By Victor Davis Hanson
Thursday, April 11, 2019
For over six years, California has had a top marginal
income-tax rate of 13.3 percent, the highest in the nation. About 150,000
households in a state of 40 million people now pay nearly half of the total
annual state income tax.
The state legislature sold that confiscatory tax rate on
the idea that it was a temporary fix and would eventually be phased out. No one
believed that. California voters, about 40 percent of whom pay no state income
taxes, naturally approved the extension of the high rate by an overwhelming
margin.
California recently raised gas taxes by 40 percent and
now has the second-highest gas taxes in the United States.
California has the ninth-highest combined state and local
sales taxes in the country, but its state sales tax of 7.3 percent is America’s
highest. As of April 1, California is now applying that high state sales tax to
goods that residents buy online from out-of-state sellers.
In late 2017, the federal government capped state and
local tax deductions at $10,000. For high earners in California, the change
effectively almost doubled their state and local taxes.
Such high taxes, often targeting a small percentage of
the population, may have brought California a budget surplus of more than $20
million. Yet California is never satiated with high new tax rates that bring in
additional revenue. It’s always hungry for more.
Scott Wiener, a Democratic state senator from San
Francisco, has introduced a bill that would create a new California estate tax.
Wiener outlined a death tax of 40 percent on estates worth more than $3.5
million for single Californians or more than $7 million for married couples.
Given the soaring valuations of California properties, a
new estate tax could force children to sell homes or family farms they
inherited just to pay the tax bills.
Soon, even more of the Californian taxpayers who chip in
to pay half of the state income taxes will flee in droves for low-tax or no-tax
states.
What really irks California taxpayers are the shoddy
public services that they receive in exchange for such burdensome taxes.
California can be found near the bottom of state rankings for schools and
infrastructure.
San Francisco ranks first among America’s largest cities
in property crimes per capita. The massive concrete ruins of the state’s
quarter-built and now either canceled or postponed multibillion-dollar
high-speed-rail system are already collecting graffiti.
Roughly a quarter of the nation’s homeless live in
California. So do about one-third of all Americans on public assistance.
Approximately one-fifth of the state’s population lives below the poverty line.
About one-third of Californians are enrolled in Medi-Cal, the state’s
health-care program for low-income residents.
California’s social programs are magnets that draw in the
indigent from all over the world, who arrive in search of generous health,
education, legal, nutritional, and housing subsidies. Some 27 percent of the
state’s residents were not born in the United States.
Last month alone, nearly 100,000 foreign nationals were
stopped at the southern border, according to officials. Huge numbers of
migrants are able to make it across without being caught, and many end up in
California.
A lot of upper-middle-class taxpayers feel not only that
California fails to appreciate their contributions, but that the state often
blames them for not paying even more — as if paying about half of their incomes
to local, state, and federal governments somehow reveals their greed.
The hyper-wealthy liberal denizens of Hollywood, Silicon
Valley, and the coastal enclaves often seem exempt from the consequences of the
high taxes they so often advocate for others. The super-rich either have the
clout to hire experts to help them avoid such taxes, or they simply have so
much money that they are not much affected by even California’s high taxes.
What is the ideology behind such destructive state
policies?
Venezuela, which is driving out its middle class, is
apparently California’s model. Venezuelan leaders believed in providing vast
subsidies for the poor. The country’s super-rich are often crony capitalists
who can avoid high taxes.
Similarly, California is waging an outright war on the
upper middle class, which lacks the numbers of the poor and the clout of the
rich.
Those who administer California’s plagued department of
motor vehicles and high-speed-rail authority may often be inept and
dysfunctional, but the state’s tax collectors are the most obsessive
bureaucrats in the nation.
What is Sacramento’s message to those who combine to pay
half the state’s income taxes and have not yet left California?
“Be gone or we
will eat you!”
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