Another business thinking of leaving CA

Jan. 14, 2013

By John Seiler

Despite assurances to the contrary from Gov. Jerry Brown and others, his Proposition 30 tax increase will drive thousands more businesses from this state. He and President Obama insist that such people must “pay their fair share.” They reply: We already pay too much!

The Orange County Register’s Jan Norman today profiled one such person:

“Melton International Tackle, which sells fishing gear worldwide, is marking 20 years in business in Anaheim during 2013. It may be the last.

“Owner Tracy Melton is consulting with his financial experts and exploring other locations for his 30-employee company. He says recent state tax hikes may be the final straw that drives him out of what he considers to be a state unfriendly to businesses.”

Brown and Obama portray business owners like Melton as filthy rich folks, lounging around on yachts while they punish the poor. The opposite is true.

“‘I am not rich by any means,’ Melton said ‘I work hard, keep 30 people off unemployment, and my reward is that the state and feds want to take more than half of any profit I make’….

“In November, California voters approved Proposition 30, which increases the sales tax a fourth of a percentage point (now 8 percent in most of Orange County), and hikes the state income tax for individuals earning more than $250,000 a year. That income tax increase hits many entrepreneurs, including Melton, because they structure their companies to pass their revenues through to the owners who pay individual income tax.”

54 percent

The tax increase on “the rich” means that entrepreneurs like Melton will have less money to hire people, or even to keep those they do hire. The money will be stolen from the productive private sector and forked over to the counter-productive, parasitic government sector.

“Melton said his tax rates will total almost 54 percent — 39.6 percent for federal income tax (recently increased), 10.3 percent for state income tax and 3.8 percent Medicare surcharge for adjusted income over $200,000 for individuals, $250,000 for couples.”

And for what? The worst federal and state governments ever heard of. California’s recent $6 billion tax hike from Prop. 13 was advertised as going entirely to schools K-12. But Brown’s new budget proposal sends just $2.7 billion to $K-12 schools. And a lot of the tax-increase dough actually will go toward pensions. In any case, California’s horrid schools score among the worst of the 50 states.

“‘I don’t mind paying my fair share, but I don’t think it’s fair that I have to work until the 4th of July to pay my state and federal taxes,'” Melton said.

“He is referring to a ‘Tax Freedom Day’ calculation that the Tax Foundation, a Washington DC advocacy group, came up with when considering how many days Americans would have to work just to pay all their taxes. Residents in high-tax states such as California and high-income individuals would have to work longer.”

It’s ironic that Melton’s “tax freedom” day is on July 4, when we celebrate our independence from British tax tyranny. And King George III only wanted to put some small taxes on tea and paper.

Our modern tax tyrants are far worse. The best way to avoid them is to leave. It’s easy to leave California for places with no state income tax as Texas and Nevada. Unfortunately, it’s a lot harder to leave the United States and such tyrants as Obama and Republican House Speaker John Boehner, who also crafted the massive new tax increases.

But we’re going to see more people flee California and even the United States to freedom.