They’re dreaming that they can continue to tax the rich without consequences…that the rich will stand still and take it…that the rich have a bottomless well from which the taxpayers can draw. Proposition 30 fulfilled the fantasies of those dreamers.
California State Controller John Chiang has announced that total state revenue for the month of November 2012 fell $806.8 million, or 10.8%, below budget.
This has to be one of those “well, duh” moments:
Democrats thought they could hammer “the rich” by convincing voters to pass Proposition 30 to create the highest state income tax in the nation. But it now appears that high income earners have already “voted with their feet” by moving themselves and their businesses out of state, resulting in over $1 billion shortfall in corporate and income taxes last month and the beginning of a new financial crisis.
The big spenders couldn’t contain their glee nor their greed in spending the money they were sure was going to come rolling in in tidal waves. First, the glee:
The California Teachers’ Association (CTA) trumpeted: “California students and working families won a clear victory today as voters clearly demonstrated their willingness to invest in our public schools and colleges and also rejected a deceptive ballot measure aimed at silencing educators, other workers and their unions.”
And then, the new spending:
State bureaucrats immediately ramped up deficit spending far beyond the state’s $6 billion annual tax increase, with the Departments of Health Services and Developmental Services increasing this month’s spending by over $1 billion versus last year.
But the “millionaire migration” has begun despite promises from the Stanford Center on Poverty and Inequality (how about that for a title?) that “found no risk of the super-rich leaving” California. They were too closely tied socially to their present location to pull up stakes and move:
They don’t want to take their kids out of school; they want to stay connected with friends, with families … with business contacts. People crowd together, from Silicon Valley to New York City, because of the returns associated with collaboration.
Said one of the authors:
People need to think about the depth of California’s budget problems. I think there’s [sic] much, much bigger things to worry about than this issue of tax flight because it’s really hard to find any evidence of it … I hope [rich] people hear, listen to and absorb what the evidence says on this issue.
I just checked the U-Haul Index for rates between Pasadena, California and Houston, Texas. For a small van, the outgoing rate is $1,238, but the incoming rate is only $801.
Oh, and there’s a new store opening in Beverly Hills, on Rodeo Drive: it’s the 99 Cents Only store.