Article from Reason by Steven Greenhut.
We actually are discussing whether the government should allow the existence of billionaires. Here is an economic conundrum. The progressive experiment depends on wealthy people’s continued economic success. California, which smugly touts itself as the national resistance to the Trump administration, is particularly dependent on tax revenues from billionaires and capital gains taxes. Earth to Ocasio-Cortez and others who share her views: Those universal healthcare proposals that California Democrats are cooking up could not move forward if not for the large share of wealthy people existing in the Golden State.
A CNBC News report from late December focused on how that month’s stock-market drops were “very bad news” for California’s state budget. The market has largely recovered, but the article noted a fact we should all keep in mind: “(T)he state’s top 1 percent of personal income tax earners—roughly 164,000 tax returns—generate about half of the personal income taxes in California.” That sounds like they are paying well beyond their “fair share.”
No wonder the Franchise Tax Board zealously polices whether high-income Californians who claim to have moved out of state actually have moved their permanent residences elsewhere. No wonder state officials noticed when 138 residents fled after voters approved Proposition 30 tax increases in 2012. That is a small number in a state with nearly 40 million people, but it matters if they are particularly wealthy. Last year, even Democratic legislators expressed concern after the federal tax bill reduced deductions for wealthy Californians.
This progressive approach to income taxes is reminiscent of their approach to tobacco taxation. They want fewer billionaires to exist and want to level the playing field by approving punitive, confiscatory tax rates. Every time they increase these income-tax rates, however, the state becomes more dependent on the revenue from the wealthiest people. Likewise, lawmakers pass more tobacco taxes to discourage smoking, but instead the states have become addicted to tens of billions of dollars in revenue from their sales. A CBS report from 2012 found that only 3 percent of the money from taxes and settlements were funding anti-tobacco programs.
Read the entire article at Reason.
Image Credit:Â By Pax Ahimsa Gethen [CC BY-SA 4.0 (https://creativecommons.org/licenses/by-sa/4.0)], from Wikimedia Commons
wpDiscuz
California, as a state, is so chaotic and divisive it reeks of anarchy (and don’t forget the feces and urine). It really should repay $3.5 billion for the cancelled high speed rail project because that money belong to every tax payer in the country. I suspect the new governor (who made a giant mess of Frisco as mayor) will waste the money someplace else.