The state of California has one of the largest deficits of any state in the union. They also have one of the highest tax rates of any state in the union. Yet it seems that the more they raise taxes the bigger their deficit grows and this is exactly the same plan that Barack Obama has for America.
To start with middle-class workers in California making more than $48,000 per year pay estate income tax rate of 9.3%. This is higher than the state income tax rate for millionaires and 47 other states. But Gov. Jerry Brown doesn’t think the tax rates are high enough.
This past summer numerous businesses began to move out of the state of California to other states such as Texas because of the high tax rates, the proposed carbon credits, and because there is an initiative to raise taxes even higher that was placed on the November ballot. In 2011 California lost 120,000 jobs while in the same time frame Texas gained 130,000 jobs.
Proposition 30 was an initiative to raise sales tax statewide and to raise state income taxes on all individuals making $250,000 a year or more by up to 3% for 7 years. Gov. Brown estimates this will generate an additional $6 billion in revenue. Proposition 30 was passed by a margin of 54% to 46% of the vote statewide.
In addition to tax increases California has enacted the nation’s first cap and trade law. The new law known as AB 32 will require all industries to reduce carbon emissions to those of 1990 by the year 2020. In addition, the law states that those industries considered to be the worst polluters must meet certain cap emissions. If those caps are not met by 2013, those companies will be forced to purchase ‘carbon credits’ which is a socialist term for paying a fine.
This Wednesday, the California Air Resources Board began selling carbon credits, also known as pollution allowances, in a closed online auction for the first time. How much was paid for a ton of carbon credit and how many companies participated in the online auction will not be revealed until November 19.
Efforts were made to block the auction when the California Chamber of Commerce filed a last-minute lawsuit claiming that the program is nothing more than an illegal tax and thus should be eliminated. Part of their lawsuit read:
“This action by an unelected state board to use regulatory statutes to raise tens of billions of dollars from taxpayers is unprecedented in our state’s history.”
In addition to the increased taxes, the enforcement of the cap and trade law is causing even more businesses and industries to move out of the state of California. The net result will be fewer jobs and less tax revenue for the state of California. By raising taxes and forcing carbon credit purchases, they are digging their own fiscal grave and nailing their own casket closed. At this rate California will soon be dead and buried by their own Democratic fiscal irresponsibility.
California is only a year or two ahead of the rest of the United States in this fiscal fiasco of raising taxes and imposing other penalties and fees for doing business in this country. And like California, a number of businesses are already looking at moving their facilities out of the country in order for them to remain in business. Even though Republican leaders have been warning Pres. Obama and other Democrats of this very thing they still refuse to believe it, even as it is happening. Under Pres. Obama, America is also digging its own grave and may soon be sealing its own financial coffin.