Prior to Prop 30 passing, CA already had the 2nd worst state income tax rate in the nation. Our 9.3% tax bracket started at $48,029 for people filing as individuals. 10.3% starting at $1 million.
Now our retroactive (to 1/1/2012) “millionaires’ tax” rate is 13.3% – including capital gains. Increased taxes now start at $250K.
CA now has by far the nation’s highest state income tax rate. We are 21% higher than the 2nd highest state (Hawaii), 34% higher than the 3rd highest state (Oregon), and a heck of a lot higher than all the rest – including 7 states with zero state income tax.
CA is so bad, we also have the 2nd highest state income tax bracket. AND the 3rd. Plus the 5th and 7th. http://taxfoundation.org/sites/taxfoundation.org/files/docs/ff2012.pdf Tables #11 & 13
CA has the highest state sales tax rate in the nation. 7.25% (does not include local sales taxes). 7.50% starting next year.
CA corporate income tax rate (8.84%) is the highest west of the Mississippi (our economic competitors) except for Alaska.
http://taxfoundation.org/article/2013-state-business-tax-climate-index Table #1 – we are 6th highest nationwide.
The NY TIMES article referenced in this excellent piece lamely tries to make the case that CA is well on the way to recovery. Interestingly, they closed the reader online comments two days later (I missed my chance to kick their ass around the block).
But the best part is the last paragraph:
"Yet the surest sign of a resurgent California might have been captured by observant Twitter posters last week in Southern California. There, Mr. Romney — he of California-is-Greece fame — was spotted one day at Disneyland and another pumping gasoline into his S.U.V. before returning to his beachfront home in San Diego to celebrate Thanksgiving week."
REALLY? THAT's the surest sign that CA is hunky dory???
What the NY TIMES conveniently omitted is that Romney's La Jolla home is a VACATION home -- his luxurious cabin in the woods. He does NOT live in CA, nor pay CA income taxes.
What the paper SHOULD have asked Romney was "How likely is it that that you will become a California resident and pay your 'fair share'?"
The guffaw of laughter from Romney would have been fun to post on the Internet as a video.
I'm surprised you didn't mention the change in accounting method from cash to accrual that is a large part of the projected move towards a surplus... that alone might be the most dangerous single item passed this year by the CA legislature because that false, temporary, accounting gain will be used politically to justify more spending. Of course, then the adjustment fades and the reality is another budget hole...
Brown could be a force of reason if he were able to reason and see the folly of overspending and spending on the wrong things.
He cannot, IMO. His HSR fiasco is proof, among other silliness he has and continues to embrace. He has little respect from the speakers of the state Senate and Assembly, who can overrule his veto at will. The super-majority position of Democrats makes the speakers the de facto government of the state, and they hunger for the power.
Brown is less even than a Republican, in the scheme of things.
The writer is a dreamer. CA, like the federal budget, has huge and unsustainabile liabilities that can't be funded thru more tax increases. In fact raising income taxes to 13 percent is a loser for small businesses. Watch for more major job losses in CA. Too many illegals, unions, regulations, and poor political leadership will doom CA.
One question that can indicate that California has snapped back to sanity, if only briefly: Have they killed the bullet train yet?
The fact that this no-brainer of a decision to kill this boondoggle hasn't happened yet is enough to worry anyone considering the future of the once golden state. So far, I've heard nothing from Brown that he intends to spike this monstrosity.
to expect Jerry brown to be fiscally prudent is nuts. Mr. gray does not recall the last brown admin.
While Democrats are in office, THE END IS NEAR !!
Of course, electing the First Rider of the White Horse Prophecy would have solved everything.
We know that income tax rates are the lowest they've been in most people's lifetimes. D'oh.
I'm no business analyst or business relocation specialist, but if the only thing preventing further tax hikes is Brown then California's troubles are only beginning. Plus there is good reason to doubt anyting written in the New York Times these days. Despite the blather in the Times California is not percieved in the business community as a place friendly to business.
Exactly what has California done over the last few years to make it more friendly to business? I haven't heard anything. The fact that some bottom may have been reached, which is probably temporary, means diddly-squat since no matter how bad things are, it can always get worse.
Exactly what does California now offer to a business looking to relocate? Does it have business friendly tax policies? That would be no. Does it have a reasonable regulatory climate? That would also be a definite no. How about local services? That would be tremedously expensive as a result of public unions. Crime? California loses there to. How about utilites? Well there are contant brown outs. Educated population? isn't California dead last, or second to last?
When you come right down to it all California does have is great weather - im some places. That's great except for the fact that most buildings these days are air conditioned. So what business cares about the weather especially when there are about a zillion other reasons to flee California or not move there in the first place?
California is terrible a place to do business, there are far better places elsewhere, make that anywhere. What global company would ever think of relocating there - what company in its right mind and with the best interests of its shareholders in mind would ever think of staying there?
California is fast spending the economic, political, social and cultural capital that tooks decades to accumulate. When it is gone, then the state will truly be a basket, a testbook example of what not to do. There will be no information revolution coming along to lift the state - those days are over. With the lunatics firmly in charge of the asylum and gaining in power (and adopting policies that discourage those that disagree with those policies from remaining), all California has to look forward to is slow decay as year by year decade by decade the state sinks. It isn't pretty and it won't be pretty.
Reining in spending is NOT a Brown skillset. Now know, not ever...He is a DEMOCCRAT!
Real Estate Prices will TOP OUT FROM 2018 TO 2022 AND YOU MUST SELL THEN.... IF NOT RIDE IT DOWN TO 2028
What avg income gringo wants to live in a state where spanish is the main language?
Things in California are set to deteriorate even more rapidly now that the Democrats have a supermajority in the Senate and Assembly. Taxes will be raised at every opportunity and no law will be too ridiculous to fail.
I am absolutely sure that Sacramento will move quickly to make life much, much worse for productive citizens in California.
I hope this author is correct. I have reasd him before, and he is smart and fair. But I am not taking any chances. After living here since 1972, my wife and I are leaving--just about any state is lower cost and more hospitable. I don't think we will be alone. Prop 30 will increase revenue for one year, and then anyone with any money (except the super rich) will have left.
I am very pessimistic that because Prop. 30 has become law, there is NO political will to fix the structural financial problems of California government. Gov. Brown is too firmly fixed in the debt of labor unions and other special interests to change this late in the game. Don't expect any meaningful changes.
Don't be decieved for a minute that the governor will "do the right thing." Even if he tried, the Dem. supermajority in the Legislature would not let him. The voters are that dumb that they return the same free-spending politicians to office, time and time again.
A hard lesson is needed, we all will crash and burn and MAYBE see the light.
Successful business will leave California for greener, more intelligent pastures. Successful individuals will leave California in greater numbers than ever, for greener pastures.
I, however will stay, it's my place, but I am very low income. There is no recovery in California. Prices are advancing stiffly. This article is a dream on a cloud.
You forget about the fact that a Dem. super majority can now override a Jerry Brown veto.
CALPERS is already knocking at his door.
If the point of your original article was how "California can regain its role as the nation’s most economically dynamic state" and was not part of a conservative "doom" chorus, why exactly did you write it for the New York-based Manhattan Institute, one of the house organs of the conservative California doom chorus? Just one big coincidence, I guess. Funny how that happens...