Monday, December 10, 2012

California's (& France's) Soak The Rich Scheme Not Quite Working Out As Planned (Updated)

At the urging of unions and the left, Californians recently passed Prop 30, raising state taxes on high earners to the highest in the nation. The left assured voters that the danger of high earners and businesses abandoning California in light of Prop 30 was ridiculous scaremongering. Gov. Brown even commissioned sage academic studies from sociologists at Stanford University to prove it.

This from Breitbart:

California State Controller John Chiang has announced that total state revenue for the month of November 2012 fell $806.8 million, or 10.8%, below budget.

Democrats thought they could hammer “the rich” by convincing voters to pass Proposition 30 to create the highest state income tax in the nation. But it now appears that high income earners have already “voted with their feet” by moving themselves and their businesses out of state, resulting in over $1 billion shortfall in corporate and income taxes last month and the beginning of a new financial crisis.

Who would have guessed that economics trumps sociology. Perhaps Gov Brown should have gotten a Stanford economist of some note to advise the state.

But hey, its not all bad for economy of deep blue California:

As panic spreads that goosing taxes on the rich may have created enough “tax flight” that the California will actually collect less taxes, there was welcome news that a business had committed to opening in the State. Executives of the 99 Cents Only Stores Inc. proclaimed they would be opening a new location in Beverly Hills on formerly posh Rodeo Drive.

Somewhere (probably in Texas), John Galt is laughing uncontrollably.

Here is my one red line. Any attempt to use our tax dollars to bail out failed blue states should be the clarion call for a second civil war. No more of this. The left needs to live with the consequences of their decisions or they will happily bleed us dry. California is one of several states that needs to go into bankruptcy, with all of their union contracts broken, their ridiculous public sector pensions slashed, and their environmental laws removed from the books.

I am going to make a new label for posts of this ilk - "I told you so." I imagine it will get very long between now and 2016.

Update: France is experiencing the same issues as California, as rich frogs hop over the border to Belgium in order to avoid the new, draconian 75% wealth tax recently imposed by France's socialist government. Gerard Depardieu is the latest to go Gault, leading the socialist mayor of Paris to express sorrow at Depardieu's lack of "generosity." So it is now "generosity" when a person is forced to pay taxes at the point of a government gun. The left are insane.

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