Advancing a Free Society

California’s Assorted Rocks and Hard Places

Friday, November 12, 2010

News came out on Thursday that the California budget deficit is actually closer to $25 billion, twice what we are told. This follows from last year’s $42 billion shortfall, which was closed by all sorts of one-time tax increases and gimmicks. Here is our general dilemma in a nutshell.


Fact one: California has among the highest taxes in the nation, over 10% on top incomes, and about 9.5% that hits earners when they get above $47,000.

Sales taxes, depending on the county, average close to 10%. The result is that thousands (the exact number is unclear, perhaps between 2,000 and 3,500) of more affluent Californians are leaving the state each week for low- or no-tax states. Raise income taxes or sales taxes or gas taxes higher, and there will be a stampede. Note that property tax rates are not singularly that high in comparison to other states. Yet that fact is of little help since our assessments are often astronomical (given that we like to live on the coast and then, once there, ensure others cannot).

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