One good thing — if you can call it that — about Gov. Jerry Brown’s proposed $7 billion tax: It is revealing who is the “Establishment,” both Democrat and Republican, that really runs this state.

With the Republican Party basically moribund, Democrats are the only show in town. So the Establishment will funnel to them campaign cash, for candidates and favored initiatives.

That doesn’t mean the donors favor a particular donor or initiative, or Democrats in general. It means they’re buying influence with the powerful.

So it is with Brown’s tax. It’s unlikely to pass. Opponents will paint it as funding the cushy pensions of government retirees and the ridiculous High-Speed Rail boondoggle. Brown will insist, “No! It’s just going to schools! It’s guaranteed!” But few will believe him. All government money is fungible.

But the Establishment wants to be in good graces with Brown. Although the measure won’t pass, funneling money into it is a signal of membership in the Establishment. It’s ironic how Brown, who for decades has portrayed himself as a maverick, quirky “outsider,” has in his dotage become the ultimate Establishment “insider.”

Brown’s group is called, Californians to Protect Schools, Universities and Public Safety. It should be called, “Californians to Gouge Taxpayers to Fund Lavish Pensions.”

Here are some of the Establishment donors to the tax-gouging initiative, as reported by the Mercury-News:

* $500,000: California Association of Hospitals and Health Systems; now I know why a friend went to have his appendix carved out, and it cost $40,000 for a three-day stay: the hospitals are splurging on political influence peddling;
* $250,000: state building trades; now we know why housing, despite the recent decline, remains so unaffordable in Taxifornia; the money is splurged on stuff like this;
* $100,000: Blue Shield of California; my health insurance; thanks a lot for jacking up my insurance rates to pay for jacking up my taxes; that’s just sicko;
* $300,000: four Indian tribes; time to free the Indians and make them separate nations; then they’ll become tax havens like the Cayman Islands, instead of backing higher taxes;
* $250,000:  Occidental Petroleum Corporation; Lenin pal Armand Hammer’s old outfit.
* $250,000: the American Beverage Association; how about a booze tax, fellas? Or maybe we should bring back Prohibition? Where is Carrie Nation when we need her?

Feb. 1, 2012

The Three Stooges have taken over California government.

Gov. Jerry Brown’s regime couldn’t even type up its tax-increase initiative scheme without botching it. Correcting the error, Brown sent a letter to the attorney general:

(ii) For that portion of taxable income that is over four hundred eight thousand dollars ($408,000) but not over six hundred eighty thousand dollars ($680,000) the tax rate is 10.8 percent of the excess over six four hundred eighty thousand dollars ($680408,000).

And these incompetents want to grab even more of our money?

A better idea would be to take our money, burn it and scatter the ashes over the Pacific Ocean.

Jan. 17, 2012

It must be the season. I’m in a festive mood.

I want to put as many tax increases as possible before voters next November. Tax the rich, tax the middle class, tax the poor, tax smokers, tax drinkers, tax eaters, tax lovers — tax everybody.

That way, as Dan Walters predicted, the tax obsessives will set up a “circular firing squad” and all the tax initiatives will be shot down.

Gov. Jerry Brown, of course, is pushing his $7 billion tax increase on the rich and on the sales tax paid by everybody, especially by the middle class and the poor.

The latest news is that one of his top union allies, the powerful California Federation of Teachers, “is not backing down from Gov. Jerry Brown’s pleas to clear the field for his own tax initiative.” Instead, it’s still seeking its own tax on millionaires.

So, we could have at least two taxes on millionaires.

I’m so eager to pay the millionaires’ tax that I’m trying to become one myself.

The current tax rate paid by those pulling down a million clams a year is 10.3 percent.

Gov. Brown’s tax would increase that by 2 percentage points, to 12.3 percent. That would make it the highest in the country.

The CFT wants to increase the millionaires’ tax by 3 percentage points; and on those making $2 million or more by 5 percentage points.

So, if the CFT tax passes, those making $2 million or more would pay 15.3 percent.

But what if both pass? The matter likely would go to the state Supreme Court. Which wants to make sure its own pay, perks and pensions are funded. So the Supremes could green-light both tax increases: 2 percentage points from the Brown tax and 5 percentage points from the CFT tax.

17.3 Percent State Income Tax

So, somebody making $2 million a year could pay 17.3 percent in income tax just to the state.

That’s on top of the current federal tax of 35 percent.

The combined rate then would be: 35 percent U.S. income tax + 17.3 percent California income tax = 52.3 percent.

Compare that to what the rate would be in Texas: Just the 35 percent U.S. income tax, because Texas has no state income tax. Same with Nevada and Washington state.

So, just by moving to Texas, Washington or Nevada, a rich person would enjoy an income tax cut from 52.3 percent to 35 percent. That’s a 33 percent cut.

Sure, California has great weather.

But for a 33 percent income tax cut, a millionaire could work in Houston or Vegas while keeping a beach house out here in California, while paying for the luxury and have some change left over.

Let’s put some more taxes on the ballot next November.

How about a 100 percent tax on millionaires? Those greedy people, as labor leaders keep saying, need to “pay their fair share.” They’ve been “ripping us off long enough.”

Let’s take all their money and give it to the government.

– Dec. 16, 2011

Assemblyman Felipe Fuentes, D-Arleta, made the Drudge Report today with his proposal to grant amnesty, at the state level, to illegal aliens. McClatchy reported:

SACRAMENTO, Calif.-Nearly 1 million undocumented immigrants could live and work openly in California with little or no fear of deportation under an initiative unveiled Friday by a state legislator and others.

Assemblyman Felipe Fuentes, a Democrat, is helping spearhead the measure, called the California Opportunity and Prosperity Act.

The proposal was filed Friday with the state Attorney General’s Office, marking a first step toward a drive to collect the 504,760 voter signatures needed to qualify for the ballot.

Fuentes called the measure a “moderate, common-sense approach” necessitated by the federal government’s inability to pass comprehensive immigration reform. 

Well, OK. But the federal government also has shown an “inabilty” to advance tax reform. So, we need to take charge here on taxes too.

California should grant amnesty to anyone not paying state taxes. For example, 40 percent of Californians’ taxes goes to K-12 education. But suppose you don’t like the government-run schools and plunk your kids into private schools, or homeschool them. Why should have to pay twice — once for the private or homeschool you do use, a second time for the government school you don’t use?

You should be given a “tax amnesty” of 40 percent. That is, you should be allowed to stop paying 40 percent of your taxes, on your own authority, and automatically be given an “amnesty” from the Franchise Tax Board.

Or maybe you don’t like the state welfare system, believing it’s social engineering that causes dependency, and that the poor should be helped instead through private charity. So, you could stop paying, say, 20 percent of your state taxes.

And if you’re like me and object to the whole kit ‘n’ kaboodle of wateful, incompetent and repressive state government, then you would be granted “amnesty” from paying any taxes at all.

Taxpayer amnesty. It’s an idea whose time is now.

– Dec. 3, 2011

It’s open season on California taxpayers.

Gov. Jerry Brown is painting bull’s eyes on the backs of the middle class. He wants to increase taxes $7 billion, putting it on the November 2012 ballot. It’s supposed to help close an expected deficit of $13 billion.

The tax increase would have two parts: First, a half-cent sales-tax increase. That’s really going to slam the middle class. Need to buy a $20,000 car for your family just to get to work and to take your kids to the soccer game? It’ll cost you another $100. Thats in addition to the $1,600 you’re already paying in sales taxes. Plus gas taxes, sales taxes on the gas, and road tolls.

Maybe you should just skip that car and wait for Gov. Jerry to build his High-Speed Rail.

The second tax increase would be an additional 1 percentage point increase on the state’s exceedingly, filthy-rich taxpayers, defined as those with income tax for single-filers making $250,000 or more.

Maybe Gov. Jerry doesn’t realize it, insulated as he is from what’s really going on, but $250,000 in California actually puts you in the middle class. Certainly, the high-end of the middle-class. But the middle-class just the same.

Due to the state’s absurd regulations on housing construction, plus the massive tax gougings, California is so expensive that $250,000 goes as fare here as about $60,000 does in Michigan. Think I’m kidding? Decent houses in the nice city I grew up in, Wayne, Mich.,  go for about $50,000. OK, you can’t drive to the Pacific Ocean and surf in February. You can’t even surf on the lakes, because they’re frozen over.

But the point is that, in Michigan, you can live comfortably and raise a family making a lot less than you can in California.

Will Gov. Jerry be able to impose his tax increase? It’ll be hard. But he’s designed it to use the old Democratic “Appeal to Envy” campaign, hoping also to get a boost from the Occupy movement. You can see the TV ads now: “Rich people are plundering California. Let’s gouge them to fund our wonderful state schools, police and fire. And we want to assure you, dear voter, that the money won’t just get sucked into the pension system that’s $500 billion in the red — we really, really assure you of that; government never would lie to you, would it?”

OK, so they wouldn’t include that last sentence.

The last tax increase voters approved in California was Proposition 63, back in 2004. It imposed a new, 1 percentage point tax increase on those making more than $1 million a year to fund mental health programs. And it was another example of the insanity of “ballot-box budgeting” in which special interests force taxpayers to fund their pet projects — at the expense of the general fund. Thereby depleted, the general fund then doesn’t have enough money for everything else, and a bead again is taken on the backs of the middle class.

Other tax increases likely will be on the November ballot, including the reform of state budgeting, with a $10 billion tax increase thrown in, as part of the plan from the Think Long group of the rich and famous.

And the California Federation of Teachers seeks a “millionaire’s tax” on anyone making more than $500,000 a year. Yes, the CTA actually says it wants to “Tax Millionaires,” yet defines them as those making $500,000 or more a year.

So those teaching math to our kids need a remedial math class. Maybe that’s why state budget and pension numbers never add up.

– Dec. 1, 2011

While walking my dog this morning, I noticed some neighbors were packing one of those Pods.com storage units in front of their house. “Are you leaving?” I asked.

They said they were leaving for Arizona because the wife had spent months looking for a job, to no avail. She found one in Phoenix.

The husband works from home on his computer, so he can live anywhere.

Both of them lamented California’s high taxes and lack of jobs. They were looking forward to living in a more prosperous area. In September, California suffered 11.9 percent unemployment, Arizona just 9.1 percent, the same as the national number.

Yet, Arizona shares many similarities with California. It’s a industrial state that was struck by a horrible real estate crash and has to assimilate millions of immigrants, legal and illegal. Of course, the weather is worse. But California’s balmy climate is of little value if you’re standing in an unemployment line.

Gov. Brown and the tax-obsessed Democrats in the Legislature don’t understand that Californians simply won’t tolerate higher taxes, and will leave instead of paying them. Brown and the legislators enjoy massive pay, perks and pleasures, and simply don’t understand what those of us down here in the economic trenches are suffering.

There are millions of stories of people leaving California’s anti-jobs, anti-business climate. This has been one of them.

Nov. 17, 2011

Dan Walters is the dean of California columnists. I’ve learned more from him about California politics than from anyone else. But sometimes he gets one wrong. Such as today. He writes:

“The last big recession to hit  California was in the early 1990s and largely centered in  Southern California, as the  aerospace industry was clobbered by the end of the Cold War.

“Los Angeles County alone lost 437,000 jobs between 1990 and 1994, at least half of them directly tied to military spending. The result was a massive exodus out of the state.

“Economists believe that at least 1.5 million Californians, and perhaps as many as 2 million, left the state, with defense workers and their families in the lead. As UCLA economist Jerry Nickelsburg put it: “As their economic opportunities diminished in Los Angeles, they packed up and moved to Texas, Massachusetts, Georgia, or wherever their skills were in demand.

“The exodus made recovery from the recession much easier, simply because it reduced the ranks of the unemployed by several hundred thousand.”

Walters wrote that we could use a similar exodus to reduce the number of those seeking jobs:

His description of the situation 20 years ago is partly true. The defense reductions did hit those industries. But cuts in defense spending don’t necessarily have to lead to recession and unemployment.

He makes the mistake of following Keynesian economics in emphasizing spending as the most important factor in economics. That’s the same mistake both President Bush and President Obama have made, along with Federal Reserve Board Chairman Ben Bernanke, with their many “stimulus” programs. But stimulus and spending aren’t the problem.

The problem is production, which needs to be nurtured by making production easier. The way to do that is to reduce taxes and regulations, while stabilizing the currency (instead of debasing the currency, as Bernanke has done; and Alan Greenspan before him).

In 1946, the U.S. federal budget was slashed greatly because World War II had ended and millions of G.I.’s were sailing home and leaving the service. The cuts were much bigger than California experience in 1990-91. Economists worried that the Great Depression would return.

It didn’t. Why not? Because Republicans and conservative Democrats insisted on huge tax and regulation cuts to accompany the cuts in spending. Major tax cuts were passed in 1946. Wartime wage and price controls mostly were abandoned (unlike in England, which put in charge the socialist Labour Party and soon became the “sick man of Europe”).

Why No 1946 Depression?

According to a study last year by Jason E. Taylor and Richard K. Vedder:

“In August 1945, the Office of War Mobilization and Reconversion forecast that 8 million would be unemployed by the spring of 1946, which would have amounted to a 12 percent unemployment rate. In September 1945, Business Week predicted unemployment would peak at 9 million, or around 14 percent. And these were the optimistic predictions. Leo Cherne of the Research Institute of America and Boris Shishkin, an economist for the American Federation of Labor, forecast 19 and 20 million unemployed respectively — rates that would have been in excess of 35 percent!”

So, what really happened? The professors describe it:

“Labor markets adjusted quickly and efficiently once they were finally unfettered — neither the Hoover nor the Roosevelt administrations gave labor markets a chance to adjust to economic shocks during the 1930s when dramatic labor market interventions (e.g., the National Industrial Recovery Act, the National Labor Relations Act, the Fair Labor Standards Act, among others) were pursued. Most economists today acknowledge that these interventionist polices extended the length and depth of the Great Depression. After the Second World War, unemployment rates, artificially low because of wartime conscription, rose a bit, but remained under 4.5 percent in the first three postwar years — below the long-run average rate of unemployment during the 20th century. Some workers voluntarily withdrew from the labor force, choosing to go to school or return to prewar duties as housewives.”

“But, more importantly to the purpose here, many who lost government-supported jobs in the military or in munitions plants found employment as civilian industries expanded production — in fact civilian employment grew, on net, by over 4 million between 1945 and 1947 when so many pundits were predicting economic Armageddon.

“Household consumption, business investment, and net exports all boomed as government spending receded. The postwar era provides a classic illustration of how government spending “crowds out” private sector spending and how the economy can thrive when the government’s shadow is dramatically reduced.”

Wilson Tax Increases

So, what went wrong in California in the early 1990s? The whole nation first was slammed into a recession in 1990 when President George H.W. Bush broke his “Read my lips! No new taxes!” solemn pledge that got him elected in 1988. He raised taxes.

Then California Gov. Pete Wilson and the Democratic California Legislature — along with a handful of Republican legislators — enacted a record $7 billion state tax increase in 1991.

The result was that, in 1992, when the country was coming out of the recession, California remained in one. And the California recession didn’t end until the California tax increases expired in 2005.

Worse, the predicted revenue increases from the tax increases never materialized. State general-fund revenues actually dropped from $42 billion in fiscal 1991-92 to $41 billion in 1992-93; then dropped again, to $40 billion in 1993-94.

It was especially depressing because a Republican governor pushed the tax increases, meaning taxpayers couldn’t turn to anyone for protection. Since then, Wilson aides have told me he regretted the tax increases. But the damage was done, to the state and to his presidential chances.

That’s the reason so many residents exited the state. If Wilson had held the line on taxes, the state would have recovered at the same rate as the whole country, and the net exit of productive workers would have been zero.

Expelling Taxpayers

Those exiting also were the kind you want to keep: Highly skilled folks who, when employed, work hard and pay their taxes. They also were enterprising enough to pack their SUVs and head to better tax climates, much as their ancestors once had moved in the opposite direction for the same reason. They could have stuck around and collected California’s more-than-generous handouts, but didn’t.

These also tended to be Republican voters, who turned many nearby states — Arizona, Montana, Idaho, Utah, Nevada — more Republican. No doubt many Democrats are saying, “Good riddance!”

But the exodus of these taxpayers/Republicans mortally wounded the GOP in California, especially tilting the Legislature to the far Left. All balance is gone.

Since the mid-1990s, in state-level elections, only two Republicans have won: Arnold Schwarzenegger, really a Kennedy Democrat taking a break from adultery. And in 2006, Steve Poizner won for insurance commissioner when his opponent, Cruz Bustamante, was embroiled in a scandal, and campaigned on his weight-loss program. No kidding. Cruz’ campaign statement: “I want to become an example to others to lead healthier lives by losing weight myself. Obesity in California costs $7.7 billion a year.” His Web site include a recipe for “Cruz’s Healthy Breakfast Frittata.” It’s a nutty state.

Anyway, chasing out achievers is no way to build a foundation for future prosperity.

As Joseph Vranich has tallied, the jobs and businesses just keep leaving California.  And there’s no relief in sight. In 2012 or 2014, Democrats will seize two-thirds of the seats in the Legislature, meaning they will go on a tax-increasing binge. Any businessman smart enough to stay in business knows that.

With fewer producers and more people taking money, including the large number in the $100,000 pension club, the state is headed for bankruptcy.

See you in Texas.

– Oct. 17, 2011

Per the San Diego Union-Tribune, Lockyer said: “Some states, particularly Texas and Nevada, are getting the minimum-wage jobs. There’s this myth about Texas job creation, and it’s mostly oil-patch related. … The challenge is to make sure we educate future generations. Higher education produces wealth… and it is a longterm mistake for us to keep cutting this engine of longterm jobs and economic growth.”

Lockyer occasionally sounds as if he knows better than this, but he also serves as a cheerleader for the state. He has to sell the bonds after all. But this is delusional. A recent article on New Geography looked at national growth in STEM jobs – Science, Technology, Engineering and Math. These are among the highest-paid jobs.  California is shedding many of those jobs.

Another New Geography article, by Bill Watkins of California Lutheran University, points out the reality of California’s economic decline:

The October 29, 2009 issue of Time Magazine had an article titled “Why California is America’s Future.”  I sure hope not.  California is fast becoming a post-industrial hell for almost everyone except the gentry class, their best servants, and the public sector.

We only need a few numbers to demonstrate that California is clearly on the wrong track:

I have no interest in moving to Texas, but I travel there and it is booming. There’s no question that a lot more growth is happening in higher-end jobs than in minimum-wage jobs.

California has lost more than 600,000 jobs in the last decade, two-thirds of which were lost before the recession started. Sure, highly subsidized tech firms still reside here, but they create jobs in other states and overseas. It’s just as the Watkins article explains — California is still a great place to live for those who work in the public sector, work for subsidized firms or are part of the landed gentry, but opportunities are fading away for the middle and working classes.

As Assemblyman Dan Logue, R-Linda, pointed out following the legislative fact-finding trip to the Lone Star State, “From 2008 to 2010, Texas added more than 165,000 jobs. During that same time period, California lost 1.2 million jobs. In terms of creating jobs, Texas is clearly doing something right, and California is doing something wrong.”

Democrats such as Lockyer are fixated on debunking the Texas miracle. But this isn’t about Texas. It is about the type of policies that encourage jobs vs. ones that discourage job creation. California is a high-tax, high-regulation state where business owners and entrepreneurs — except for those that are providing subsidized Green Jobs, etc. — are discouraged and mistreated. You get more of what you subsidize and less of what you punish.

Lockyer and his fellow members of the party that runs this state are convinced that there is no jobs problem beyond a temporary recession. That offers plenty of reason for the rest of us to be concerned about California’s future.

SEPT. 30, 2011

Gov. Jerry Brown has attacked the “Four Horsemen of the Tax Apocalypse.” He was referring to four major anti-tax activists who have kept him from destroying thousands of jobs by raising taxes above already apocalyptic levels.

In the Book of Jerry, the Four Horsemen are: Grover Norquist of Americans for Tax Reform, which gets Republican (and a few Democratic) politicians to sign anti-tax pledges. Jon Coupal of the Howard Jarvis Taxpayers Association, which carries on the heroic anti-tax work of the late Howard Jarvis, father of Proposition 13. The John and Ken radio show on KFI-640 AM in Los Angeles, who oppose any tax increase. And Jon Fleischman of FlashReport.org.

But Brown’s wrong.

The real Horsemen are the Four Horsemen of the Anti-Jobs Apocalypse:

* Gov. Jerry Brown.

* The Democratic-run Legislature, which salivates like Pavlov’s dog when it thinks of gaining 2/3 control of both houses of the Legislature, which it could do in 2012 or 2014, allowing it to increase taxes at will.

* The state’s üeber-powerful government-workers’ unions, living off lavish pay, perks and pensions courtesy of enslaved taxpayers.

* Enviro-extremists, who believe California would be a great nature preserve if only all the people could be pushed out.

These Four Horsemen of the California Anti-Jobs Apocalypse are cutting off the heads of as many workers as they can, leaving victims bleeding in unemployment lines.

Here are the words from Revelation 6:

And I saw when the Lamb opened one of the seals, and I heard, as it were the noise of thunder, one of the four beasts saying, Come and see.

And I saw, and behold a white horse: and he that sat on him had a bow; and a crown was given unto him: and he went forth conquering, and to conquer.

And when he had opened the second seal, I heard the second beast say, Come and see.

And there went out another horse that was red: and power was given to him that sat thereon to take peace from the earth, and that they should kill one another: and there was given unto him a great sword.

And when he had opened the third seal, I heard the third beast say, Come and see. And I beheld, and lo a black horse; and he that sat on him had a pair of balances in his hand.

And I heard a voice in the midst of the four beasts say, A measure of wheat for a penny, and three measures of barley for a penny; and see thou hurt not the oil and the wine.

And when he had opened the fourth seal, I heard the voice of the fourth beast say, Come and see.

And I looked, and behold a pale horse: and his name that sat on him was Death, and Hell followed with him. And power was given unto them over the fourth part of the earth, to kill with sword, and with hunger, and with death, and with the beasts of the earth.

And when he had opened the fifth seal, I saw under the altar the souls of them that were slain for the word of God, and for the testimony which they held….

I sure am not boycotting Amazon.com. And I wrote many articles here against the Amazon tax imposed in June by the tax-obsessives in the Legislature, then signed by tax-obsessive Gov. Jerry Brown.

But I’m encouraging all tax obsessives to follow the new boycott of Amazon.com being organized at ThinkBeforeYouClickCa.com. That’s because, if these people quit Amazon, they won’t save as much on their purchases. So they’ll have less money to spend on advocating tax increases.

The site’s sub-heading is, “Don’t let Amazon cheat California.”

Of course, Amazon.com isn’t cheating California. It provides goods that you want. There’s no coercion or cheating involved.

The cheating going on is by the state government, which rips off taxpayers to fund its vast, wasteful programs.

The site claims, “This law will provide California with $200 million in desperately needed revenues to prevent further cuts to vital public services, while helping local business by closing the loophole that lets online retailers like Amazon.com undercut them.”

Wrong.

As I have detailed, the Amazon tax has killed 25,000 local businesses. And because those businesses are dead, they’re not paying income, property and other taxes. According to Board of Equalization Member George Runner, the tax is so absurd that, overall, it probably reduces taxes at a higher level than it collects them.

According to the L.A. Times, the backers of the anti-Amazon campaign are “Health Access, the Western Center on Law and Poverty, the California Immigration Policy Center and the California Partnership, which deals with senior citizen health issues.” That is, they’re all people who advocate soaking taxpayers to vastly increase the already gargantuan size of government.

So, boycott away, boys and girls. Reduce your own disposable incomes.

As for me, taxes are so high to support the vast, wasteful programs these groups advocate, that I need every price advantage I can get just to stay alive. So, I’ll keep buying from Amazon.com.

Aug. 16, 2011