Thursday, April 30, 2009


The citizens of California often complain that their elected representatives do a poor job of managing the state budget. Hell, I complain about this all the time. A new Field Poll reported in today's San Francisco Chronicle makes the situation perfectly clear:

The citizens of California are nuts.

The poll reports that:
  • 67% of voters want to fix the budget through spending cuts, not tax increases.
  • 70% of voters want to keep the two-thirds majority requirement to increase taxes.
On the other hand:
  • By a roughly 3-to-2 ratio, Californians are NOT willing to raise taxes to balance the budget. Except on millionaires. Certainly no sales, gasoline or business tax increases.
I'm relieved to see that 53% of Democrats would favor paying higher taxes to fix the state budget; but that ain't enough to pass it. Eighty-one percent of Republicans oppose paying higher taxes.

The general consensus seems to favor sin taxes (booze, tobacco, and porn), and - get this - legalizing and taxing marijuana. 56% backed legal weed. It doesn't seem to have occurred to anyone that legalizing and taxing pot won't save the day, because - marijuana is a weed. It's extremely easy to grow in the back yard, and requires very little processing to make into your own tea, or even your own smokes - unlike tobacco. Once it's legal, there will be some market, but the main buyers will be people who either don't want to bother growing their own, or want the high quality weed produced by specialty growers. That isn't gonna cut it, folks.

Maybe it's my depression background, but it seems clear to me that if we want the services - and this poll makes it clear that we do want the services, especially public schools, public health, and higher education - We Have To Raise Taxes, including the income tax.

We pay the highest taxes in the country, you complain. Actually, I think New York is worse; but not by much. But - citizens of this country pay some of the lowest taxes in the world - particularly the gasoline tax. Europeans currently pay between $5.75 and $6 per gallon for gasoline - except the Netherlands, where it's $6.41.

You want to discuss taxes, talk to a Swede. Or a Frenchman. They pay the taxes, and they get the services.

So maybe the citizens of California are getting exactly the legislators they want. Sigh. I wonder how long it'll take all of them to grow up and realize that the money isn't going to fall out of the sky to fix this - even with what we're getting from the Obama stimulus package.


  1. Taxes are high in relation to--what?

    Americans have traditionally been a self-reliant people. During the 1990's, government and industry demanded sacrifice, and we gave it big-time. Lots of overtime. Americans work hard, as a people. Most folks only get/got 2 weeks vacation a year. Compare that to 2-3 months (!) a year for Western Europe. But the middle class hasn't shared in the fruits. The real buying power of the middle class has steadily shrunk over the last three decades. So what is it that our paying higher taxes is supposed to get us? Hundreds of billions go the banks and hamstrung corporations.

    So you wonder why people bitch about taxes? Because our taxes never end up coming back to us in service(s), that's why. Social Security benefits are now 40-60% lower than they were in real dollar terms two decades ago, because they keep reducing the tables.

    In India and China, most businesses pay little or no tax. Their governments protect their industries, and protect their workers with tariffs and "regulations."

    If Americans believed that their taxes actually amounted to something, then they might believe in a socialist society in which everyone shared the pain, and shared the gain.

    Unfortunately, in America, that hasn't been the case, for a long time.

  2. The thing that amazed me about the whole "tea party" hype is the feeling that no one is willing to pay their fair share.
    I have always thought a flat tax the way to go. Everyone pays a percentage of their income, no matter what it is. Of course we would need some way to calculate actual income vs. what people CLAIM as income.
    Taxes are the way the government makes money. I drive on the roads, I help pay for them through taxes. Why is that such a strange concept for people?

  3. To get out of this we're going to have to raise taxes and cut services. As a registered Libertarian it pains me to say this, but I can add and subtract. What I would very much like to see soon is something that Washington State and others already have - a constitutional prohibition on passing an unbalanced budget.

    I also wish that in general we would offload more of our tax burden onto sin and consumption taxes. We are human, and we regard taxes as punishments. That will never change. So tax bad things and things that we can do without so we can stop punishing saving and income, and instead punish (first and foremost) pollution and waste generation. I've lived in an area where you had to pay by the trash bag, and believe you me, you figure out ways to lower your trash generation. And that was in Pennsylvania 11 years ago.

  4. I thought California HAD a constitutional prohibition on passing an unbalanced budget. Unfortunately we also have a bunch of self-righteous yoyos arguing about the exact definition of "unbalanced."

  5. I was considering property taxes recently and looked up a list of state averages.

    Texas has no income tax.

    But Texas has the highest (tied for the highest) level of property taxes.

    For instance, the Texas property tax rate is about 1.8% (vs. about 0.5% in California for instance).

    Another significant tax is of course the sales tax. In a typical Texas city it comes out to be about 8.25%, of which 6.25% is state, and the rest various local entities.

    So, since an average home in Texas costs about 2.5x income (rough guess), the effective property tax is thus 2.5x1.8% or 4.5% (renters of course pay this also as a part of their rent that landlords must cover, etc.). Add to this base tax rate of about 4.5% the sales tax of about 8.25% to get the effective tax rate in Texas.

    But....while the freely spending household pays about 12-13% Texas taxes, it is possible here to live in a more frugal way and pay a lower tax rate if you save a lot of income, something which a state income tax doesn't allow so much.