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Breaking Bad: California vs. the Other States
by Richard Rider, Chairman, San Diego Tax Fighters
Version 1.797 Revised: 24 January, 2012
Updated version online at: http://open.salon.com/blog/Richard_Rider
Email: RRider@... Phone: 858-530-3027
Facebook blog page: www.Facebook.com/Richard.Rider
Here's a depressing but documented comparison of California taxes and
economic climate with the rest of the states. The news is breaking bad, and
getting worse (twice a month, I update crucial data on this fact sheet):
REVISED: California has the 3rd worst state income tax in the nation. 9.3%
tax bracket starts at $46,766 for people filing as individuals. 10.3% tax
starts at $1,000,000. Governor Brown is putting on the ballot a prop to
change the "millionaires' tax" to 12.3%, starting at $500,000. If approved,
CA will be #1 in income tax rates.
http://www.taxfoundation.org/files/bp59_es.pdf
Highest state sales tax rate in the nation. 7.25% (as of 1 July, 2011 -
does not include local sales taxes).
http://www.taxfoundation.org/files/bp60.pdf Table #15
California corporate income tax rate (8.84%) is the highest west of the
Mississippi (our economic competitors) except for Alaska.
http://www.taxfoundation.org/files/bp59.pdf Table #8 - we are 8th
highest nationwide.
UPDATE: Second highest state capital gains tax. 10.3%. Hawaii is #1 at
11%. (Various Tax Foundation articles - no one link)
UPDATE: CA has the 2nd highest gas tax (averaging 67.0 cents/gallon) in the
nation (January, 2012). National average is 48.8 cents.
http://www.api.org/statistics/fueltaxes/ (also CA has the highest diesel
tax - 75.9 cents/gallon. Nat'l average 54.0 cents)
California is ranked 14th highest in per capita property taxes (including
commercial) - the only major tax where we are not in the worst ten states.
But CA property taxes per owner-occupied home were the 10th highest in the
nation in 2009.
http://www.taxfoundation.org/taxdata/show/251.html and
http://www.taxfoundation.org/taxdata/show/1913.html
CA has now instituted the highest "cap and trade" tax in the nation -
indeed, the ONLY such U.S. tax. One study estimates the annual cost at
$3,857 per household by 2020. Even proponents concede that it will have zero
impact on global warming.
California's 2011 "Tax Freedom Day" (the day the average taxpayer stops
working for government and starts working for himself) is the 6th worst date
in the nation - up from 28th worst in 1994, but down from 4th worst in 2009.
CA "improved" only because of our state's soaring unemployment rate - the
new tax dodge!
UPDATE: CA has the 2nd highest state unemployment rate. (December, 2011) -
11.1%. National unemployment rate 8.5%. National unemployment rate not
including CA is only 8.1%, making the CA unemployment rate 36.3% higher than
the average of the other 49 states. http://www.bls.gov/lau/
CA needlessly licenses more occupations than any state - 177. Second worst
state is Connecticut at 155. The average for the states is 92.
California's 2011 Business Tax Climate ranks 2nd worst in the nation - close
behind New York state.
For the 2007-08 school year, the Los Angeles Unified School District spent
$29,780 per student. The district also has the country's second lowest
graduation rate of 40.6%.
CA public school teachers the highest paid in the nation. CA students rank
48th in math achievement, 49th in reading.
http://www.lao.ca.gov/reports/2011/calfacts/calfacts_010511.aspx page 36
1 in 5 in Los Angeles County receiving public aid.
California has 12% of the nation's population, but 36% of the country's TANF
("Temporary" Assistance for Needy Families) welfare recipients - more than
the next 7 states combined. Unlike other states, this "temporary"
assistance becomes much more permanent in CA.
http://weblog.signonsandiego.com/weblogs/afb/archives/034662.html
California prison guards highest paid in the nation.
http://www.caltax.org/caltaxletter/2008/101708_fraud1.htm
For every dollar California pays to D.C., we get back 78 cents. We rank 7th
worst. http://www.taxfoundation.org/research/show/266.html
California is the worst ranked state for tax administration - another
anti-business factor.
http://www.sacbee.com/static/weblogs/capitolalertlatest/2010/03/cal-rated-worst.html
UPDATE: California now has the 2nd lowest bond rating of any state - Basket
case Illinois just beat us out for the lowest spot. We didn't improve our
rating - Illinois just got worse.
http://www.calwhine.com/great-news-california-no-longer-has-worst-credit-rating/1554/
California has the 6th highest (worst) state per capita debt. Not counted is
local government debt.
American Tort Reform Association ranks CA the worst state "judicial
hellhole" - extremely anti-business.
http://tinyurl.com/CA-worst-judicial-state
California is tied with 3 other states (Hawaii, Texas[!] and Florida) for
having by far the least competitive property & casualty insurance markets.
http://heartland.org/policy-documents/heartland-institute-releases-new-property-casualty-insurance-report-card
California has a nasty anti-small business $800 minimum corporate income
tax, even if no profit is earned, and even for many nonprofits. Next
highest state is Oregon at $150. A few others under $100, with most at
zero. http://tinyurl.com/CA-800-tax
America's top 500 CEO's rank California "the worst state in which to do
business" for the 7th straight year (May, 2011).
http://chiefexecutive.net/best-worst-states-for-business (It's worth
reading the short article, and especially the part about California.)
California, a destitute state, still gives away college education at fire
sale prices. Our community college tuition is the lowest in the nation. How
low? Nationwide, the average community college tuition is about three times
higher than California CC's.
http://www.hecb.wa.gov/research/issues/documents/TuitionandFees2009-10Report-Final.pdf
Chart 5 on page 8
This ridiculously low tuition devalues education to students - resulting in
a 30+% drop rate for class completion. In addition, 2/3 of California CC
students pay no net tuition at all - either filling out a simple unverified
"hardship" form that exempts them from any tuition payment, or receiving
grants and tax credits for their full tuition.
On top of that, California offers thousands of absolutely free adult
continuing education classes - a sop to the upper middle class. In San
Diego, over 1,400 classes for everything from baking pastries to ballroom
dancing are offered totally at taxpayer expense. http://www.sdce.edu
Protests about increased UC student fees too often ignore one crucial
point -- all poor and most middle class students don't pay the "fees" (our
state's euphemism for tuition). There are no fees for California families
with under $80K income. Moreover, Pell Grants and federal tuition tax
credits covered the total 2009-10 fee increases for nearly 3/4 of all
undergraduates with household incomes below $180K.
http://www.universityofcalifornia.edu/blueandgold/ and
http://www.universityofcalifornia.edu/news/article/22415
California residential electricity costs an average of 32.4% more than the
national average (far higher in San Diego County). For industrial use, CA
electricity is 70.8% higher than the national average (May, 2011).
http://www.eia.doe.gov/cneaf/electricity/epm/table5_6_a.html
?From 2007 through 2010, 10,763 industrial facilities were built or expanded
across the country - but only 176 of those were in CA. So with roughly 12%
of the nation's population, CA got 1.6% of the built or expanded industrial
facilities. http://podcasts.odiogo.com/city-journal/podcasts-xml.php
California Manufacturers and Technology Association podcast
California is now ranked as the 2nd worst state to retire in. Only
basket-case Illinois is worse. We "beat" NY, RI and NJ.
Consider California's net domestic migration (migration between states).
From April, 2000 through June, 2008 (8 years, 2 months) California has lost
a NET 1.4 million people. The cumulative net annual income lost from this 8
year out-migration comes to about $26 billion. Net departures slowed in
2008 only because people couldn't sell their homes. In 2010 we lost "only"
72,000 net people to domestic migration. Again, note that this is NET
loss.
http://www.mdp.state.md.us/msdc/Pop_estimate/Estimate_08/table5.pdf and
http://tinyurl.com/2010-CA-lost-72000 and
These are not welfare kings and queens departing. They are the young, the
educated, the productive, the ambitious, the wealthy (such as Tiger Woods) -
and retirees seeking to make their pensions provide more bang for the buck.
Too often these departing seniors are retired state and local government
employees fleeing the state that provides them with their opulent pensions -
in order to avoid the high taxes that these same employees pushed so hard
through their unions. And once they move out of California, our state can
no longer tax their California-paid pensions.
As taxes rise and jobs disappear, we lose our tax base, continuing
California's state and local fiscal death spiral. This downward spiral must
stop NOW.
NOTE: To see the latest version of this "Breaking Bad" column, plus other
taxpayer items of interest, go to my blog at
http://open.salon.com/blog/Richard_Rider , or my more active Facebook
www.Facebook.com/Richard.Rider. This fact sheet also is available free upon
request as a 2 page Word file for printing.