and paying down debt, the rate cuts encouraged them to borrow and speculate even more.
The 1987 market collapse and the Soviet collapse of 1989 were connected, as well as the Nikkei crash of 1990. The US won the Cold War because it had a bigger credit card than the USSR but not by that much.
Josie, come on we gots to go..
you run on boy...
but Josie, its a trap..
run along boy..
But Josie, it was Paulson...
Paulson you say, never would have figured that...
"Hmmmm, interesting idea. I'm not sure if the teachers unions would agree. They are powerful as separate entities. Blackmailing cities, towns, and states via striking for wages and benefits just before the school year starts. As federal employees they'd lose that power."
Not to mention that we'd have the makings of a religious civil war (and almost directly along the old Mason-Dixon fault line) if a Democratic controlled congress tried that under a democratic administration. If the Supremes are forced to rule on the intelligent design/creation "science"/evolution debate on a national level, you've got the makings of a 21st century Dred Scott decision.
This proposal would push the LA sales tax rate to 10.25%
Damn. That will do a lot to stimulate buying. Here in Taxachusetts it's only 5%.
Of course the VAT in the UK is 17% I believe.
No bailouts:
Buzzards need to eat...same as worms.
No me mata!
Por mi madre!
Fact of the matter is that we in California are spending way more then we are bring in because of......
Tim in Cali | 11.06.08 - 4:27 pm
is this a rhetorical question?
how about unfunded federal liabilities?
Is a showdown between the State of California and schools/prisons/general state workers likely?
what if Schwarzenegger gets Grey Davis'ed, is that a winning platform to go after the private prison industry or teacher entitlements?
Corey:
I like "scrip," but why not call it TARP and put Arney's face on the 100,000 bill.
450 visitors...the CRVIX is creeping back up?
I see the DOW is doing what we call...
a mossouri boat ride..
But Josie, it was Paulson...
Those lying, blue-scum bellies...
Schwarzenegger was hoping to borrow and spend his way through the end of his term, then leave the financial quagmire for his successor.
Bush was shooting for the same.
Missed it by that much.
.
Ticker Tape of Doom writes:
Mexican, Italian, Chinese and Irish immigrants were often the whipping post during rough times.
One of my friends and I always discuss how we should go on the Stormfront dating boards and pick up girls with the line that we've been white since the 1970s.
It's amazing how many "whites" conveniently forget they weren't white when born, even when they lived a substantial portion of their lives as a potato-nigger, wop, pollack or other form of papist.
Y'all only turned white when the "real" whites ran short numbers and had to let subhumans of your degenerate race into the club.
Check out Lovecraft's "The Horror at Red Hook" some time awesome squint-eyed savage action. "Gorgo, mormo, thousand faced moon," man, mom never taught me the good stuff from back in the Old Country.
From MarketWatch:
Disney profit declines 13% on Lehman charge
LEH's going to be a worm in a great many apples.
I see the CA teacher's union as having badly over played its hand. When times were good they spent a ton of cash fighting the terminator on: tenure, pay for performance, use of union dues for political pruposes.
Now that times are bad, there is not a lot of sympathy for that group. And certainly less money in the 'ol war chest.
"Oh, and with the passage of the highish speed sorta choo-choo"
Unfortunately, I think that the latest generation of Californians don't equate "bonds" (ie borrowing) with higher taxes. Califonians, especially younger ones, have been used to the past 6 years of being able to borrow as much as you want with no consequence.
The problem is that those days are ending. I look at it as a harsh learning experience, and a sorely needed on at that.
Buying a shiny new high speed train to connect San Francisco and Los Angeles through Fresno and Bakersfield (wow, those are some high-traffic routes!) will actually cost money...around $625B a year extra on the California budget, and that's not counting operating costs.
Just a quick question...isn't next year's budget already $10B in the hole?
Again, thank you my fellow Californians for spending money you don't have, wisely.
(The route map: http://www.cahighspeedrail.ca.gov/map.htm)
whipped em good didnt we Josie?
sure did Casey
Tricked em again didnt we Josie?
Sure did Sarin, now rest now...
what speed says.
also, why is it even remotely acceptable at this stage of the meltdown for "unwindings" or "blowups" to happen in the dark? what needs to be done legally to put those shenanigans under a spotlight?
I didn't surrender, but they took my horse and made him surrender. They have him pulling a wagon up in DC I bet.
As for prison guards. With overtime they seem to be averging $200k a year. Tom McClintok said it best, "I value what these people do, but we need their service at something much closer to market wage."
So yes, I think the Prison Guard's Union will face the wrath of a poor public.
Cubans are really scared of O. One client, who I didn't even understand why she was upset, was crying because she is thinking that O is like Castro and it's the end of the republic, and that he's islamic. But his dad was an atheist I say. Her dad was in a Cuban jail and all, but I didn't even get it. Finally, my Cuban secy explained it to me after she left.
This is an otherwise sane normal intelligent lady who is a long time client.
o.k. rob dawg and hank,
I don't get the high-speed train either. You connect population centers, mega-opolises not fresno to LA.
omg.
If you hooked straight into SF then you could link the two into a financial duopoly...wow, what a piece of crap. $38 bucks to go one-way to Fresno?
Neuromancer,
Private prisons have been the top growth industry in the last 8 years after energy and defense contractors (or something like that)
Obama: The elections over. Our side won the war. Now we must busy ourselves winning the peace. And Fletcher, there's an old saying: To the victors belong the spoils.
Fletcher: There's another old saying, Senator: Don't piss down my back and tell me it's raining.
Byzantine_Ruins writes: One of my friends and I always discuss how we should go on the Stormfront dating boards and pick up girls with the line that we've been white since the 1970s.
hahaha - I have thought of trolling there as well but I fear that the admins would trace my ip and that would make me a target.
It's amazing how many "whites" conveniently forget they weren't white when born, even when they lived a substantial portion of their lives as a potato-nigger, wop, pollack or other form of papist.
Y'all only turned white when the "real" whites ran short numbers and had to let subhumans of your degenerate race into the club.
can a Jew join the KKK?
"Jew joins the kkk its funny this prankster John Safran travels to California to ask a Red Dragon (Chapter Boss) to see if he could can join the Ku Klux Klan. The only problem is that Safran is from a nice Jewish family from Melbourne."
YouTube -
Check out Lovecraft's "The Horror at Red Hook" some time awesome squint-eyed savage action. "Gorgo, mormo, thousand faced moon," man, mom never taught me the good stuff from back in the Old Country.
I will def read that. Thanks for the tip.
Finally, state employee salaries have been directly competitive with the private sector for years. However, state workers get a retirement that is off-the-charts better than contractors.
Again, I think this Deep Recession will reveal the true cost of their compensation and yes, it will not stand up to public anger.
Fletcher: Damn you, Senator. You promised me those men would be decently treated.
Senator Obama: They were decently treated. They were decently fed and then they were decently shot. Those men are common outlaws, nothing more.
"strat575 writes:
Taxes aren't perfect and pain and time is no solution...just giving up at the start, it's pitiful."
Yes, I agree, we need a "quick fix". Time and pain is not a solution, as in "it took time and greed for us to get into this mess, it will take time and pain to get us out". What kind of solution is that? We should be able to fix things NOW and QUICKLY. Just don't give up...there MUST be a way to start a Ponzi-scheme-based economy again. What a bunch of crybaby quitters...
RE Citi off balance sheet liabilities:
The $605 billion in mortgage assets is mind-boggling. But more remarkable to me is this from the Bloomberg piece:
"Robert Traficanti, Citigroup's deputy controller, sent a letter to FASB Chairman Robert Herz on June 9 objecting to a provision that would force banks to reevaluate their off-balance-sheet assets and liabilities every quarter. Citigroup has more than 7,000 VIEs and more than 100 QSPEs, he wrote."
We believe that this model is impractical from an operational standpoint,'' Traficanti wrote.We would not be able to perform this analysis given the resources we currently have. We would need to hire many more accountants.''
So they really don't know what their exposure is, since they don't have the staff to evaluate it on a routine basis now. That seems like grounds for a shareholder lawsuit alleging reckless negligence on management's part. Amazing.
Gnu thread.
Buying a shiny new high speed train... will actually cost money...around $625B a year extra on the California budget
Can't we just go back to the old days when we imported Chinese slave labor to build railroads?
Think of the synthesis. Millions of chinese are unemployed now, hundreds of cargo ships are sitting empty and lots of empty houses in CA.
Many possibilities here.
I bet we could build it for $100B.
Careful Byz, many out there believe in literal readings only.
Lets all call up our local Chrysler dealerships and ask if they any 300's in stock. When they say "Why, Yes!" we tell them we will be by Sat. to look at them.
Spread joy through out the land. Yes we can!
Cubans are really scared of O.
American Cubans are Cuban Cubans' worst enemy.
Can CA reclaim the states missing Wall Street money, found in the states Comprehensive Annual Financial Report? I here there's billions of dollars there from state enterprise and investment activities. I here that money is not rolled over back into the general fund at the end of each fiscal year. Just reclaim the missing Wall Street money and everything will be fine. Does anyone have more information on CAFR's?
can a Jew join the KKK?
Ticker Tape of Doom | 11.06.08 - 4:53 pm
yeah, they just call themselves neocons, though.
Safran predated Borat I believe.
We believe that this model is impractical from an operational standpoint,'' Traficanti wrote.We would not be able to perform this analysis given the resources we currently have. We would need to hire many more accountants.''
I'm left wondering -- does he mean the model where they are required to actually know what their books are like or the model where they have no idea.
Don't Freak writes:
How about just cutting spending?
Don't Freak | 11.06.08 - 4:36 pm | #
Would you like to be King of America?
So simple, but so profound in this day and age.
Good luck getting this crack-whoring spend til ya die nation to cut back.
The only thing we can cut back is our LACK of spending!
They should repeal the grossly unfair Prop 13 Wikipedia
That is the law that means boomers are paying much less than their fair share. Buffet even says its ridiculous that he pays a pitance on his 80s oceanfront mansion, less than his normal house in Idaho.
CA is doomed. Sorry. Actually we all are. It's ok with me. My CA is long gone. Heck, the No.VA. I grew up in is also gone. As is my AZ where they build a big freakin coal plant. So raise those taxes. Dumbnutz have never played SimCity.
Ahnold said that he wanted CA to be like it was when he arrived in the 60s. Only problem is the population has grown considerably since then (not to mention the spending). So, to achieve his goal he has to de-populate, spend less on prisons and spend more on education. Used to be a resident could go to UC at little cost -- thinking of the 60s.
California is a time bomb. Get out while you can.
California is a time bomb. Get out while you can.
And West Virginia is looking pretty bad also.
I grew up in an Italian Jewish neighborhood. People next door fled with 3 sets of clothes in '57 from Hungary through the fields. To me these are Americans, and Italians think that being Italian is so wonderful that any appelation meaning Italian is wonderful, including wop.
The Jews I know also think that being Jewish is extra special wonderful too.
Me, I wouldn't mind a drop or 2 of color, so I wouldn't get so sunburnt all the time, but being Irish and German will make you pale.
And we are all related to each other thru quadrillians of lines of descent.
Didn't the scientists trace lineage to something like 200 mitochondrial Eves? A book I read traced 600,000,000 western European and American descendents back to one Eve.
And we are all out of Africa. But we are all by heredity, tribalistic, so this stuff will come up forever. Just accept it will always be part of the background.
Neuromancer writes:
As for prison guards. With overtime they seem to be averging $200k a year.
And we pay our teachers how much? They basically are prison guards.
California is a time bomb. Get out while you can.
And West Virginia is looking pretty bad also.
Martha Reeves and The Vandellas - Nowhere To Run
YouTube -
EvilHenryPaulson ,
I do not dispute any of what you have said.
Prolly NV's economy is the worst in the nation.
All I am trying to say is that at least you don't have the state govt picking your pockets here as much.
As the state turns blue, state senate and legislature both turned democratic in this election.
But then again I can shop around if NV starts going CA's way.
TX, FL are next favorites.
Also WA, TN and WY are tax free.
They should repeal the grossly unfair Prop 13
Agreed. That would make far more sense, and be far more equitable, than imposing a regressive sales tax.
And for all those naysayers, CA will get through this. Even if it's painful.
How about this idea? Just stop spending, and cut the damn public employee pensions.
What a joke.
Recall Davis for daring to suggest a fee has to go up then turn around and support it yourself.
Tim in Cali writes:
I know people do not want to hear what I have to say but the truth hurts. But I still will not say it on this board.
Fact of the matter is that we in California are spending way more then we are bring in because of......
burritos
I read somewhere that the Mayan calendar ends in 2011. Did they know something we don't?
LOL. Who would have ever thought we'd see the day when a California Republican calls for a tax hike and a New York Democrat (Paterson) calls for savage cuts and NO tax hikes.
Strange days indeed, most peculiar mama.
Lawyerliz I've had the same reaction from seemingly sane people. I lost a friend yesterday over the election. A woman who is a nurse and has been a patron at the bar I work at since I started there four years ago. She was my Mom's HH nurse before she died and she knows my husband (who is black). She was ranting and raving for the first three hours of my shift last night about how the Muslims have taken over, he's a Muslim, and he is going to give all the lazy fat black people more welfare now. She also went into a tirade directed at me for doing voter registration. According to her, poor people shouldn't vote. I reminded her most of the people I registered to vote were elderly white women that were sick of Bush and the damage he has done to our country (I also included the fact that she voted for him twice and is also responsible) I suppose that was the end of our "friendship"...
How about this idea? Just stop spending, and cut the damn public employee pensions.
yfactor | 11.06.08 - 5:16 pm | #
Those pensions were earned, so cutting them is nothing but theft, no different than confiscating part of your 401k. By the way cutting spending in a recession makes no more sense than does raising taxes in a recession. Of course, just as it matters how and who you tax, it matters what you spend the money on and what is the rate of return you get for it.
"New York Democrat (Paterson) calls for savage cuts and NO tax hikes."
Paterson has been a wonderful surprise. He has been calling for cutting spending since he got the job. A bunch of entrenched repubs in Albany just got voted out, so he may have some room to move.
Bloomberg just rescinded the 7% property tax cut, and announced more job cuts.
giacutter wrote:
Plus, these are all solid blue/Obama states.
State bailout here we come.
Well thenI guess us folks here in NC should just blow out the budget and get down and dirty after all being responsible is for losers.
Basel Too wrote:
They will target the internet for taxes next.
What's the matter...don't want to share. Our new fuhrer will be pissed.
Comrade Kristina: I have a black friend (Henry) who happens to be an engineer and who also happends to be a republican. He was assaulted at his poll9ing place here in NC by a fanatical Obama supporter who happened to hear him talking to his partner that they were going to cancel out each others vote. She was voting for Obama and he was voting for McCain. The person who was handing out "suggested" ballots" for the democrats overheard their conversation and started yelling that he was a nazi for voting for McCain. After much verbal abuse he threw her ballot back at her. He got out of his car took his cane and went to vote.
Yeah, Comrade Kristina...one man one vote.....ONE TIME with these nazis.
No taxes on income or property?
Most of the EU does a 15 to 20% VAT and it doesn't seem to have killed their economies. But then, their economies aren't based on selling each other big-screen TV's, cars, and real-estate the way the U.S. economy is based. I.e., it pushes them more into producing smaller quantities of higher quality goods with a larger work force as vs. the U.S. economy which is based around selling each other larger quantities of lower quality goods produced overseas with little U.S. workforce participation in their production.
In other words, 10.25% sounds like a huge tax, but we have proof from overseas that it doesn't destroy economies, it merely shifts their emphasis a bit. But wait, I forget, we can't use overseas nations as examples because, well, they aren't American so they're not really people. Alrighty, then!
.
Oh yeah, one way to cut California's spending by $4B in one big whack? Turn loose any criminal who has a) served at least one year in prison, and b) was convicted of a non-violent crime. Yeppers, California is spending billions to incarcerate folks convicted of possessing whacky tobaccy.
I expect to see the above savings of billions happen about the same time that cows fly.
pensions are constitutionally protected, because it is a contract.
pensions are part of the reason American auto companies cannot effectively compete with some of the foreign auto companies.
Those pensions were not earned. They were extorted from the hard working people in this state, most of which do not have a defined benefit pension. And the one that have a DB pension, it is no where near as generous. Pensions such as these could have never been negotiated with a private corporations. Only through the extortion and corruption in government are they possible.
10% tax on oil produced in CA....
As soon who works for a very small oil company, I'm glad to know that I'll be looking for another job soon.
Finally a Govenor who gets it! Stop the white collar crime and this doesn"t happen. How can it take a movie star to solve this problem. The feds should have seen this coming. Now we tax to solve tghe problem. is there another way. NO! Suck it up and accept it> VOTE WITH YOUR BRAIN!!!
raise tax, cut budget, and fuq Prop 5.
what an a-hole.
Excuse me, but when I was working for government, I accepted a lower salary because I would get a pension at the end. There were no unions involved, just a calculation by the state that "it will cost less to pay the pension later than it would cost in higher salaries to pay him higher wages now." I could have made 35% more money in private industry, but that pension made it worthwhile to go to work for government. (Until I got tired of all the nonsense and left, but that's another story).
As for unions and pensions in the automotive industry, there was no "extortion" involved. The notion that negotiations between two parties are "extortion" is ridiculous. It's like calling overpaying for a used car "extortion". No, it's just bad negotiating skills on your part, that used car salesman saw you coming and negotiated you into a bad deal. But a contract is a contract. If it's a contract when a used car salesman negotiates a bad deal for you, it's a contract when a union negotiates a bad deal for GM in 1978 and thereby sets up a pension obligation that comes due in 2008.
The notion that we should just rip up contracts because they're bad for one party or another that negotiated them would cause chaos in our economic system. That's the sort of thing that happens in banana republics, not in first world nations, where our courts enforce our contracts so that we all live up to what we promised, rather than people with power just arbitrarily deciding to break any contract they don't feel like abiding by. You simply can't maintain a modern economy if you allow people to break their promises (contracts) to each other, because then nobody knows who they can trust since the courts aren't enforcing those trust relationships anymore and business doesn't get done except small transactions, locally, between people who know each other intimately. The movement of goods and services grinds to a halt. Destroying the village to save the puppy is no way of doing things, sorry, and destroying the legal basis of our economy to save GM... same thing.
Wait until the Federal government adds a consumption tax next year. Canadians and Europeans have been choking on double sales taxes for years.
It is completely typical of Arnold that he expects the upper middle and upper classes to be substantially exempt from paying for the costs of governance, hence his completely regressive sales tax proposal. When will the voters of California reject his class war and expect some burden sharing from all citizens of their state? His fiscal policies have been an utter failure---borrowing recklessly when receipts were large, now taxing the poor when receipts are dropping---one wonders when the media in CA will draw attention to that salient fact as well.
Hasta la vista Californ-eye-aye
Badtux writes:
Most of the EU does a 15 to 20% VAT and it doesn't seem to have killed their economies.
Except that europe is literally dying out. They refuse to reproduce because they haven't if fact grown in the last 20-30 years and they have no hope for the future. They will be living under sharia law within two or three decades. They pretend to pay us and we pretend to work.
Are people in California even going to bother to work in a couple of years?
At 7.25%, the Golden State's statewide sales tax rate is the highest in the nation, according to a 2007 ranking. If Gov. Arnold Schwarzenegger's proposed three-year, 1.5-percentage-point increase goes into effect, it would solidify our lead over our closest competition -- Mississippi, New Jersey, Rhode Island and Tennessee, which all had 7% statewide rates according to the most recent ranking by the Tax Foundation.
That'll push the sales tax rate to 10% in San Francisco and 10.25% in Los Angeles.
And it's already bad enough on the state income tax side:
The Tax Foundation ranks California as the worst state in terms of the income tax burden on residents. The state's top basic tax rate of 9.3%, which kicked in this year at $44,815 of income, is one of the highest in the country. And the 10% rate imposed on incomes over $1 million is the highest charged by any state, according to the foundation.
So let me get this straight, in 2009 or 2010, if you live in California, and Obama's proposals go through, your tax burden could look like this:
Payroll Tax 6.2%
Income Tax 39.6%
State Income Tax 9.3%
Total tax rate = 55.1%
Then another 10% tax on consumption.
Looks like San Francisco would only be affordable to poor people and retirees living on municipal bonds....
In Finland (and in most Western Europe I assume) the sales tax, or VAT, is about 20%.
No problem for us. And no deficit as large as in the USA.
Prof. Michael Hudson, U of MO, KC has it about right. We need to reverse rethug feudalism by taxing the piss out of 'land and the income therefrom', broadcast rights, ...
The first thing California needs to do is repeal Prop 13. the second is to reduce its prision population. Perhaps commute the sentences of all non violent drug offenses to community service.
JohnR(VA) writes: I read somewhere that the Mayan calendar ends in 2011. Did they know something we don't?
Just another bottom call.
Trotskylives is a racist who thinks that only "French blood" makes one a Frenchman. The United States would be populated by the Native Americans if it were up to him, because the original colonists would have died out long ago if not for immigration bringing in the waves of manpower of all ethnicities that populated the continent and still drive our economy. One of these days the Europeans will have to confront their racism and realize that people are people and that they are going to have to become a melting pot too if they are to survive. But that has nothing to do with taxes.
If I am making $360,000 (the point at which the 39% kicks in once the Bush tax cuts expire), a sales tax doesn't affect me a whole lot because I'm probably spending $60K/year or so on consumption subject to sales tax. The rest will go into investments or into a bigger house or etc. So I am baffled as to why HK_Vol thinks people won't want to work in California because of a tax bracket that doesn't apply to anybody making less than $360,000 per year. Does HK_Vol really think that poor people make $360,000 per year? How... Republican... a concept that would be
.
I agree with the person who said that consumption taxes are an unfair tax upon the poor. While the CA sales tax has exemptions on many food items, it still falls disproportionately on the poor because they consume a far higher percentage of their income. On the other hand, practically speaking the notion of a "temporary" income tax hike is a non-starter in California. The state needs money now, not in April 2010 which is when they would get the extra monies from an income tax hike. They can start collecting a sales tax immediately.
As for, "will this kill the California economy?" Probably not. California is an investment-oriented export-based economy. We use investment money to create high-tech startups and export high tech goods and services to all over the world. We aren't reliant upon selling each other real estate, cars, and big-screen televisions for the survival of our economy. Reducing consumption in California thus hurts Californians less than reducing investment would. Which still doesn't make California's tax codes sane or the way California is spending its money ($10 billion on prisons!!!!) sane. 1.7% of California's adult male population is behind bars in its prisons and jails. That's just plain insane. The only nation-state in history which has ever incarcerated a larger percentage of its population was Stalin's USSR. And we all know how that ended up...
I say, scrap prop 13 and let those property taxes rise, rise, rise. It will prevent runaway prices too.