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Please pass this article to your friendly Governor and legislators. There is an answer to the fiscal crisis facing California.
1. Diversity of jobs - accountants over homebuilders.
2. It pays to be friendly to business owners. "It is easy to see why. Professor Bill Watkins, who heads the Center for Economic Research and Forecasting at California Lutheran University notes that unlike California, Texas has no personal income tax, personal capital gains tax, or corporate income tax. "This is in huge contrast to California's tax structure," he says, adding that overall, Texans also just pay less in taxes of any stripe.
The union situation in Texas is also far different. While only about 6% of workers in Texas are covered by unions, the Federal Bureau of Labor Statistics puts the figure at more than 18% in California. Texas also has a lower minimum wage and lower land prices."
3. Taxing sales instead of income distorts the economy less and allows for more flexibility. "California's focus on progressively taxing income and profits instead of consumption has helped to exasperate the pain of California's state budget shortfalls. Unlike sales taxes, which contribute mightily to Texas's annual budget, taxes on income and capital are extremely volatile, closely tracking the country's economic swings and often overshooting them. That creates two big problems: It makes it difficult to plan correctly when faced with long-term spending needs, and in boom times, it makes it hard for legislators to deny unsustainable spending increases desired by voters."
4. Power of the people can backfire. "But that volatility and the deficits it creates could possibly be tackled if it wasn't for the empowerment of California's voters, who gained a major taste of victory in the Proposition 13 tax revolt back in 1978 and never looked back. Since then, California voters on both ends of the political spectrum have used their clout to approve scores of initiatives. They have enacted term limits, raised the minimum wage, moved to protect wildlife and acted to foster English as the state's official language."
What backfired is that Sacramento refused to cut spending and run efficient programs. Instead, the politicians sold out to unions and other special interests. The people were right; it is government that is wrong.
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1. Diversity of jobs - accountants over homebuilders.
2. It pays to be friendly to business owners. "It is easy to see why. Professor Bill Watkins, who heads the Center for Economic Research and Forecasting at California Lutheran University notes that unlike California, Texas has no personal income tax, personal capital gains tax, or corporate income tax. "This is in huge contrast to California's tax structure," he says, adding that overall, Texans also just pay less in taxes of any stripe.
The union situation in Texas is also far different. While only about 6% of workers in Texas are covered by unions, the Federal Bureau of Labor Statistics puts the figure at more than 18% in California. Texas also has a lower minimum wage and lower land prices."
3. Taxing sales instead of income distorts the economy less and allows for more flexibility. "California's focus on progressively taxing income and profits instead of consumption has helped to exasperate the pain of California's state budget shortfalls. Unlike sales taxes, which contribute mightily to Texas's annual budget, taxes on income and capital are extremely volatile, closely tracking the country's economic swings and often overshooting them. That creates two big problems: It makes it difficult to plan correctly when faced with long-term spending needs, and in boom times, it makes it hard for legislators to deny unsustainable spending increases desired by voters."
4. Power of the people can backfire. "But that volatility and the deficits it creates could possibly be tackled if it wasn't for the empowerment of California's voters, who gained a major taste of victory in the Proposition 13 tax revolt back in 1978 and never looked back. Since then, California voters on both ends of the political spectrum have used their clout to approve scores of initiatives. They have enacted term limits, raised the minimum wage, moved to protect wildlife and acted to foster English as the state's official language."
What backfired is that Sacramento refused to cut spending and run efficient programs. Instead, the politicians sold out to unions and other special interests. The people were right; it is government that is wrong.
More...