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By Richard Rider, Chairman, San Diego Tax Fighters
August 21, 2009 (San Diego) -- Here’s a depressing comparison of California taxes and economic climate with the rest of the states. The news is breaking bad, and getting worse (I keep updating this article):
California has the 2nd highest state income tax in the nation: . 9.55% at $48,000. 10.55% at $1,000,000
Our state is by far the highest state sales tax in the nation. 8.25% (not counting local sales taxes)
We have the highest state car tax in the nation – at least double any other state. 1.15% per year on value of vehicle.
Our corporate income tax rate is the highest in the West. 8.84%
California’s 2009 Business Tax Climate ranks 48th in the nation.
http://www.taxfoundation.org/research/topic/15.html
We have the fourth highest capital gains tax 9.55%
http://www.thereibrain.com/realestate-blog/capital-gains-tax-rates-state...
We also have the highest gasoline tax (averaging 64.5 cents/gallon) in the nation (July, 2009). When gas hits $3.00/gallon, we are numero uno – because unlike many states, we charge sales tax on gasoline purchases (built into the price).
http://www.api.org/statistics/fueltaxes/
Our state has the fourth highest unemployment rate in the nation. (July, 2009) 11.9%. National rate 9.4%.
http://www.bls.gov/news.release/laus.nr0.htm
California’s 2009 “Tax Freedom Day” (the day the average taxpayer stops working for government and start working for oneself) is again the 4th worst date in the nation – up from 28th worst in 1994.
http://www.taxfoundation.org/research/show/387.html
To offset lower state revenues, 29 states are proposing 2009 state tax and fee increases totaling $24 billion. California, with 12% of the nation’s population, is proposing 47% of that increase (6/5/09).
http://money.cnn.com/2009/06/04/news/economy/states_budget_crises/index.htm
One in five in Los Angeles County is receiving public aid.
http://www.latimes.com/news/local/la-me-welfare22-2009feb22,0,4377048.story
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 7 states combined. Unlike other states, this “temporary” assistance becomes much more permanent in CA.
http://weblog.signonsandiego.com/weblogs/afb/archives/034662.html
California prison guards are the highest paid in the nation.
http://www.caltax.org/caltaxletter/2008/101708_fraud1.htm
California teachers are easily the highest paid in the nation.
http://www.nea.org/home/29402.htm (California has the second lowest student test scores)
California now has the lowest bond ratings of any state, edging out Louisiana.
http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2009/03/19/BA7F16JLKH.DTL
California ranks 44th worst in “2008 lawsuit climate.”
http://www.instituteforlegalreform.com/component/ilr_featured_tools/29/i...
In 2005 (latest figures), for every dollar Californians sent to D.C. in taxes, we got back 78 cents – 43rd worst.
http://www.taxfoundation.org/taxdata/show/22685.html
America’s top CEO’s rank California “the worst place in which to do business” for the fourth straight year (3/2009). But here’s the interesting part – they think California is a great state to live (primarily for the great climate) – they just won’t bring their businesses here because of the oppressive tax and regulatory climate.
Consider this quote from the survey (a conclusion reflected in the rankings of the characteristics of the state): “California has huge advantages with its size, quality of work force, particularly in high tech, as well as the quality of life and climate advantages of the state. However, it is an absolute regulatory and tax disaster.”
http://tinyurl.com/cyvufy
California, a destitute state, still gives away college education at fire sale prices. Our community college tuition is by far the lowest in the nation. How low? 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. In addition, 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.
http://www.sacbee.com/static/weblogs/capitolalertlatest/020722.html
http://www3.signonsandiego.com/stories/2009/jun/29/1n29fees225829-two-ye...
On top of that, California offers thousands of absolutely free adult continuing education classes – a sop to the upper middle class. In San Diego, over 1,400 classes for everything from baking pastries to ballroom dancing are offered totally at taxpayer expense.
http://www.sdce.edu
California residential electricity costs an average of 35.4% more than the national average. For industrial use, CA electricity is 56.2% higher than the national average (2007).
http://www.eia.doe.gov/cneaf/electricity/epa/fig7p5.html
http://www.eia.doe.gov/cneaf/electricity/epm/table5_6_a.html
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.
http://www.foxandhoundsdaily.com/blog/jack-stewart/more-solar-companies-...
Consider California’s net domestic migration (migration between states). From April, 2000 through June, 2008 (8 years, 2 months) California has lost a NET 1.4 million people. The departures slowed this past year only because people couldn’t sell their homes.
http://www.mdp.state.md.us/msdc/Pop_estimate/Estimate_08/table5.pdf
These are not welfare kings and queens departing. They are the young, the educated, the productive, the ambitious, the wealthy (such as Tiger Woods), and retirees seeking to make their pensions provide more bang for the buck. The irony is that a disproportionate number of these seniors are retired state and local government employees fleeing the state that provides them with their opulent pensions – in order to avoid the high taxes that these same employees pushed so hard through their unions.
As taxes rise and jobs disappear, we lose our tax base, continuing California’s state and local fiscal death spiral. This spiral must stop NOW.
Richard Rider is chairman of San Diego Tax Fighters and founder of the conservative blog www.RichardRiderRant.blogspot.com.
The opinions expressed in this editorial reflect views of the author and do not necessarily reflect the views of East County Magazine. To submit an editorial for consideration, contact editor@eastcountymagazine.org.
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