Gray Davis and the California democrats have done it again: California is on the edge of bankruptcy. Apparently all those “progressive” social programs couldn’t survive the recession.
Personally, I’m glad. Those stupid democrats have dug themselves into this hole, and I hope they feel the pain on the way out. After all, CA is unionized to hell, and they will have to convince all those teachers and state workers to take massive pay cuts /lay offs.
Either that, or raise taxes. But higher taxes will scare away even more business, digging them into an even bigger hole. Either way, California is screwed. Apparently, the highly progressive tax system in CA had a part to play:
“California prides itself on its progressive income tax, with people earning high incomes paying a huge share of state taxes. The top 10 percent of filers pay 75 percent of personal income taxes. But when their income drops, as it did when the technology boom went bust in early 2000, the state treasury crashes.”
It seems that you can’t milk the rich for all the’re worth after all. The Dems are still clueless though:
“Mr. Wesson, the Assembly speaker, said it was “mathematically impossible” to balance the state budget without raising taxes.
“The way you do it is to put absolutely everything on the table, every conceivable cut, every conceivable way to raise taxes,” he said. “Then you sort out what is the least painful and what is the most fair.”
The likely outcome, I think, is that taxes will go up, and many of California’s businesses will go away. NYC’s tax hike had (and will have) much the same effect. I’m hopeful that NYC and CA will learn a lesson from this, but somehow, I doubt it. Nevertheless, the lesson is not lost on all, as thisUSA Today story from a while back shows