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My family and I recently (as in, this week) left California for a state that doesn't require 10+% of our income to provide, as best I can tell, the same services - roads, schools, etc. My question: what on earth does California spend all the state income taxes on that other states don't need?
While I am indifferent to political correctness, the new state is blue too, so I'm not really soliciting mindless partisanship here. I would actually like to hear others' thoughts or information.
Thanks!
My family and I recently (as in, this week) left California for a state that doesn't require 10+% of our income to provide, as best I can tell, the same services - roads, schools, etc. My question: what on earth does California spend all the state income taxes on that other states don't need?
While I am indifferent to political correctness, the new state is blue too, so I'm not really soliciting mindless partisanship here. I would actually like to hear others' thoughts or information.
Thanks!
Despite California’s $54 billion budget deficit and $1 trillion unfunded pension liability, there are 340,390 government employees bringing home six-figure salary and pension checks.
...
Our auditors at OpentheBooks.com found truck drivers in San Francisco making $159,000 per year; lifeguards in LA County costing taxpayers $365,000; nurses at UCSF making up to $501,000; the UCLA athletic director earning $1.8 million; and 1,420 city employees out-earning all 50 state governors ($202,000).
Why California Is In Trouble – 340,000 Public Employees With $100,000+ Paychecks Cost Taxpayers $45 Billion
Will U.S. taxpayers bailout California? The state has a $54 billion budget deficit and $1 trillion in unfunded pension liabilities.www.forbes.com
My family and I recently (as in, this week) left California for a state that doesn't require 10+% of our income to provide, as best I can tell, the same services - roads, schools, etc. My question: what on earth does California spend all the state income taxes on that other states don't need?
While I am indifferent to political correctness, the new state is blue too, so I'm not really soliciting mindless partisanship here. I would actually like to hear others' thoughts or information.
Thanks!
Washington (0%)Care to tell us which state?
Don't worry, nobody from Cali is going to scour your new home state looking for you.
Washington (0%)
What bewilders me is that California's rate of income taxation of high income taxpayers is extremely high and raises a ton of revenues. I don't see that offset through reductions in other CA taxes (e.g., Prop 13 is a disaster, but because property values in CA are so high, property taxes are not actually cheap for the vast majority of homeowners). Washington sales taxes just aren't going to make up the difference (CA's are pretty high too anyway). I feel like the spending side in California has to be to blame, and there has to be (per capita) spending on some things that dwarf what other states spend, hence my inquiry.For one thing, WA isn't even seven and a half million people and it's a fraction of the size of Cali, too.
Smaller state, smaller budgets.
Plus, bear in mind that you WILL be paying other "taxes"...it's just that they don't call them taxes, they call them fees.
Washington also has one of the highest sales taxes in the country -- next to Louisiana, Alabama, Arkansas and Tennessee.
And Washington is #25 in property taxes.
Seattle tax attorney, Scott Edwards says, "the other aspect of affordable is not just the tax, but the cost of doing business, which in addition to taxes, regulations, permits makes it harder to build more housing, more office space, retail and that drives up rents as well."
If you earn $24,000 per year, it's estimated you spend 18 percent of your income on local taxes like sales, gasoline and property taxes. If you earn between $70,000 and 100,000 per year, it's estimated that nine percent of your income goes to local taxes.
What bewilders me is that California's rate of income taxation of high income taxpayers is extremely high and raises a ton of revenues. I don't see that offset through reductions in other CA taxes (e.g., Prop 13 is a disaster, but because property values in CA are so high, property taxes are not actually cheap for the vast majority of homeowners). Washington sales taxes just aren't going to make up the difference (CA's are pretty high too anyway). I feel like the spending side in California has to be to blame, and there has to be (per capita) spending on some things that dwarf what other states spend, hence my inquiry.
Depends how you look at it. If there is a share of the tax burden that is going to be covered by property taxes, Prop 13 divvies up that share in a way that is painfully unfair. Struggling to buy your first home? You pay 1% of the purchase price (which is a lot). Inheriting a home from daddy who bought it when he was young? You pay next to nothing. Prop 13 favors those who bought long ago (which was intended when it was passed) and those who inherit from them (which was not), at the expense of those who are buying now.I disagree with you on California's prop 13. Even if someone isn't grandfathered into the original deal, having a maximum cap of only 2% increase is a huge benefit to all homeowners who's properties are increasing. And even if they sell, the new buyer pays just 1% of the sale price (value) and then goes on to have the 2% max limit each year.
If California get rid of Prop 13 protections, landlords will have to exponentially increase rents in a state already with high rental prices.
Depends how you look at it. If there is a share of the tax burden that is going to be covered by property taxes, Prop 13 divvies up that share in a way that is painfully unfair. Struggling to buy your first home? You pay 1% of the purchase price (which is a lot). Inheriting a home from daddy who bought it when he was young? You pay next to nothing. Prop 13 favors those who bought long ago (which was intended when it was passed) and those who inherit from them (which was not), at the expense of those who are buying now.
The other aspect of Prop 13 that pains me is to shift funding from property taxation, which is relatively stable, to income taxation, which is not. A lot of the state's budget chaos (big surpluses, then radical spending cuts) come because property tax revenues are choked off due to Prop 13.
In terms of landlords, I don't know that that's true. Reworking property taxation from a current system that prefers homes held for generations to one that simply taxes based on current values (i.e., without artificially advantaging some owners over others based on length of ownership) does not inherently cut one way or another. If you quit forcing newer owners to subsidize older ones (by picking up their share of the property taxes), you'd probably change which people would hang onto properties, but not how much they would charge in rent. For example, in moving out of CA, I ran numbers on keeping our home and using it as a rental. The problem was that, because we bought our home in the not totao distant past, property taxes would have been a huge hit against what rental income could have brought. Had we inherited our home from a parent, the numbers would have looked different. And had California taken the same property tax revenues it is going to collect and just divvied up the burden fairly among all homeowners, it would have come out somewhere in between.
All just IMO. Your thoughts?
A couple of points:
First off the number of homes still taxed at the pre 1978 pre prop 13 rates that are grandfathered in are a much smaller percentage today they admit. So when they make it sound like it is a lot in that categegory, that just isn't true. After that EVERYONE benefits from the 2% annual cap no matter when they bought or for how much they paid. If that is removed then just as before prop 13 --- a lot of retired people on fixed incomes end up having to sell and where do they go? Retirement homes at 7-12k per month?
The current system actually is fair, but that state and the liberal legislature have always hated it because it limits their tax and spend ability. Buying a first home has always been difficult, but if you think it wasn't hard years ago, maybe you aren't as old as me. After my wife and were married in our 20s the interest rate on our fist home was 9.75% and you had to come up with 20% down, and in addition you could not get a home loan unless you could prove that no more than 25% of your gross income would go to paying the loan payments. That was a heavy lift for young people starting out. But I got to tell you, there were far less foreclosures then too. Young people started saving for their first home at age 18 if they were smart. I guess I would say you are really lucky to have inherited a home.
The thing about buying real estate is still the same. Location, Location, Location---- and TIMING. When someone says to make things "more fair for everyone", I generally suspect that is more about getting some folks off the hook from what people before them struggled to achieve. Prior to prop 13 many retired people were unable to keep up with exponential hikes in taxes due to skyrocketing real estate demand in that state--- so how was that fair to them? Some working class WW2 vet worked their whole lives for some stability and the state punishes them because everyone else is willing to pay way more than some property may be worth---many of them speculators with big banks behind them, and now grandma and grandpa have to sell and move to a trailer park in bum fook Nevada?
California just needs to be more fiscally responsible with the taxes they already get rather than driving everyone else out of the state or into bankruptcy and foreclosure. I'd say keep prop 13 and LOWER the ad vorlem rate for everyone and then tell Sacramento to be more responsible like other states have to do.
My family and I recently (as in, this week) left California for a state that doesn't require 10+% of our income to provide, as best I can tell, the same services - roads, schools, etc. My question: what on earth does California spend all the state income taxes on that other states don't need?
While I am indifferent to political correctness, the new state is blue too, so I'm not really soliciting mindless partisanship here. I would actually like to hear others' thoughts or information.
Thanks!
Oh....yeah...plenty of Cali folks headed up there, and Washingtonians may or may not be thrilled, but you'll do fine up there.
It's not like a Californian moving to Texas or anything.
My family and I recently (as in, this week) left California for a state that doesn't require 10+% of our income to provide, as best I can tell, the same services - roads, schools, etc. My question: what on earth does California spend all the state income taxes on that other states don't need?
While I am indifferent to political correctness, the new state is blue too, so I'm not really soliciting mindless partisanship here. I would actually like to hear others' thoughts or information.
Thanks!
This.Good question. If you want the short and sweet answer, the reason California keeps raising its taxes year on year is because California is desperate to fund its flagging pension system, which is presently just about two-thirds funded. Every time you hear a California Democratic politician at the municipal, county or state level saying we need to raise taxes for roads, for schools, for streetlamps, for hospitals, etc., it is almost always really about shoring up our government pensions. At the most generous, it is to make sure that the services in the other sectors are not cut so that pensions may continue to be funded. That's it.
That is why California roads are still pot-holed messes and our state civil services are nothing to write home about despite having a river of money flowing through our state's coffers that put many first-world nations to shame. If the money was actually paying for what it was originally allocated for, fair enough. But it is not. It is going towards mandatory payments for hundreds of thousands of retirees, and the State is looking to tax anything it can. In the near future, I could foresee the California Legislature trying to find some way to end the 1978 property tax law (Prop 13) so that property taxes can be assessed upon people's homes at Fair Market Value, sentencing elderly and disabled people living on fixed incomes to losing their homes, but garnering massive revenues for counties across the states.
Superficially, that makes sense and is consistent with what I have personally observed. Do you have data/citations to validate?Every time you hear a California Democratic politician at the municipal, county or state level saying we need to raise taxes for roads, for schools, for streetlamps, for hospitals, etc., it is almost always really about shoring up our government pensions.
Superficially, that makes sense and is consistent with what I have personally observed. Do you have data/citations to validate?
Washington, is a lot like NORDIC countries. The oil industry bouys them. In Washington, it is Microsoft, and airplane manu. Police , fire, etc are not free. ANY scheme to get the money NOT from HONEST taxation, read, income etc, comes out of the common mans pocket.Washington (0%)
I agree in part. I think all political movements, left unchecked, result in undesirable extremes. California is starting to show how that plays out with progressivism. The right is pouncing too quickly, as it always does in declaring California dead for the billionth time, but the problems are clearly coming to a head. As they emerge and grow, California currently has no politically viable response except more of the same, which is a cause and not a solution.The good news is that the old saying "as California goes, so goes the nation" is dead. California shows what progressivism does to a state, and you'd have to be insane to want that for the rest of the country.
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