California overfishing wealthy taxpayers
The once golden State of California continues its inexorable decline. The state motto still proclaims "Eureka..I have found it" while the decades long fiscal train wreck more accurately portrays California as the poster child for the entrenched criminal syndication between the public service and trade unions, and their hard left lapdogs. Not surprisingly, the Democrats currently control large majorities in both houses of the state legislature plus the governor's mansion.
SFGATE.com used the usual media spin on the continuing fiscal insanity that infects the governing class in Sacramento.
California's chief fiscal examiner said his independent analysis shows the state may collect $5 billion less in revenues than Gov. Jerry Brown has projected in his new $92.5 billion spending plan.
But Mac Taylor, the state's principal fiscal analyst as head of the Legislative Analyst's Office, said it is too soon to know whose projections are closer to reality - his or the governor's.
The disparity reflects how increasingly difficult it is to predict revenues in California.
The difference between the projections is due to estimates of the personal income tax revenue, specifically in the capital gains tax. A large initial public offering from Facebook and profits from other tech companies in the state could result in large capital gains collections, but Taylor said he did not know exactly what accounted for the administration's higher estimate.
The governor's plan relies on voters approving higher taxes in November in the form of a half-cent sales-tax increase and increased personal income taxes on the state's highest earners.
Ana Matosantos, director of the Department of Finance, .... said, "As both we and the analyst's office have indicated, revenue forecasting during this time of economic uncertainty is difficult. This is particularly the case when estimating the income of top earners."
She noted that high-income earners have the fastest growing income of all taxpayers during the economic recovery. The administration projects that capital gains earnings for taxpayers in California will be $96 billion in 2012, while the analyst projects the amount to be $62 billion.
So we now we have the picture as painted by the MSM. The budget discrepancies are due to the uncertainty of "estimating the income of top earners."
Rubbish! The governing class is again lying to the working taxpayers of California while the docile media spins their deception. The discrepancies are actually due to the uncertainties of estimating the number of high earners in California.
From Bloomberg we read:
Governor Jerry Brown's plan to balance the state budget in part with higher taxes on the wealthy depends on a group of top earners that shrank by one-third from 2007 to 2009.
Tax returns with adjusted gross incomes topping [over] $500,000 fell to 98,610 in 2009, the latest year available, from a recent peak of 146,221 two years earlier, according to data from the Franchise Tax Board, the state agency that collects income and corporate taxes.
California's share of top-earners has dwindled even as their numbers climbed nationally, according to Internal Revenue Service data. The Golden State accounted for 14.7 percent of the 553,381 returns over $500,000 filed in 1999. Ten years later, the state's share was 13.5 percent.
California's high taxes already prompt some top-earners to leave the state, according to Kevin McCarthy, a Republican congressman from Bakersfield.
"The more you chase away, the less you get," he said in a Jan. 9 interview.
About 154,000 people left [California] for other states in the fiscal year that ended July 1, continuing a trend that has seen 100,000 people a year leaving, according to the state's Finance Department.
Three of the top five states to which Californians have moved over the past decade - Nevada, Texas and Washington-[are states that] don't tax wages, according to Aaron Renn, an analyst who runs a website called urbanophile.com.
California is bleeding people like crazy to almost every state," Renn said. "Every time they leave, they take income with them."
Confiscatory taxation has already thinned the number of high-income earners in the Golden State below a hundred thousand as of 2009. Is there any doubt that number will be well below fifty thousand by 2014? High-income earners will always have the time, money and financial acumen to make intelligent decisions about their primary state residence.
As state taxes increase on those earning over $500,000 per year, the outflow of taxable citizens will also dramatically increase. This simple concept is well understood by the Democrats in Sacramento. It is their deliberate ideological choice to create wide spread fiscal instability. These ongoing financial crises have given form to socialist political policies that insure a continued majority of government-dependent voters.
One final thought. The Democrats hands-on expertise in turning the Golden State into the Welfare State will be coming to the entire county if Obama, armed with his Executive Orders, Signing Statements and recess appointments, is re-elected in November.