Taxes already are sky-high

MuggingDec. 14, 2012

By John Seiler

California’s misled voters just increased taxes by passing two initiatives. Federal taxes are set to go up sharply on Jan. 1. And local taxes have gone up in many areas, including for bonds I’m going to be forced to pay for the failed school systems here in Orange County.

But taxes already are sky high!

The evidence comes from Edward C. Prescott, co-winner of the 2004 Nobel Prize in Economics, is director of the Center for the Advanced Study in Economic Efficiency at Arizona State University and Lee E. Ohanian, the associate director of the center, is a professor of economics at UCLA and a senior fellow at Stanford University’s Hoover Institution. They write:

“President Obama argues that the election gave him a mandate to raise taxes on high earners, and the White House indicates that he won’t compromise on this issue as the so-called fiscal cliff approaches.

“But tax rates are already high—much higher than is commonly understood—and increasing them will likely further depress the economy, especially by affecting the number of hours Americans work.”

And that goes doubly for the massive California tax increases.

High tax rates

“Taking into account all taxes on earnings and consumer spending—including federal, state and local income taxes, Social Security and Medicare payroll taxes, excise taxes, and state and local sales taxes—Edward Prescott has shown (especially in the Quarterly Review of the Federal Reserve Bank of Minneapolis, 2004) that the U.S. average marginal effective tax rate is around 40%. This means that if the average worker earns $100 from additional output, he will be able to consume only an additional $60.

“Research by others (including Lee Ohanian, Andrea Raffo and Richard Rogerson in the Journal of Monetary Economics, 2008, and Edward Prescott in the American Economic Review, 2002) indicates that raising tax rates further will significantly reduce U.S. economic activity and by implication will increase tax revenues only a little.”

That’s what I’ve been saying all along: That Gov. Jerry Brown isn’t going to get the $6 billion he’s expecting from his massive Proposition 30 tax increase, mainly an income tax increase on the top producers. Tax producers more, and they’ll produce less.

Indeed, the latest data from Controller John Chiang shows that income tax receipts in Nov. 2012 are down a shocking 19 percent from that expected in the fiscal 2012-13 budget that Gov. Brown signed into law back in June. Looks like rich folks are getting out of Dodge, Calif. before they get mugged again.

Wait! Didn’t Brown promise us before the election that millionaires would never flee, but would love to have their taxes raised? I rebutted the phony Stanford study he was touting back in October that supposedly showed millionaires wouldn’t leave.

Now, it looks like they really are leaving. And the research of the Nobel economist shows that tax increases will reduce economic activity and increase unemployment.

Republicans, as usual, remain clueless and timid at both the state and national levels.

Looks like 2013 is going to be a doozy of a bad economic year.

 

20 comments

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  1. Rex the Wonder Dog!
    Rex the Wonder Dog! 14 December, 2012, 12:34

    We need to make the prop 30 sales tax permanent, that would cure all the deficit problems.

    Reply this comment
  2. us citizen
    us citizen 14 December, 2012, 18:05

    OMG……….rex…………go bury your head in the sand a little more. Maybe it will put you out of your misery.

    Reply this comment
  3. Skippingdog
    Skippingdog 14 December, 2012, 19:12

    And repeal Prop 13.

    Reply this comment
  4. Rex the Wonder Dog!
    Rex the Wonder Dog! 14 December, 2012, 19:33

    Hahahahahahah….US Cit, you know that was sarcasm, but EXACTLY what Clown will be saying in 3.5 years 🙂

    Reply this comment
  5. SeeSaw
    SeeSaw 14 December, 2012, 19:59

    I don’t want to see Prop. 13 repealed on residential property. The formula for commercial property would be ok as is too, if legislation could be passed, requiring property that changes hands to be recorded as such. (CVS bought out all Longs Drug Stores, but Longs is still the owner of record.)

    JB did ask the legislature to allow the voters a choice on whether or not to keep the 2009 tax increases for a few more years–the republicans refused to let it happen. Taxes are a necessary evil.

    Reply this comment
  6. Rex the Wonder Dog!
    Rex the Wonder Dog! 14 December, 2012, 20:08

    SeeSaw says:
    Taxes are a necessary evil.
    ===
    EXCESSIVE taxes to fund GED education gov employees $5 million pension funds at age 50 is not necessary!

    Reply this comment
  7. Donkey
    Donkey 14 December, 2012, 20:50

    I much prefer the dangerous evils of freedom to the peaceful slavery as a tax provider for the RAGWUS feeders like SeeSaw and her cabal!! 🙂

    Reply this comment
  8. SeeSaw
    SeeSaw 15 December, 2012, 09:42

    Oh, you poor pititful losers have nothing better to do than lay into people you have never met, because you are so envious and resentful that they have something you don’t. Why don’t you swat down those pathetic green bugs circling your heads and become useful to society for something positive. You are disgusting!

    Reply this comment
  9. Donkey
    Donkey 15 December, 2012, 13:14

    So when a cabal of thieves devises a scheme to steal from the taxpayers it now called envey if the taxpayers seek an end to this evil thievery. The RAGWUS feeders are oblivious inside their walls of greed. 🙂

    Reply this comment
  10. NTHEOC
    NTHEOC 15 December, 2012, 15:13

    Prop 13 is going,going,and soon to be GONE!!!!! Prop 13 is a huge factor in what went wrong for California. Things are getting back on track and ending prop 13 will be the icing on the cake!!!

    Reply this comment
  11. SeeSaw
    SeeSaw 15 December, 2012, 16:48

    Why would you want to do that, NTHEOC? Do away with Prop. 13, and your own residential bill will increase by six times. Name one elected politician who has recommended that.

    Reply this comment
  12. SeeSaw
    SeeSaw 15 December, 2012, 16:54

    What did you charge for your products when you had your own business, Donkey? What happened when your overhead increased? Did you raise your price a little to cover the extra cost?

    I am no thief and I do not belong to a cabal. My retirement payments were made by me and my employer while I was an active employee. You have not had to pay one penny for my retirement since I have been retired–five years to now.

    Too bad you reached the age of adulthood long ago, and you still call others names as though you were 12!

    Reply this comment
  13. Rex the Wonder Dog!
    Rex the Wonder Dog! 15 December, 2012, 17:03

    SeeSaw says:
    Oh, you poor pitiful losers have nothing better to do than lay into people you have never met, because you are so envious and resentful that they have something you don’t. Why don’t you swat down those pathetic green bugs circling your heads and become useful to society for something positive. You are disgusting!

    LOL…..OK lets add up the seesaw insults here;
    1- Pitiful;
    2-Losers;
    3-Envious;
    4-Resentful;
    5-Pathetic;
    6-disgusting!

    OK, John, Katy- time to ban seesaw, she either woke up on the strong side of the bed this morning, or is being super mean or having a major meltdown 🙂

    Reply this comment
  14. Rex the Wonder Dog!
    Rex the Wonder Dog! 15 December, 2012, 17:06

    NTHEOC, prop 13 was an amendment added to the Constitution of California by means of the initiative process- I do not think the legislature can undue a constitutional amendment enacted by the people without a vote by those same people……

    Reply this comment
  15. Donkey
    Donkey 15 December, 2012, 18:52

    Thanks for having my back Rex!!

    SeeSaw, the prices I charged were market driven, for precise custom machined parts, the costs of the RAGWUS is artificially driven by a cabal of crooks, thieves, and liars. 🙂 Love you girl!! 🙂

    Reply this comment
  16. Bob Smith
    Bob Smith 15 December, 2012, 19:17

    “I do not think the legislature can undue a constitutional amendment enacted by the people without a vote by those same people……”

    That’s what (liberal) courts are for. For example, Washington State’s Supreme Court deems legally voted changes to Washington’s constitution to be unconstitutional all the time. California’s courts surely can do no less.

    Reply this comment
  17. SeeSaw
    SeeSaw 15 December, 2012, 22:40

    Bob, Prop. 13 was upheld by the SCOTUS. I agree with Rex.

    Reply this comment
  18. SeeSaw
    SeeSaw 15 December, 2012, 22:46

    I think that is a matter of opinion, Donkey. The costs of high-level management are negotiated, one on one and are very high, in many cases. The costs of the rank and file are negotiated in the CB process–the public agencies have just as much right to cover those costs with the fees for services as you had for the cost of your products. Keep in mind that overpricing can exist in both sectors.

    Reply this comment
  19. SeeSaw
    SeeSaw 15 December, 2012, 22:52

    You are all of those things Rex. How else do you expect me to respond to people who call me a bleeping moron, thief, etc., etc.!

    I do not control the blog, and the owners have the right to accept or reject my comments. I have plenty to do whether I can comment or not.

    Reply this comment
  20. Rex the Wonder Dog!
    Rex the Wonder Dog! 16 December, 2012, 21:19

    SeeSaw says:
    You are all of those things Rex.
    ===
    LOL…now seesaw is personally attacking an honest, loyal and ethical K-9, what is the trough feeder mentality coming too 🙂

    Reply this comment

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