Saturday, June 30, 2012

California: Political Sinkhole of the West

Anyone who follows politics in California knows that the republicans are fighting a losing battle.  Jerry Brown is again going to the taxpayers to bail out the state.  To add insult to injury the 2012-2013 budget bill he just signed includes revenues of $8.2 billion that will come from his tax initiatives "IF" they pass.

There are many ways that we can paint this picture.  First of all, if history is any indication of the failures of the past, higher taxes do not raise revenues.  It usually has the opposite effect.  When Illinois passed a tax increase in last year, revenue went down faster than a roller coaster at Disneyland. There is only so much you can do to tax your way out of trouble.  Business's and people have moved to neighboring states where the tax burden is lower and the business environment is pro-active.  This is the exact same thing that has been happening in California for the past few years.  Business's are leaving at the rate of five a week and this is not the worst of it.  California has ranked at the bottom of the least friendly state to do business eight years running according to Chief Executive magazine.  And as the taxes and regulatory burden increases more and more people are leaving the state for friendlier pastures. You know when things are getting worse when you see other states putting up billboards in your state.

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