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The state is going from a $97 billion surplus (thanks US taxpayers for all that free stimulus money!) to a $25 billion deficit in a single year.
This is what happens when your tax rates are so progressive that literally half of the state's income tax revenue is paid by 1% of the taxpayers. If the stock market goes down and they have a bad year, the state goes broke. And when they flee the state (as they are doing in droves) to places like TX and FL which have no personal income tax, it hurts the state even more.
The Dems who runs the state could widen the tax base, but that might cost them an election. So forget that.
This is what happens when your tax rates are so progressive that literally half of the state's income tax revenue is paid by 1% of the taxpayers. If the stock market goes down and they have a bad year, the state goes broke. And when they flee the state (as they are doing in droves) to places like TX and FL which have no personal income tax, it hurts the state even more.
The Dems who runs the state could widen the tax base, but that might cost them an election. So forget that.
Budget whiplash: California faces $25 billion deficit
California could see a budget deficit of $25 billion next year, a stark change from the unprecedented surpluses of the past two years.
calmatters.org