As I predicted, state revenue up — for now

new year's tax increase, cagle, Jan. 2, 2013Jan. 23, 2013

By John Seiler

A week ago I wrote on, “Two critical budget dates approaching.” I predicted that rich people’s quarterly tax payments briefly would goose tax collections for 2012 as they cashed in on investments to avoid the 2013 state and federal tax increases. But that likely wouldn’t last as they found ways to avoid taxes in 2013.

The Sacramento Bee just reported:

“After years of budget agony, California is seeing something strange this month: a heap of excess cash.

“The state is poised to finish January about $4 billion ahead of what forecasters expected in income taxes, according to the Legislative Analyst’s Office — the biggest one-month overage that state fiscal experts can recall in recent memory….

“But state leaders shouldn’t get too giddy.

“The one-month boom likely comes from a perfect storm of tax changes at the state and federal level, and budget experts urge restraint because a dollar received today could simply mean a dollar less tomorrow. This comes on top of an already volatile tax system that relies heavily on wealthy residents whose income is hard to predict.”

Well, as I also predicted, the future months will show that the wealthy have left or found ways to reduce their exposure to California’s massive 13.3 percent top income tax rate from Prop. 30. Gov. Jerry Brown insisted that the wealthy must “pay their fair share” — meaning pay more to his well-compensated allies in the government-workers’ unions. But the wealthy would rather move somewhere else where they can more easily create businesses and jobs.

And as to us “little people,” the middle class that also pays maximum taxes, as I mentioned in another article, I’m cutting spending because of the 2 percentage-point income tax increase imposed on us by President Obama and the Republican leadership in Congress. It’s not that hard, really. A lot of things can be cut, or cheaper substitutes found. Every day, I spend about 10 minutes finding places to cut in my budget (something Obama, Congress, Brown and the California Legislature refused to do with their budgets).

For example, I’ve cut restaurant spending sharply. Savings: at least $100 a month. I’m sorry for the people who might lose their jobs because of that, but I didn’t raise taxes, Obama and the Republicans did. Maybe people finally will learn to vote only for politicians who cut taxes, instead of increasing them.

A lot of other people are doing this. As the year progresses, sales tax collections by the Franchise Tax Board are likely to be below projections.

In a few months we should see that all the tax increases, instead of bringing in more revenue, actually cut revenue.

Tags assigned to this article:
Jerry BrownJohn SeilerProp. 30tax increases

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