Another CA taxpayer bites the dust…

Goose that laid the golden egg book coverJan. 24, 2013

By John Seiler

Michael Reagan, the Gipper’s son, writes:

“Before Jan. 1, an older surgeon I know closed his practice, laid off his four employees, sold his house, and moved to Nevada.

“He was still a practicing surgeon, not because he needed the money but because he loved being a surgeon.

“But the higher income tax rates now in effect under Proposition 30 for those earning more than $250,000 were too much for him and so the broken state of California lost a good surgeon and four other jobs.”

The four jobless workers will will get unemployment benefits for up to 99 weeks, paid for by the state fund, and may also go on California’s generous welfare rolls.

I’ve head similar stories in the past two months.

In campaigning for the Proposition 30 tax increase, Gov. Jerry Brown kept insisting that “the rich must pay their fair share.” Instead, increasingly they believe their “share” is unfair and are leaving.

Take someone making $2 million a year. To simplify a bit, the Prop. 30 tax on the amount above $1 million is 3 percentage points, or $30,000. Brown was thinking, “Goody, Goody. That’ll help pay the pensions for my ‘troops,'” as he calls his union buddies.

Instead, Brown won’t get that $30,000 (or  3 percentage points). But he also won’t get any of the total tax of 13.3 percentage points, or $130,000.

Brown, again, is thinking, “Goody, goody. Balanced budget with that $30,000.” Instead, he won’t get that, and he’ll lose $130,000 more. Total loss: $160,000.

Throw lost sales and other taxes on top of that, and the loss even is higher. That’s why the budget won’t be “balanced,” but the deficit will be worse than last year’s.

Brown wants the goose that lays the Golden State’s eggs to pay its “fair share,” but the goose is nesting elsewhere.


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  1. Donkey
    Donkey 24 January, 2013, 16:01

    Math skills are in short supply in California politics, and so is common sense. 🙂

    Reply this comment
  2. barb
    barb 24 January, 2013, 16:59

    Thanks for reporting the anecdoctal evidence why raising taxes in a state is just counter productive!

    Reply this comment
  3. Curtis Benton
    Curtis Benton 24 January, 2013, 17:22

    Well, the majority of the article is dead on. The one fact mistatement is that unemployment runs 99 weeks not 99 months. Beyond that, dead on. As a business owner in SoCal up until 2010, I saw this coming and moved to Nevada. A year later when moonbeam got elected…we sold the house and moved to Las Vegas.

    Love it here, visit CA occasionally, and listen to my friends from back home bitch about how nothing is changing for the better.

    Just got a call from one of my largest suppliers located in Commerce, CA this week…they are moving their production facility and sales offices to Austin TX. Good for them…bad for CA. Chalk another one up to AB32.

    Curtis: Thank you for the correction. I corrected the “99 months” to “99 weeks” in the text. — John Seiler

    Reply this comment
  4. Dyspeptic
    Dyspeptic 24 January, 2013, 20:20

    “The four jobless workers will get unemployment benefits for up to 99 weeks, paid for by the state fund”

    You mean the state fund that is hopelessly bankrupt and in hock to the Feds for many billions. I wonder if that bill will ever come due?

    @Curtis Benton – Good move Sir. When my daughter graduates from the local university here in the O.C. we will be leaving this basket case of a state so fast the neighbors will wonder what happened. Since you already live in Nevada, do me a favor and give Harry Reid the middle finger for me. 🙂

    Reply this comment
  5. SkippingDog
    SkippingDog 24 January, 2013, 22:30

    The plural of anecdote is not data.

    Reply this comment
  6. Hondo
    Hondo 25 January, 2013, 09:25

    Skipping dog:
    The worse unemployment rate in the country is data. 500 billion in unfunded pension funds is data.

    Reply this comment

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