In a daily feature it calls “California Today,” the New York Times expresses concern over the impact of stock market declines on California’s wealthy. It is not out of concern that risk-takers will be disincentivized from making future investments, however. Matt Stevens and Julie Turkewitz write:

California has one of the highest top tax brackets in the country, and the state relies heavily on those top earners to fill its coffers. (In 2014, the top 1 percent of earners paid 48 percent of all state income taxes in California, according to a 2016 article in the Economist.)

“Since the top 1 percent of Californians own a lot of stocks, a stock market decline that results in lower capital gains could have a disproportionately large impact on California – and its state budget,” [UC Berkeley professor] Dr. Vissing-Jorgensen  said.

In order to sustain the fabulously generous welfare state in California, a magnet for illegal immigrants, incidentally, California must watch out for the fate of its top one percent.  Capital gains are taxed at ordinary income rates, which for the wealthy means 13.3%. If and when the stock market goes into a sustained decline, California will see its tax revenues precipitously crash.

In effect, California’s enormous underclass – the state has the highest percentage of its population living in poverty of any state – is now held hostage to the fortunes of its wealthiest residents. Save the poor by helping the rich!