By John Seiler

Sometimes the left-leaning California Budget Project produces worthy studies. Its new analysis of Proposition 30 isn’t one of them.

Being pushed by Gov. Jerry Brown and the state’s powerful government-worker unions, Prop. 30 would increase sales and income taxes taxes by from $6 billion to $8.5 billion a year. Supposedly the money would preclude cuts in K-12 and college education. But there’s no guarantee the higher taxes wouldn’t go toward the state’s burgeoning pension costs for retired government workers. All government money is fungible. These increases would allow cuts in other areas; which in turn would free money for the lucrative pensions.

The CBP analysis blithely ignores most of these problems. But the main problem is an economic one: It does not acknowledge that $8.5 billion siphoned from the private economy would severely slam the private sector, killing businesses and jobs.

The study does print one opposing argument, but only in a brief section at the end. And the arguments are not answered. It notes:

“Opponents of Proposition 30, including the Howard Jarvis Taxpayers Association, Sacramento Taxpayers Association, Small Business Action Committee, and National Federation of Independent Business/California, argue that the measure allows Sacramento policymakers to “raise taxes instead of streamlining thousands of state funded programs, massive bureaucracy and waste.”

“They contend that the measure would hurt small businesses and cost the state jobs.”

Otherwise, for the CPB study — the impression almost anyone will get — is that’s all California sunshine and Floribunda roses for everyone except the “1 percent” who will pay for the party.

The study reports:

“The wealthiest 1 percent of Californians — those with annual incomes of $533,000 or more — would contribute more than three-quarters (78.8 percent) of the revenues raised by Proposition 30’s tax increases, while the top 5 percent of Californians — those with annual incomes of at least $206,000 — would contribute 81.2 percent of the revenues raised.”

It’s worth pointing out, which CPB does not, that someone making $206,000 a year is not “wealthy,” although certainly well off. California is so expensive that an income of that amount here is the equivalent of something like $100,000 in Arkansas or Michigan. It’s barely enough to pay the already existing massive taxes, a sky-high mortgage and private-school tuition to get your kids out of the failing California schools.

Killing jobs

But even for those who truly are wealthy, say making $1 million or more a year, this tax is bad. Because these people use their incomes to re-invest in businesses, creating new jobs. Take away billions more dollars of that money and the state inevitably will have fewer businesses and jobs.

Two examples prove that, neither cited by the CPB, even for refutation. In 1991, Republican Gov. Pete Wilson, along with the Democratic Legislature of that day, increases taxes $7 billion a year. Far from solving a budget-deficit problem, it made the problem worse. General-fund revenues actually declined, by $2 billion to $40 billion, from fiscal year 1991-92 to 1993-94. And revenues didn’t recover until after the tax increases expired, going to $46 billion in 1995-96.

You can read the numbers for yourself. Open Gov. Jerry Brown’s own January 2012 budget proposal and scroll down to Schedule 6, page Appendix 12 toward the end.

Then there’s recent evidence from Great Britain. The Wall Street Journal reported:

“Preliminary figures out this week show that Britain’s 50% top marginal income-tax rate may have reduced tax revenue from top earners by as much as 5%, compared to the old 40% top rate. Tax revenue from those filing self-assessments due January 31 was down some £500 million versus last year.

“What this week’s numbers teach, however, is that Britain’s richest taxpayers are simply shifting their incomes, or themselves, offshore, or deferring income, or otherwise arranging their affairs to avoid the confiscatory new top tax rate. Maybe that’s unfair, too—the rich are usually better at protecting their assets—but it’s the predictable consequence of a tax rate whose animating purposes are envy and spite.”

So there’s no guarantee that Prop. 30 even will raise revenues; it could retard them.

The rich will flee

The CPB nowhere acknowledges that rich people obviously are the most highly mobile folks around. They can jump in their Mercedes and Cessnas and move to their houses in other states and countries. Their tax accountants can tell them how long they can stay out of California to avoid paying income and capital-gains taxes here.

If this tax passes, many rich people simply will permanently leave the state in disgust. That’s already happening. One of the Facebook co-founders, Eduardo Saverin, left America earlier this year for low-tax Singapore. The latest from Reuters:

“Facebook co-founder Eduardo Saverin, who renounced his U.S. citizenship earlier this year, made his debut on a Singapore rich list published by Forbes Magazine.

“Brazilian-born Saverin, 30, is No.8 on the list with an estimated net worth of $2.2 billion.

“Saverin has been living in Singapore since 2009 but only gave up his U.S. citizenship ahead of Facebook’s initial public offering.”

This happens all the time. If you’re a rich person, why be robbed by California’s potential 13.1 state income tax, which then would be the highest of any state, on top of a potential 39 percent federal tax if President Obama and congressional Democrats have their way? That’s a total of 52.1 percent. All for the privilege of living in a country, the United States, that abuses you and thinks of you not as a business and jobs creator, but as a tax slave.

The CPB report blythely says:

“Nevertheless, the average household in the bottom fifth of the income distribution would see a total tax increase of just $24, and the average household in the middle fifth would see an increase of just $55. In contrast, the average household in the top 1 percent would pay an additional $21,883 in taxes.

“Consequently, Proposition 30 would take a modest step toward reducing the significant income gap between low-and middle-income Californians and the wealthy.”

They just don’t get it. How can “low-and middle-income Californians” be better off when their jobs are killed after the wealthy leave the state — and take their money and businesses with them?

By John Seiler

Free countries let their people leave at will.

Tyrannies don’t let people out without special permission. And if they let anyone leave, they first rob them.

A good contrast is North Korea, a tyranny that bans leaving; and South Korea, a free country that let’s anyone leave without restraint. I know many South Koreans who have made some money, emigrated to Calfornia and used their savings to start little businesses, such as laundries or computer stores.

Sen. Chuck Schumer, D-Pyongyang, just introduced legislation to rob people leaving America. He’s joined by Sen. Bob Casey, D-Havana.

They’re upset that Eduardo Saverin, one of the new Facebook billionares, renounced his citizenship last fall and took asylum in free Singapore. The combined U.S.-California top income tax rate currently is 48.3 percent. If Dear Leader Barack Obama’s national tax increase goes through, and Commissar Jerry Brown’s tax increase does so as well, come Jan. 1, the top income tax rate in California will be 52.9 percent.

By contrast, Singapore’s top income tax rate in just 20 percent.

For the capital gains tax, it’s even worse. Currently, the top U.S.+ California rate is 24.3 percent. On Jan. 1, it could rise to 29.3 percent. By contrast, Singapore has no capital gains tax at all. Singapore loves it when people come there and invest in creating jobs and businesses.

At a news conference, the senators branded Saverin’s escape from tyranny to freedom a “scheme” to “help him duck up to $67 million in taxes.”

Ex-PATRIOT Act

Their bill in the Supreme Soviet is called the “Ex-PATRIOT Act,” after the word expatriate. It stands for “Expatriation Prevention by Abolishing Tax-Related Incentives for Offshore Tenancy.” A typical Soviet bureaucratic mouthful.

It’s also a play on the so-called USA PATRIOT Act of 2001, which should be called the USA TREASON Act because it destroyed essential American liberties by, among other things, shredding the Fourth Amendment right to protection from “unreasonable searches and seizures.” It was a bipartisan, Republican-Democrat assault on America freedoms. Commissar Schumer, naturally, supported it. Casey wasn’t in the Senate then, but a year ago voted to extend its Gestapo assaults.

Among other things, the new act would rob 30 percent of the capital gains of anyone renouncing his U.S. citizenship. And it would ban the expats from ever setting foot again in the USSA.

In California, we also have hundreds of thosuands of Vietnamese. I know many of them. Unlike most South Korean immigrants, the Vietnamese mostly did not come here peacefully. After Saigon fell in 1975, the “Boat People” (pictured above) fled Vietnam with few possessions. The new Schumer-Casey-style regime in Hanoi, after conquering South Vietnam, seized the property of those leaving.

The Boat People also commonly were assaulted by pirates on the high seas. Every family has horror stories. But the Boat People arrived in a then-free American that welcomed them as exiles from tyranny and seekers of liberty.

Ironically, since then the Vietnamese government has become much more free, allowing the free movementy of peoples and welcomes investments. Tax rates in Vietnam are about the same as those in the United States today, but lower than the USA would be under the Obama-Brown tax increases.

And of course, Vietnam today has many fewer regulations than in the socialist USA, and the cost of living is cheaper.

Currently, about 1,700 Americans a year self-exile from the ex-Land of the Free, more than five times what it was around 2008. Should the Schumer-Casey tyranny be imposed, before it goes into effect expect that number to rise to tens of thousands fleeing socialism for freedom.

By John Seiler

The charlatans who run the U.S. and California governments assume that things are so wonderful here that nobody would dare to leave, even to avoid high taxes.

But people are leaving in droves — not just California for other states with more freedom, but America for other countries with more freedom. The latest:

“Eduardo Saverin, the billionaire co-founder of Facebook Inc. (FB), renounced his U.S. citizenship before an initial public offering that values the social network at as much as $96 billion, a move that may reduce his tax bill.”

California and U.S. tax grabbers have been salivating at the though of looting the Facebook millionaires for hundreds of millions of dollars in taxes. They’ll still get most of that. But not all of it.

It reminds me of how smart, talented people used to free the old Soviet Union, communist Eastern Europe and Maoist China for freedom in America. I’ve known a number of them over the years. One Hungarian I know says the United States rapidly is becoming like the communist Hungary he esaped 30 years ago: a highly centralized socialist state with little or no freedom.

When people used to leave the communist countries, commonly the communist regime would rob them one more time before they left. The report on Saverin says:

“Saverin won’t escape all U.S. taxes. Americans who give up their citizenship owe what is effectively an exit tax on thecapital gains from their stock holdings, even if they don’t sell the shares, said Reuven S. Avi-Yonah, director of the international tax program at the University of Michigan’s law school. For tax purposes, the IRS treats the stock as if it has been sold.”

And Saverin, sensibly, isn’t going to invest his money in socialist America and Kalifornia, but in freer, more capitalist foreign countries:

“He plans to invest in Brazilian and in other global companies that have strong interests in entering the Asian markets.”

Just last month we read reports that Mexicans also are fleeing socialist America and Kalifornia for free-market Mexico.

Soon, nobody is going to be left here except government workers — still waiting to get their spiked pensions.