May 13th, 2012

#3364: California re-proves the Laffer Curve

By raising taxes, they managed to "decrease" their deficit from $9 billion to $16 billion in five months.

So in spite of raising taxes, California's budget deficit has gotten larger rather than gotten smaller. I wonder why that is?

And of course Brown's solution is more taxes! "Brown has said there will be even deeper cuts...if voters do not improve tax hikes in November. He is seeking a quarter-cent increase in the state sales tax for four years and a seven-year hike on incomes of $250,000 or more...."
Fortunately for Brown, it's not like people can chose to leave or move their businesses to other states. Oh. Never mind.
In 2011, 254 California companies moved some or all of their work and jobs out of state, 26% more than in 2010, according to Irvine business consultant Joe Vranich who has been tracking these departures since 2009.

The pace is accelerating, Vranich said. An average of 4.9 businesses left California each week of 2011, compared to 3.9 per week (202 total) in 2010 and one a week (51 total) in 2009."
Yeah, if you make it cost too much to do business in your state, guess what happens? Simple fact is, California (like the United States in general) has a spending problem, not a revenue problem. You can raise taxes as high as you want, and it won't fix the problem that you are spending too much money...and if you raise taxes too high you begin to interfere with the economic machinery that generates all that revenue in the first place.

One potential line item California can do without, as Doug Powers notes, is the idiotic high-speed railroad that will link two small towns, each of which happens to be within an hour's drive of a major city. I'm pretty sure the money California is spending on that boondoggle could be safely excised from the state budget and it would help reduce that $16 billion deficit without harming so much as one teacher's, or police officer's, or fireman's job.

But Jerry Brown is, of course, doing the classic Democrat thing: he doesn't want to cut anything, so rather than try to identify expenses California can safely do without he threatens to cut essential public services. Instead of, you know, things which are totally unnecessary, like the high-speed boondoggle.

As for me, I think it's time for voters to call their bluff. When a Democrat threatens to cut police and firemen if a tax increase isn't approved? Let him do it!

* * *

I wonder if I could figure out a way to trigger a cop's radiation detector without cooking myself. Wouldn't that be fun? I'd need to find some innocuous way to emit a few gamma rays without emitting so many that I grew tentacles or something.

* * *

Alan Caruba discusses how the mainstream media is ignoring black-on-white hate crimes.

* * *

Well: it's really nice outside, and guess what I can't do? *sigh*