Wait, California has lower middle-class taxes than Texas?

[Visbek]

I have little doubt that much of the cause of California's housing crisis comes from wealthy landowners not wanting to loosen their chokehold on the limited supply of housing by allowing the promotion of more development.

It's not just wealthy people, it's most Californians. Rich people don't want affordable housing built in their backyards. Middle-class people want affordable housing, but not if it's going to mean a big tower built close to them. Poor and minority people want affordable housing, but don't want to lose their neighborhoods to gentrification.

Everyone hates paying taxes, which is why Prop 13 is a third rail for CA politics.

As much as I love the work of Professor Milton Friedman, he was not exactly an advocate for the interests of those living on fixed incomes who managed to purchase and pay off their homes during their working years....

Yeah, so here's the thing. Taxes have to get paid, one way or another.

Property taxes are not regressive, they're generally flat. As the value of the home rises, so does the tax payment. The only way you'll pay more taxes on your home is if the home increases in value.

Needless to say, the people living on fixed incomes would blow a gasket if the value of their home didn't at least keep up with inflation.

The problem that Prop 13 has created for CA is that tax revenues are too heavily based on things like sales and income taxes, which fall during a recession. As a result, revenues drop at exactly the time when the state needs to spend more. Sales taxes are the most regressive type of tax available.

Income taxes are progressive -- until they aren't. The ultra-wealthy now mostly get paid not with income, but with assets. For example, Zuckerberg makes a big deal of getting a $1 salary, but the real reason he does it is because the appreciation on his Facebook stock is so massive, and isn't taxed until he sells any stock. But instead of selling it, what he can do is borrow against it, and roll over those debts indefinitely. When he passes on, the estate can pay any outstanding debts by selling stock -- whose value resets when Zuckerberg passes on. (ProPublica is running a big series on the ways that the ultra-rich use these types of setups to avoid paying taxes.)

The only way I think such a proposal would be just is if the basis amount that folks paid on was capped at their original home purchase price with no further increase.

Meaning what, their property taxes effectively go down every single year? Thus forcing CA to figure out other, more regressive, ways to increase taxes? Pass.

That way an old widowed grandmother collecting Social Security and a small pension and who managed to buy and pay off a home that she and her husband paid $40,000.00 for it in Los Angeles in the 1970sand that is now worth $1,000,000.00 can remain in her neighborhood and pass it on to her descendants preserving the family wealth.

Meaning what, she should be able to increase her net worth by $960,000 and never pay taxes on it? Sorry, but that doesn't sound fair at all.

 

[Felis Leo]

It's not just wealthy people, it's most Californians. Rich people don't want affordable housing built in their backyards. Middle-class people want affordable housing, but not if it's going to mean a big tower built close to them. Poor and minority people want affordable housing, but don't want to lose their neighborhoods to gentrification.

Everyone hates paying taxes, which is why Prop 13 is a third rail for CA politics.


Yeah, so here's the thing. Taxes have to get paid, one way or another.

Property taxes are not regressive, they're generally flat. As the value of the home rises, so does the tax payment. The only way you'll pay more taxes on your home is if the home increases in value.

Needless to say, the people living on fixed incomes would blow a gasket if the value of their home didn't at least keep up with inflation.

The problem that Prop 13 has created for CA is that tax revenues are too heavily based on things like sales and income taxes, which fall during a recession. As a result, revenues drop at exactly the time when the state needs to spend more. Sales taxes are the most regressive type of tax available.

Income taxes are progressive -- until they aren't. The ultra-wealthy now mostly get paid not with income, but with assets. For example, Zuckerberg makes a big deal of getting a $1 salary, but the real reason he does it is because the appreciation on his Facebook stock is so massive, and isn't taxed until he sells any stock. But instead of selling it, what he can do is borrow against it, and roll over those debts indefinitely. When he passes on, the estate can pay any outstanding debts by selling stock -- whose value resets when Zuckerberg passes on. (ProPublica is running a big series on the ways that the ultra-rich use these types of setups to avoid paying taxes.)


Meaning what, their property taxes effectively go down every single year? Thus forcing CA to figure out other, more regressive, ways to increase taxes? Pass.



Meaning what, she should be able to increase her net worth by $960,000 and never pay taxes on it? Sorry, but that doesn't sound fair at all.

If I may, Visbek, I want to address your points, but I cannot help but wonder: are you a Californian homeowner?

 

[Phys251]

Red States do have lower taxes than blue States. Even your own data proves it.

You clearly haven't been to Texas in awhile. Toll roads everywhere, high state property taxes, both of which are regressive taxes.

 

[Felis Leo]

You clearly haven't been to Texas in awhile. Toll roads everywhere, high state property taxes, both of which are regressive taxes.

As far as I am concerned, high property taxes are a way to tell lower and lower-middle income earners “Guess what? Building inter-generational wealth is not for your kind.”

A great many of the homeowners in my area are made up of Mexican Immigrant farm laborers who put practically every penny from the sweat off their brow into purchasing and paying off their home. Low locked-in property taxes helped to enable that.

 

[Checkerboard Strangler]

True in 1940, and even more true today:

"California is a Garden of Eden,
a paradise to live in or to see,
but believe it or not,
you won't find it so hot
if you ain't got the do-re-mi."

-Woodie Guthrie

 

[Felis Leo]

True in 1940, and even more true today:

"California is a Garden of Eden,
a paradise to live in or to see,
but believe it or not,
you won't find it so hot
if you ain't got the do-re-mi."

-Woodie Guthrie

But hey, you know what would make living in California more affordable for lower and middle income Californians, Checkerboard Strangler? Raising residential property taxes.

-said no lower or middle income Californian homeowner ever.

 

[Checkerboard Strangler]

But hey, you know what would make living in California more affordable for lower and middle income Californians, Checkerboard Strangler? Raising residential property taxes.

-said no lower or middle income Californian homeowner ever.

Sorry friend but as someone who lived in North Texas for a decade, it's an illusion.
Property taxes are through the roof in Texas, and there's a surcharge or a toll for everything, you can barely leave your driveway at this point.
Even the tiny Klan-loving town I lived in, Mansfield (pop. 65000) converted a two track farm rut (SR 360 south of Camp Wisdom Rd.) and an old U.S. Highway (287) to toll roads.
There's almost nothing down there, but you'll pay the toll because 360 is the only real North-South highway that connects cities like Arlington and Mansfield to DFW Airport and all the industrial centers up in North Dallas. (the WHITE section north of I-30)

I guarantee you that you won't be talking about California property taxes once you get a taste of how Texas gets away with "no state income tax".
It's all bait and switch.

 

[Felis Leo]

Sorry friend but as someone who lived in North Texas for a decade, it's an illusion.
Property taxes are through the roof in Texas, and there's a surcharge or a toll for everything, you can barely leave your driveway at this point.
Even the tiny Klan-loving town I lived in, Mansfield (pop. 65000) converted a two track farm rut (SR 360 south of Camp Wisdom Rd.) and an old U.S. Highway (287) to toll roads.
There's almost nothing down there, but you'll pay the toll because 360 is the only real North-South highway that connects cities like Arlington and Mansfield to DFW Airport and all the industrial centers up in North Dallas. (the WHITE section north of I-30)

I guarantee you that you won't be talking about California property taxes once you get a taste of how Texas gets away with "no state income tax".
It's all bait and switch.

I was being sarcastic, CS. I will take our current taxation system over a system in which only California’s ultra wealthy and professional managerial class are able to purchase and keep their homes.

 

[Glitch]

You clearly haven't been to Texas in awhile. Toll roads everywhere, high state property taxes, both of which are regressive taxes.

So?

Are you incapable of grasping that there is more than one "red" State? They ALL have lower taxes and less crime than any "blue" State. Blue States are run by anti-American leftist filth who are always seeking to enslave their citizens under an oppressive government. Red States are run by rational, sane pro-Americans who are not flaming hypocrites.

 

[EMNofSeattle]

One of the big myths that Republicans like to sell us is that red states necessarily have lower taxes than blue states. The reality of the situation is much murkier.

Wait, California Has Lower Middle-Class Taxes Than Texas?

Wait, California Has Lower Middle-Class Taxes Than Texas?

www.bloombergquint.com

Texas has no state income taxes, but it has some of the highest property taxes in the nation.

The idea that Texas is a low-tax haven is only true for big corporations who reap too many of the benefits.

Is it that Texas actually has higher property taxes or that California has more residents not paying them? With prop 13 your taxes are locked and if you bought a home decades ago you are essentially paying on a value that that is decades old. If you look at the property tax rates if you bought a home today I doubt you’d save on property tax over Texas, especially because homes under 300,000 exist in most livable neighborhoods in Texas

 

[EMNofSeattle]

But hey, you know what would make living in California more affordable for lower and middle income Californians, Checkerboard Strangler? Raising residential property taxes.

-said no lower or middle income Californian homeowner ever.

My fiancé’s parents own their own home, they bought in a very not desirable neighborhood, but back when they bought it was cheap, now they got multiple unsolicited offers every week to buy it sight unseen for many multiples what they bought it for.

Not exactly upper class whites, they’re Mexican immigrants, I doubt they are clamoring to pay on what the home would assess for today. Just last year there was an attempt to weaken prop 13 and it went down in flames

 

[EMNofSeattle]

Sorry friend but as someone who lived in North Texas for a decade, it's an illusion.
Property taxes are through the roof in Texas, and there's a surcharge or a toll for everything, you can barely leave your driveway at this point.
Even the tiny Klan-loving town I lived in, Mansfield (pop. 65000) converted a two track farm rut (SR 360 south of Camp Wisdom Rd.) and an old U.S. Highway (287) to toll roads.
There's almost nothing down there, but you'll pay the toll because 360 is the only real North-South highway that connects cities like Arlington and Mansfield to DFW Airport and all the industrial centers up in North Dallas. (the WHITE section north of I-30)

I guarantee you that you won't be talking about California property taxes once you get a taste of how Texas gets away with "no state income tax".
It's all bait and switch.

Really? The klan is active in Mansfield Texas? What do they do? They do monthly pancake feeds? Have a Masonic lodge like meeting hall? I want to see evidence of this.

 

[EMNofSeattle]

Low property taxes encourage speculative behavior. If you make the tax negligible for landowners then there is little incentive for them to sell the property to those who will build homes.

to an extent yes a low property tax will encourage some people never to sell property if the cost of keeping it is low. That’s not an argument for LVT because

Actually, when the property tax is implemented as a land value tax they are the most progressive of all taxes. In fact, libertarians have advocated for it, including Milton Friedman and founder of the Libertarian Party, David Nolan. LVT discourages speculative behavior that actually drives up the costs of homes/property.

your LVT would have to be at a much higher rate then current taxes. If a home sits on a plot worth 300,000 dollars and the improvements are 100,000 dollars, to incentivize the land owner sitting on the empty lot to sell you would need to make the land value tax average the cost of a similar plot with a house, but which one? You’re just shuffling rates and numbers. It’s one of these ideas that seems brilliant on paper but at the end of the day it’s got many practical problems. It’s very telling that when Friedman got involved in Chile the economy went down by a lot and eventually Pinochet replaced miltons judgment with his own and the economy began to stabilize. There is no school solution or white paper proposal that actually works as theorized when it’s implemented.

The argument in favor of LVT is one of these, Milton’s ideology supposes humans are rational and respond to incentives that are “rational” but in reality they’re not. Many people who own an undeveloped parcel of property might sell if they paid a higher LVT, but they might not either. Some people may hold out for higher value, others may have emotional or sentimental connection to the land, someone could be saving it for future use, etc

 

[Visbek]

If I may, Visbek, I want to address your points, but I cannot help but wonder: are you a Californian homeowner?

Which of the statements in my post are true or false based exclusively on where I'm located?

I was being sarcastic, CS. I will take our current taxation system over a system in which only California’s ultra wealthy and professional managerial class are able to purchase and keep their homes.

Uhm... Yeah, the problem is that the current taxes haven't prevented an affordability crisis in California.

And again: Because property taxes are low in CA, the state taxes citizens in other ways, which are either more regressive (sales tax) or are easy for the ultra-wealthy to avoid (income tax). That's why property taxes are one of the least regressive options available to states.

 

[Phys251]

So?

Are you incapable of grasping that there is more than one "red" State?

Says the person who dismisses the expensive state of Texas despite its being right there in the OP.

 

[Geoist]

your LVT would have to be at a much higher rate then current taxes.

Of course it does. And the higher the rate the better. However, before any 'taxes bad' folks freak out, I think we should make the transition revenue neutral. That would mean having to lower taxes on other things (e.g. goods, services, income, etc.) The widow with the fixed income can roll her LVT if she cannot afford it.

The argument in favor of LVT is one of these, Milton’s ideology supposes humans are rational and respond to incentives that are “rational” but in reality they’re not. Many people who own an undeveloped parcel of property might sell if they paid a higher LVT, but they might not either. Some people may hold out for higher value, others may have emotional or sentimental connection to the land, someone could be saving it for future use, etc

Some will hold onto the land for sentimental reasons, sure. But those are usually people who hold only that property or very few property. I'm willing to bet the super wealthy who hold multiple properties are far less sentimental towards the land and far more sentimental to their net worth.

 

[Felis Leo]

It's not just wealthy people, it's most Californians. Rich people don't want affordable housing built in their backyards. Middle-class people want affordable housing, but not if it's going to mean a big tower built close to them. Poor and minority people want affordable housing, but don't want to lose their neighborhoods to gentrification.

Everyone hates paying taxes, which is why Prop 13 is a third rail for CA politics.

And I would argue that those who would seek to repeal Prop 13 are no friend of California's lower income or middle class homeowners or those who want to own their own land and lower their cost of living by paying off their personal residence, Visbek.

Yeah, so here's the thing. Taxes have to get paid, one way or another.

Property taxes are not regressive, they're generally flat. As the value of the home rises, so does the tax payment. The only way you'll pay more taxes on your home is if the home increases in value.

Needless to say, the people living on fixed incomes would blow a gasket if the value of their home didn't at least keep up with inflation.

The problem that Prop 13 has created for CA is that tax revenues are too heavily based on things like sales and income taxes, which fall during a recession. As a result, revenues drop at exactly the time when the state needs to spend more. Sales taxes are the most regressive type of tax available.

A few points.

These might all be good points, if California were facing a massive continuing budget crisis. But we are not. Due to multiple revenue streams, including the state income tax, gas tax, sales tax and, most importantly, the capital gains tax, we are running at a healthy surplus.

Second, property taxes which are free-floating and track home prices are extraordinarily regressive when property values increase rapidly in relation to one's income. If you have to pay 10%, 20%, or perhaps even 50% more in property taxes per year in property taxes due to increased market value of your property.

Finally, I would also point out that home values drop as well, and can lead to massive drops in revenue, as was seen in 2008 through 2010. So there is no ultimately stable source of revenue.

Income taxes are progressive -- until they aren't. The ultra-wealthy now mostly get paid not with income, but with assets. For example, Zuckerberg makes a big deal of getting a $1 salary, but the real reason he does it is because the appreciation on his Facebook stock is so massive, and isn't taxed until he sells any stock. But instead of selling it, what he can do is borrow against it, and roll over those debts indefinitely. When he passes on, the estate can pay any outstanding debts by selling stock -- whose value resets when Zuckerberg passes on. (ProPublica is running a big series on the ways that the ultra-rich use these types of setups to avoid paying taxes.)
Meaning what, their property taxes effectively go down every single year? Thus forcing CA to figure out other, more regressive, ways to increase taxes? Pass.
Meaning what, she should be able to increase her net worth by $960,000 and never pay taxes on it? Sorry, but that doesn't sound fair at all.

Oh I am well aware of these methods of tax avoidance. But it does not follow that because the ultra wealthy of silicon valley borrow against their stock ownership in order to avoid paying income or capital gains taxes that we should raise property taxes across the board.

 

[Felis Leo]

Meaning what, their property taxes effectively go down every single year? Thus forcing CA to figure out other, more regressive, ways to increase taxes? Pass.

More regressive? There is nothing more regressive than raising taxes on a person's dwelling, with the possible exception of taxing the air that they breath. Because people can generally find ways to lower their cost of living expenses through less consumption or finding cheaper alternatives. But they have no control over the value of their property. We are bleeding lower and middle-income residents because the cost of living in this state is already too high. And your solution to this would be raise property taxes, putting an even greater burden on those who have managed to attain home ownership? This is a good argument made on behalf of Blackrock, real estate investment trusts, and other private equity firms who will come in to purchase these expensive homes from the families who can no longer afford them due to raised property taxes. It is not an argument on behalf of lower and middle income homeowners or those who wish to become homeowners (or simply to remain homeowners) in a state with such rapidly increasing home prices. Being able to lock in costs enables homeownership and the beginning of wealth-building.

Meaning what, she should be able to increase her net worth by $960,000 and never pay taxes on it? Sorry, but that doesn't sound fair at all.

That is exactly what I mean. She paid off her home. She paid her dues. She should be allowed to retain ownership of her land at a non-onerous cost in spite of the rise and fall of the property value in order to be able to afford living in her neighborhood of choice and to build inter-generational wealth. That is the American Dream made all the more possible by Proposition 13. It is no more unfair than a Roth IRA is unfair or how Social Security payments being untaxed is unfair, whether the retiree has other sources of income or not. But your apparent solution to this perceived unfairness would be one in which only the already-wealthy and/or the professional managerial class are able to afford purchasing and keeping their homes. I want California to be a state in which everyone can afford to live, to purchase their homes and, just as importantly, to keep their homes. I would urge you to think of a more equitable solution that would not disproportionately impact California's house-poor lower and middle income earners.

Which of the statements in my post are true or false based exclusively on where I'm located?

I ask because your opinion seems to be borne out of a rather shallow understanding about our state's finances and how the lower and middle income residents (whether home owners or renters) of our state actually live and get by. Being a bankruptcy lawyer in California’s Central Valley, I have first-hand experience working with California’s poorest residents. And it may surprise you to know that many of them are homeowners. Mainly Mexican immigrants. And having dealt with people who were victimized by predatory HERO loan brokers, I can safely tell you that rapidly increased property taxes on poor and middle-income homeowners makes home ownership impossible.

Uhm... Yeah, the problem is that the current taxes haven't prevented an affordability crisis in California.

Indeed they haven’t. But repealing Proposition 13 would exacerbate the problem.

And again: Because property taxes are low in CA, the state taxes citizens in other ways, which are either more regressive (sales tax) or are easy for the ultra-wealthy to avoid (income tax). That's why property taxes are one of the least regressive options available to states.

Except in states where property values have increased at a rapid rate outpacing the rate of wage increases, in which case they are extraordinarily regressive. And you know they would be because you want the basis to rise with market value rather than the purchase price in order that the state and local governments may have more revenue. That is a poison pill solution in search of a problem.

 

[Visbek]

These might all be good points, if California were facing a massive continuing budget crisis. But we are not.

Did you already forget 2008?

2008–2012 California budget crisis - Wikipedia

en.wikipedia.org

Due to multiple revenue streams, including the state income tax, gas tax, sales tax and, most importantly, the capital gains tax, we are running at a healthy surplus.

Funny how those "multiple streams" didn't work at all in 2008.

The only reason CA is doing well right now is because the stock market went off the rails.

Second, property taxes which are free-floating and track home prices are extraordinarily regressive when property values increase rapidly in relation to one's income.

No, they're not. They're just more accurately tracking your wealth.

Finally, I would also point out that home values drop as well, and can lead to massive drops in revenue, as was seen in 2008 through 2010. So there is no ultimately stable source of revenue.

Property taxes are one of the most stable sources of tax revenue. Home values rarely drop; the 2008 recession was a huge exception. They didn't drop during the 1991 or 2001 recessions. In fact, prior to 2008, the biggest drop in property tax revenue in CA was... the implementation of Prop 13.

Oh I am well aware of these methods of tax avoidance. But it does not follow that because the ultra wealthy of silicon valley borrow against their stock ownership in order to avoid paying income or capital gains taxes that we should raise property taxes across the board.

Well, if you want to set up a progressive property tax, go for it. Good luck with that.

 

[Visbek]

More regressive? There is nothing more regressive than raising taxes on a person's dwelling....

Yes, there is.

Sales taxes are probably the most regressive type of tax. The lower your income, the more you spend on goods and services, the more you get taxed. Plus, the wealthy can often avoid sales taxes by shopping areas with lower sales tax rates.

Consumption taxes are also regressive, for the same reasons.

Same with tariffs.

Excise taxes on goods heavily used by lower-income individuals (such as cigarettes) wind up being regressive.

The same goes for fees linked with criminal penalties.

User fees (such as fees to use parks or public golf courses) are, yes, regressive. As already noted in this thread, Texas residents are often hit with these types of fees.

Income taxes are typically designed to be progressive. However, they can end up being regressive, when the laws include loopholes to allow high earners to avoid them.

And again... property taxes are a type of wealth tax. If your taxes go up, that's because you've gained more wealth. By definition, that's not "regressive."

But they have no control over the value of their property. We are bleeding lower and middle-income residents because the cost of living in this state is already too high.

Actually, that's a bit of a myth.

Despite popular belief, California residents are not fleeing the state in droves, new survey finds

University of California researchers said the "Cal exodus" is a myth and that residents are not moving out of the state in unusual numbers.

www.businessinsider.com

Further, anyone leaving CA because of unaffordable housing will be in for a big shock, because the lack of affordable housing is a national problem, not a California problem.

And your solution to this would be raise property taxes, putting an even greater burden on those who have managed to attain home ownership?

No, actually, it is to REBALANCE the tax structure. Increase property taxes AND reduce other types of taxes such as sales taxes. CA could also afford to make its income tax more progressive.

This is a good argument made on behalf of Blackrock, real estate investment trusts, and other private equity firms who will come in to purchase these expensive homes from the families who can no longer afford them due to raised property taxes.

...except that those entities will have to pay more taxes on those properties.

In fact, the current setup is beneficial for real estate investors, because it reduces their tax burdens.

It is not an argument on behalf of lower and middle income homeowners or those who wish to become homeowners (or simply to remain homeowners) in a state with such rapidly increasing home prices.

Dude.

CA has both low property taxes and unaffordable housing. It should be screamingly obvious that property taxes are not what is causing that problem.

She paid off her home. She paid her dues....

She paid the people who loaned her the money. That doesn't mean she paid her fair share of taxes. You want to give her a free ride.

We should also note that there are tens of millions of Californians who aren't living on a fixed income.

Oh, and California already has a property tax relief program for seniors and disabled individuals.

That is the American Dream made all the more possible by Proposition 13.

Then why are you saying that "Californians are leaving in droves?"

It is no more unfair than a Roth IRA...

Funny you should mention that.

Lord of the Roths: How Tech Mogul Peter Thiel Turned a Retirement Account for the Middle Class Into a $5 Billion Tax-Free Piggy Bank

Roth IRAs were intended to help average working Americans save, but IRS records show Thiel and other ultrawealthy investors have used them to amass vast untaxed fortunes.

www.propublica.org

And having dealt with people who were victimized by predatory HERO loan brokers, I can safely tell you that rapidly increased property taxes on poor and middle-income homeowners makes home ownership impossible.

What the what? HERO loans aren't an extra tax, they're just paid with the property tax bill. Even your own article suggests that the state is cracking down on unscrupulous contractors, and that lots of people just didn't understand what they were signing.

Or perhaps you think that a charge for $50 is somehow more expensive when it's on your tax bill, rather than invoiced directly?

 

[mrjurrs]

People seem to be unaware that states have to fund their expenditures somehow.

...and most are even less aware that the big 'liberal' states are helping to fund their low tax high services states. Who owns who?

 

[mrjurrs]

Did you already forget 2008?

2008–2012 California budget crisis - Wikipedia

en.wikipedia.org

Funny how those "multiple streams" didn't work at all in 2008.

The only reason CA is doing well right now is because the stock market went off the rails.


No, they're not. They're just more accurately tracking your wealth.


Property taxes are one of the most stable sources of tax revenue. Home values rarely drop; the 2008 recession was a huge exception. They didn't drop during the 1991 or 2001 recessions. In fact, prior to 2008, the biggest drop in property tax revenue in CA was... the implementation of Prop 13.

The 2007–2008 Financial Crisis in Review

Learn more about the causes, the events, and the aftermath of the 2007–2008 financial crisis and the Great Recession that followed it.

www.investopedia.com

Well, if you want to set up a progressive property tax, go for it. Good luck with that.

Yeah CA was bad in 2008, when the rest of the world was booming...
"KEY TAKEAWAYS

• The 2007-2009 financial crisis began years earlier with cheap credit and lax lending standards that fueled a housing bubble.
• When the bubble burst, financial institutions were left holding trillions of dollars worth of near-worthless investments in subprime mortgages.
• Millions of American homeowners found themselves owing more on their mortgages than their homes were worth.
• The Great Recession that followed cost many their jobs, their savings, or their homes.
• The turnaround began in early 2009 after the passage of the infamous Wall Street bailout kept the banks operating and slowly restarted the economy."

The 2007–2008 Financial Crisis in Review

Learn more about the causes, the events, and the aftermath of the 2007–2008 financial crisis and the Great Recession that followed it.

www.investopedia.com

 

[Visbek]

Yeah CA was bad in 2008, when the rest of the world was booming...

Uh... You missed the point.

The State of California's budget was sent into a tailspin by the 2008 recession, which forced Jerry Brown -- who was considered one of the most liberal politicians in the US -- to slash state budgets to the bone.

One reason why CA's budget was hit so badly was because... wait for it... CA has low property taxes. Normally, property taxes are among the most stable sources of revenues for states. Instead, CA relies heavily on the types of taxes that drop significantly during a recession, notably sales and income taxes.

See the relevance now?

 

[mrjurrs]

Uh... You missed the point.

The State of California's budget was sent into a tailspin by the 2008 recession, which forced Jerry Brown -- who was considered one of the most liberal politicians in the US -- to slash state budgets to the bone.

One reason why CA's budget was hit so badly was because... wait for it... CA has low property taxes. Normally, property taxes are among the most stable sources of revenues for states. Instead, CA relies heavily on the types of taxes that drop significantly during a recession, notably sales and income taxes.

See the relevance now?

I disagree. The tailspin came from the same thing that caused it elsewhere. A frozen credit market reacting to massive built in market fraud.

CA's property taxes are artificially low because the R's were shilling for corporations 50 years ago (prop 13) just as they are today. Low sales taxes? I pay 8.25% where I live. CA was hurt more than other US states due to our int'l exposure to the global crunch imo.

 

[Sagittarius83]

Last place I lived in the US was Salt Lake City and West Valley was absolutely infested with California gangs and crime.

To me this is not about taxes but the infection California culture is spreading to every US state west of the Rocky Mountains.

California is routinely rated as the fifth to the seventh largest economy in the world so the US puts up with it. But it is the most uneven demographic I have ever seen.