CALIFORNIA COMMITS SUICIDE
On November 6, Californians voted to destroy their state. Other than a brilliant piece by Charlotte Allen entitled “Decline and Fall” in The Weekly Standard, there has been almost no national media attention on this extraordinary event.
Over the last several years California has witnessed a mass exodus of industry and intellect. Some 200 successful businesses and thousands of entrepreneurs have fled this mecca of over-regulation, bounty-hunting attorneys, and over-taxation. California is reaping a bitter harvest, experiencing unemployment topping 10 percent. Rather than logically learn from last year’s lesson, a majority of the state’s legislators seem entirely unimpressed by that unemployment figure and are quite willing to make it grow much, much higher. They rejoice in passing ever more costly regulations and welfare benefits, exacerbating what is now the most inhospitable environment for business in the United States. The foreseeable consequences of California’s rush to regulate and tax everything are a significant worsening in the state’s unemployment rate, lower tax revenues despite tax increases, and great increases in the state’s debt due to mushrooming welfare and social services.
Responding to Governor Jerry Brown’s call for voters to endorse Proposition 30, a tax measure that picks the pockets of the rich and poor alike, a majority of them did just that. So extensive has state welfare become that a majority of voters asked the state not only to soak the rich but also to pick their own pockets. That is an extraordinary event. It reveals that welfare state programs are so addictive that, like heroin addicts, beneficiaries will hurt themselves on the promise of the next fix.
Proposition 30 promises to tax Californians into oblivion. Under Proposition 30, the state sales tax covering most goods will rise to about 10 percent (hammering the poor) and for those earning over $250,000 per year taxes will rise between 10.3 and 13.3 percent per year. Congratulations, California, before November 6 your Californians were taxed higher than citizens in every other state in the union, including Massachusetts, and you have managed to tax your beleaguered subjects even more.
It does not require genius to discern what happens next. Lots of folks who employ and who earn wealth in California have got to be thinking by now that they are not welcome in the golden state. They need only move a few miles outside of California to Nevada, Arizona, Idaho, or Utah to experience a very meaningful tax deduction. Although getting to that goal is more difficult for larger businesses, surely they will join some 200 other firms that left California last year in the hope of finding relief from overbearing government, taxation, and regulation.
Within a few short years California will be even more of a business wasteland with an even higher unemployment rate. It will become the perfect example of socialist government: knocking down everything that is above to achieve universal mediocrity (we are all equal, equally poor). As the businesses and entrepreneurs continue their exodus from the state, the ranks of the unemployed will grow ever larger. Tax revenues may rise initially but will be outpaced by the amounts that California will have to expend to pay for their already enormous, and growing, welfare society.
Subscribe to the NewsWithViews Daily News Alerts!
In her Weekly Standard article Charlotte Allen is quite right when she defines California as America’s Greece. California’s collapse will presage the collapse of the entire nation. It is as if California were a fiscal black hole into which all matter is being drawn into oblivion. Everything will come crashing down as revenues are so outpaced by debt that no one will trust the state to pay its bills. Contractors will look askance at California: If I enter into a multi-year contract with California to construct something will the state meet its obligation to me or will it default? Good bet, California will have no choice but to default.