California, in addition to the unconscionable constitutional amendment to eliminate gay rights, passed lots of propositions to issue bonds for massive new state projects. I vote against all bond issues on the principle that an established state like California should be able to pay for its infrastructure as it goes, instead of passing the debt on to our grandchildren.
Anyway, this prompted a friend to post about how California has one of the highest tax rates in the nation. Does it really? When I divide the spending ($144 billion in 2008) by the population (36.5 million) I get less than $4,000 per person in spending, which seems to be in the bottom half of the states. Considering that California’s median family income is 13th in the nation, one has to wonder whether California’s spending is as out of line as it seems.
To be fair, California’s maximum income tax rate is over 9%, which is among the highest. That just tells us that a higher percentage of the taxes are coming from income taxes, and a lower percentage from other stuff, especially property tax.
California’s maximum tax rate starts for individuals making less than $50K per year, making it a much flatter tax than federal taxes. Personally, my state taxes are always much higher than my federal taxes, even before you count property and sales tax.
The states with the highest spending — over triple what California’s is — have no income tax at all. Of course, Alaska and Wyoming are both low-population resource-rich states that have external sources of revenue to waste.
California’s Gross State Product is something like $1.8 Trillion, making state spending about 1%. Doesn’t sound back-breaking.
I’m a big believer in balanced or surplus budgets except in exceptional circumstances, and California has borrowed to fund improvements for decades. Now we’re paying the price — but we can pass a lot of it on to our children, as our parents did to us. Hooray.