Wednesday, January 27, 2010

Squeezing The Golden Goose

. . . till it can't lay any more eggs

By Douglas V. Gibbs

The State of Oregon is voting today on whether or not to tax more heavily the highest income earners, and to raise the corporate tax. The special election ballot measures 66 and 67 could be potential veto votes on a $733 million tax hike enacted by the Oregon State Legislature in 2009.

On July 20, 2009 Governor Ted Kulongoski signed two tax bills that will increase taxes in the state by $733 million through increasing the state’s corporate minimum tax, raising taxes on the state’s high-income individuals and raising income taxes on businesses. In response to the legislation a number of Oregon citizen and business groups went to work to use the veto referendum process in the state to try to stop the hikes.

Raising taxes, and making "business" the enemy, is the worst thing a state can do.

Let's look at the liberal paradise of California as an example.

The following is from Mish's Global Economic Trend Analysis:

-California has the 3rd highest state income tax in the nation: 9.55% tax bracket at $47,055 and 10.55% at $1,000,000.
-California has the highest state sales tax rate in the nation by far at 8.25%. Indiana is next highest at 7%.
-California corporate income tax rate is 17th worst in the nation with a rate of 8.84%. - However, of the non graduated states, only Pennsylvania at 9.99%, Rhode Island at 9.0%, and the District of Columbia at 9.98% are higher. One size fits all (and a very high one at that) is exceptionally hard on small businesses.

-California ranks 13th best in property taxes. However proposition 13 causes massive distortions for new buyers. (Without Proposition 13 limiting property tax amounts, we would probably be in the number 1 or 2 spot)

-California has the fourth highest capital gains tax 9.55%.
-California has the highest gasoline tax as of January 2010, averaging 65 cents/gallon. The national average is 47.4%.
-California has one of the highest state vehicle license car taxes, 1.15% per year on value of vehicle, up from 0.65% in 2008.

So where's the money going?

-1 in 5 in LA County receiving public aid, nearly 2.2 million people as of February 2009. 20% in Los Angeles County receive public aid.
-California has 12% of the nation’s population, but 36% of the country’s TANF (“Temporary” Assistance for Needy Families) welfare recipients – more than the next 8 states combined. Unlike other states, this “temporary” assistance becomes much more permanent in CA. July, 2009 California has more recipients in key welfare category than next eight states combined.
-California prison guards highest paid in the nation. The maximum pay of California's prison guards is nearly 40 percent higher than that of the highest-paid guards in 10 other states and the federal government, according to a study by the California Department of Personnel Administration.
-California teachers easily the highest paid in the nation.
-California now has the lowest bond ratings of any state, two steps above junk. The new rating affects about $72 billion of general obligation and lease-supported bonds.
-California ranks 44th worst in “2008 lawsuit climate.” Institute For Legal Reform
California, a destitute state, still gives away college education at fire sale prices. California community college tuition is by far the lowest in the nation. Nationwide, the average community college tuition is 4.5 times higher than California CC’s. This ridiculously low tuition devalues education to students – resulting in a 30+% drop rate for class completion. Moreover, 2/3 of California CC students pay no tuition at all – filling out a simple unverified “hardship” form that exempts them from any tuition payment, or receiving grants and tax credits for their full tuition.
-California offers thousands of absolutely free adult continuing education classes. In San Diego, over 1,400 classes for everything from baking pastries to ballroom dancing are offered totally at taxpayer expense. San Diego Continuing Education
-California residential electricity costs 13.81 cents per kilowatthour. The national average is 6.99-8.49. It costs 38% more to build solar panels in California than in Tennessee – which is why European corporations have invested $2.3 billion in two Tennessee manufacturing plants to build solar panels for our state. March 5, 2009 More Solar Companies Producing Elsewhere to Sell to California.

And with all of these liberal taxes and policies, guess what? California is broke.

-- Political Pistachio Conservative News and Commentary

Wrong time, wrong tax hikes: Vote no on Measures 66, 67 - Oregon Live

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