Sunday, May 5, 2019

May, 2019, Part 3, Political Class Insanity: California's Own Special Class of Political Class Insanity

It is another month which means it is again time to review the latest political class insanity from Washington and around the world. Political class insanity takes many forms including the wasting of taxpayer wealth, criminal fraud within government programs, inane and stupid political quotes and actions, the inability to create and implement effective and efficient government programs, stupid and ill performing economic policies and strategies, and other forms of insanity that continue to evolve and surprise and shock us.

Let’s get started:

1) In the previous post we pointed out that states that have the highest tax rates tend to have the highest out migration rates as its citizens flee to more tax friendly states to retain their hard earned money. California, Illinois, New York, New Jersey and Connecticut have the highest tax burdens and are approaching or are already in a financial death spiral: the more they raise taxes the more likely tax paying residents are likely to flee the state which results in a tax revenue shortfall which usually results on politicians increasing tax rates and tax burdens which results in more citizens fleeing the state which makes tax revenues streams coming up short and the death spiral intensifies.

But the politicians running these states never seem to learn,with California politicians usually leading the parade that says raising taxes is always a good thing:

  • According to a recent article on the Godfather Politics website, California politicians are trying to pass yet another tax that would force restaurant customers to pay a 1% tax to combat global warming.
  • As we have previously reported, global warming ended about two decades ago but that does not stop many liberal and Democratic politicians from continuing to believe the myth of global warming.
  • This effort is called the Restore California Renewable Restaurants movement.
  • Initially, the proposed legislation would force restaurants to put a 1% levy on every restaurant customer’s bill but the customer could have the 1% tax removed.
  • Which is really a stupid condition since it will add to the cost of billing for restaurants since they will have to provide a first bill with the 1% tax and may then have to provide a second bill that removes the 1% tax, causing additional restaurant employee effort and expense.
  • And you know that eventually the California politicians will make this mandatory once it has been in place for a while.
  • According to the Sacramento Bee: “Restaurant owners have the option of charging customers an additional 1% on their bills that would go to help stop climate change. Payments will be gathered by the California Air Resources Board and spent on implementing carbon plans on farms and ranches across California, boosting healthy soil, according to the Perrenial Farming Initiative.”
More taxes for a dubious purpose which assumes that the government will actually be able to efficiently and effectively handle the revenue for the purposes proposed, a hope that is usually no fulfilled. Another reason for Californians to leave their higher and higher tax burden state.

2) But California politicians were not content with taxing meals, they also are working on another tax that I am pretty sure has never been done before:

  • A San Francisco politician, Gordon Mar, wants to assess a tax on any city company that files an IPO and offers its employees stock considerations as part of that IPO.
  • The politician justifies the tax by assessing companies "for the privilege of engaging in business in the city.
  • In theory, the tax money would be used to support low cost housing for low income workers, education and other freebies.
  • Many liberals blame big companies and their high salaries for driving up housing costs and forcing people to leave the city to find affordable housing. 
  • The problem is that many of these people no only leave the city but they leave the state to get out from under the onerous and mostly stupid taxes that state politicians constantly come up with.
  • A community organizer made the following stupid statement: “This year’s IPOs are going to create vast inequality and displacement, and we as a city need corporations to pay their fair share and be good neighbors. The IPO tax is one step toward that.”
Pay their fair share and be good neighbors.” The reality that these people do not realize is that if you keep taxing businesses and over regulating them, they will soon no longer be your neighbors and you will get nothing, never mind an IPO tax. They can move their business to another state and avoid this type of nonsense and hassles.

Ask the people in NYC how this type of political attitude worked out for them. Amazon wanted to bring a major business operation and thousands and thousands of high paying jobs to the outer boroughs of NYC. Hundreds of cities across the country vied for this opportunity and NYC was fortunate enough to land the operation. 

But then, clueless politicians, e.g. Alexandria Ocasio-Cortez, made it more and more difficult and a hassle to do business in the city and Amazon simply moved on. If the San Francisco politicians do the same inane things then they will suffer the same fate, existing businesses will leave and others will never consider moving to the city. 

As always, rather than understand the root cause of an issue or problem, politicians think that simply collecting more taxes will resolve a problem that they do not comprehend. And as always, taxpayers get screwed and the problems never get resolved.

3) This post did not start out to knock and mock California politicians but that is what it is turning out to be. First, we are going to tax what you eat and then tax your stock options with yet another new tax. But the heavy taxation extends far beyond high income taxes, food taxes, IPO taxes, etc., as pointed out in a recent article on the Liberty Planet website, “California’s Leftist Policies Are About To Implode:”

  • According to AAA, California has the highest gas prices and gas taxes in the country.
  • I am currently paying about $2.79 per regular unleaded gas in the Tampa Bay area which is significantly below the current average of $4.08 a gallon of unleaded that Californians pay.
  • This is almost 50% more per gallon than I pay Florida.
  • In Hawaii, which has to tanker in all of its gasoline way out into the Pacific Ocean, its average price for unleaded is only $3.62, $.40 cheaper than mainland California.
  • There are a lot of theories for the high prices in California including higher than average gas taxes and heavy over regulation of the industry that requires special blends of gasoline not required elsewhere which results in supply shortages which drive up prices.
  • Currently, California assess each gallon of gas at 41.7 cents.
  • But that rate is scheduled to go up to 47.3 cents in July, making state gas even more expensive.
  • This is on top of a so-called gasoline sales tax which assesses 2.25% per gallon.
That will do it for today, California and its spend crazy and tax crazy politicians. The very sad thing is that state taxpayers pay so much in taxes and get very little value for their dollar:

  • Homelessness is a large and growing problem with no solutions in sight.
  • Poverty is so bad that 40% of LA residents earn so little that they qualify for Medicaid despite a booming economy.
  • Public city schools stink at educating.
  • There are major infrastructure problems throughout the state.
  • The state’s unfunded liabilities are probably too large to ever be funded properly which will eventually lead to fewer benefits and even more taxes.
High taxes, low benefits, and a continuing deterioration of life. No wonder many people are leaving the state. More insanity to follow since the political class insanity is not restricted to California….unfortunately.

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