But a glance to the future — and behind the numbers — shows the state economy faces numerous question marks. Among the 50 states on the new data from the Bureau of Labor Statistics, California now is second-worst, behind only Mississippi at 7.2 percent. “Better than Mississippi!” would not make a great slogan.

Since the Great Recession, Nevada and Rhode Island have suffered unemployment even worse than California’s. But for December, both posted 6.8 percent jobless rates.

Not to mention the rate of California’s top competitor: Texas at 4.6 percent.

There also are some worrisome details about California. “Most of the December 0.2 percentage-point drop was from more people leaving the group that is ‘actively seeking work,'” Richard Rider told CalWatchdog.com; he’s the chairman of San Diego Taxfighters. “We can see this in the fact that during this rather dramatic drop, only 700 net new jobs were created in a state of over 38,800,000 people.”

He added that today more people than in the past are working part-time, “yet we count anyone working as little as 1 hour a week as ’employed.'”

He pointed to a new report from Advisor Perspectives, a publication for investment advisors. Looking at national numbers provided by the BLS, it found:

“The Labor Department has been collecting this since 1968, a time when only 13.5 percent of U.S. employees were part-timers. That number peaked at 20.1 percent in January 2010. The latest data point, approaching five years later, is only modestly lower at 18.7 percent last month. If the pre-recession percentage is a recovery target, we still have a long way to go.”

Competition

Again looking to the future, California is facing increasing competition for businesses and jobs from other states. Writing yesterday in the Wall Street Journal, Heritage Foundation Chief Economist Stephen Moore looked at the trend for tax cutting:

“as many as 20 Republican governors are moving forward with their own pro-growth tax-relief initiatives. This is on top of the 14 states, including Florida, Michigan, Ohio and Wisconsin, whose 2014 tax cuts will take effect this year.”

So that’s 34 states cutting taxes — even as California continues under the the $7 billion tax increase of Proposition 30, which voters passed in 2012. It boosted the state’s top income tax rate to 13.3 percent, the highest of any state.

Even depressed Mississippi is getting into the act. Reported Mississippi Public Broadcasting on Jan. 22, “Governor Phil Bryant is calling for a tax cut for thousands Mississippi families. Bryant addressed a joint session of the Mississippi Legislature last night for his state of the state address.”

Rider, who has been analyzing California tax policy for decades, gave his perspective. “States are cutting taxes because they understand economic competition,” he said. “The evidence is overwhelming that lower taxes and more reasonable regulation results in more jobs and a more prosperous state. California leadership is still in denial of this Economics 101 reality.”

He also pointed to a fact sheet he compiled of state per-capita GDP numbers. California’s nominal number in 2012 was 18th highest of the 50 states and D.C., at $46,029 per capita.

But when cost-of-living is taken into account, it dropped to 39th, at $36,215.

Blue-state tax cuts

Moore points out that even Blue States are getting into the tax-cutting act: “In Illinois, Maryland and Massachusetts — three blue states that elected Republican governors in November — tax rates are likely to fall to provide juice and jobs for local economies.”

If Mississippi cuts taxes and unemployment drops fast, California could be left holding the bag of the worst unemployment rate among the states.

Rider believes things will change in California only after a crisis. “Meaningful reform will come only out of necessity, not from some change of heart,” he said. “It will take years before we reach that point — we are not in a collapse — just a stately decline.”

[The] firefighters union says the cuts will lead to fewer job applicants, much in the way recruitment has slowed for the short-staffed police department, which is dealing with the same pension cuts. …

“City Hall is hell bent on doing to the fire department what they have done to the police department and the results will be the same; firefighters will leave San Jose and 911 emergency response times will increase,” firefighters union president Joel Phelan said in a statement.

But just beneath the San Jose story was a link to a Los Angeles Times story about a flap over how L.A.’s city fire department was handling the hiring of new firefighters. It noted that there had been 10,000 applicants seeking to be in a fire trainee recruit class of 300 people.

10,000! Oh, yeah, reduced benefits in San Jose will keep jobs unfilled.

The current conventional wisdom is that he’s likely to end up back with the Heat. Under NBA rules intended to help teams keep their stars, he can make the most guaranteed money with Miami — a five-year, $129 million deal, averaging $25.8 million a year. Other teams can offer him at most a four-year, $96 million deal (average: $24 million a year).

But in 2010, the last time LeBron was a free agent, he didn’t take the maximum available from his old team, Cleveland, or even from Miami. He took less money because he wanted to join a team ready to make championship runs, and that’s just what happened with the Heat, which made the finals four straight years, winning twice.

So what are the loaded teams this time around? Two teams jump out — the Los Angeles Clippers and the Houston Rockets, which each have two of the 20 or so best players in the league to team with LeBron.

Millions more available in Houston, Miami

But if money is at all a factor for LeBron — not just his salary but how much of a tax bite he faces on his estimated $42 million in annual endorsements — than Proposition 30 is going to hurt the Clippers’ chances badly.

The sting of Prop. 30 on high earners first was highlighted by a sports story in January 2013, when golfer Phil Mickelson said he was considering leaving Rancho Santa Fe and San Diego County because of high taxes. Another San Diegan, small-government crusader Richard Rider, subsequently explained why Mickelson had reason to grouse:

“Here’s the fact that EVERYONE (including me) initially undervalued concerning Mickelson and CA state income taxes. Starting in 2013, Mickelson’s NET state income tax has jumped 83.6%!  And yes, this huge increase hits most Californians making more than $2 million income.

“Here’s why. Until 2013, state income taxes were deductible for federal income tax purposes. Starting in 2013, for the really rich, this deductibility largely goes away (as does deducting property taxes and many other deductions). For people with over $2 million of income, they lose 80% of such deductions.

“With Proposition 30 passed in November, CA has raised its income tax on the wealthy by 29%. The combined tax increase is breathtaking. Do the math, and you find that in 2011 the net CA income tax for Mickelson was 6.7%. In 2013 his net CA income tax is 12.3% — an increase of 83.6%.”

Because of this huge bite, assuming James’ endorsements remained at $42 million, if he played for the Clippers and made $24 million, he would face a 51 percent effective tax rate on his $66 million in income, meaning he would take home a little bit more than $32 million.

Clippers fans can blame CA Dems if LeBron stays away

If he played for Houston, in a state that has no income tax, his 39 percent effective tax rate on $66 million in income means he would take home a little bit more than $40 million. That’s only slightly less then he would make if he returns to Miami, in another state that has no income tax. In Florida, his 39 percent effective tax rate on $67.8 million in income means he would take home about $41.4 million.

Now obviously this is a simplistic calculation of his taxes, which would be subject to other factors, especially given the complex ways many states target the income of visiting pro athletes. But the bottom line is pretty inescapable: Houston and Miami have huge advantages over the Clippers on the money front.

LeBron James may not care about how much money he makes at this point in his life. And one of his very best friends, Chris Paul, is a superstar point guard with the Clippers, where the coach is Doc Rivers, another LeBron favorite.

But if his decision is a close call and he doesn’t choose the Clippers, it’s fair to give some of the blame to Proposition 30 and the confiscatory policies of the California Democratic Party.

The key is a recent development that San Diego small-government activist Richard Rider detailed in the Wall Street Journal:

By Chris Reed

Richard Rider, the dean of the small-government/low-tax movement in San Diego County, has come up with some stunning number-crunching on his blog:

“Here’s the fact that EVERYONE (including me) initially undervalued concerning [Rancho Santa Fe pro golfer Phil] Mickelson and CA state income taxes. Starting in 2013, Mickelson’s NET state income tax has jumped 83.6%!  And yes, this huge increase hits most Californians making more than $2 million income.

“Here’s why. Until 2013, state income taxes were deductible for federal income tax purposes. Starting in 2013, for the really rich, this deductibility largely goes away (as does deducting property taxes and many other deductions). For people with over $2 million of income, they lose 80% of such deductions.

“With Proposition 30 passed in November, CA has raised its income tax on the wealthy by 29%. The combined tax increase is breathtaking. Do the math, and you find that in 2011 the net CA income tax for Mickelson was 6.7%. In 2013 his net CA income tax is 12.3% — an increase of 83.6%.”

This is mind-boggling. No wonder Phil said he was contemplating “drastic changes.”

Rider makes another great point as well:

“The big taxers love to point to a bogus study by the Stanford Center on Poverty and Inequality (the name says it all regarding their objectivity) ‘think tank’ which concluded that the California 1% millionaire’s tax increase in 2005 had little or no effect on millionaire’s leaving. While the study has since been largely discredited, the magnitude of that 2005 increase vs. the 2013 CA increase is worth considering.

“In 2005, the maximum CA income tax went up from 9.3% to 10.3% for those with over a million dollar income. At the time, the CA income tax was fully deductible. With a 35% maximum federal tax bracket, that meant that the increase cost the rich a net 0.65%.

With the changes I’ve discussed, the 2013 NET CA income tax increase is 5.6% — 8.6 TIMES HIGHER than the 2005 increase. Only a fool would think that such a massive increase would still not motivate many of the wealthy to depart the ‘Golden State.’

“Parenthetically might I add that California abounds with such fools.”

And many of them inhabit the newsrooms of the Golden State.

Will the Dan Morains and George Skeltons of the world give this context when writing about state tax policy? Don’t hold your breath. They are what they are — extensions of a Sacramento establishment in which the media’s and the Democrats’ conventional wisdom are often close to identical. That conventional wisdom has long held that the key to making life in California even more glorious is even higher taxes. Groan.

Thank you, Richard Rider, for your vigilance and smarts.

By John Seiler

Not only does Proposition 30 increase income taxes; it also boosts California sales taxes, already the highest among states, to an even higher level. The following chart shows state sales taxes.
And remember, a state like Tennessee, whose 7 percent sales tax is nearly has high as Taxifornia’s, doesn’t even have an income tax.

(Hat tap to Richard Rider, taxpayers’ best friend.)

By John Seiler

Our colleague Martha Montelongo’s great Gadfly Radio yesterday featured the theme “schemes, theft, lies and the California government” — which pretty much sums it up.

Featured guests are Richard Rider, the San Diego tax fighter; and Wayne Lusvardi, our ace reporter here on CalWatchDog.com.

Click here for a link to the podcast:

http://gadflyradio.com/podcasts/podcast-richard-rider-wayne-lusvardischemes-theft-lies-ca-government/

On June 15, our colleague Wayne Lusvardi appeared on AM 600 KOGO in San Diego. Click here for a podcast. The host is Chris Reed, an editorialist with the San Diego Union.

Wayne discusses his recent article, “CA Enviro Plan Channels Pol Pot.”

Later in the program is our friend Richard Rider, the great freedom activist from San Diego.

July 18, 2011

AB 32 really is high-tech Jim Crow.

The great libertarian activist Richard Rider of San Diego wrote on open Salon about how, if Prop. 23 is defeated, AB 32 would especially kill black and Latino jobs. But Der Arnold and AB 32’s supporters don’t care. They just want to profit from the government subsidies and coercion for “green” technologies. Read all Rider’s column, but here’s an excerpt:

Recently I did a debate on Prop 23 out at SDSU before a wildly Gaya-worshipping audience.  I was representing the hated “for” position (but was fairly treated with civil discourse).  And a very interesting issue came up.

BACKGROUND:  Remember that Prop 23 is the CA measure that would suspend the Draconian state-killing AB32.  AB32 is a bill about to take effect in 2011 that imposes crushing, taxes, costs and regulatory burdens in the name of global warming.  Or global cooling.  Or climate change.  Or sudden change.  Or whatever.

Even AB32 proponents concede that with just CA adopting the measure, it will have essentially zero effect — their response is that “it sets a good example.”  The fact that the other 49 states wisely decided not to follow suit is blithely ignored. Indeed, Arizona was the last state to rescind its commitment to AB32-type legislation — doubtless seeking to snag refugee businesses fleeing CA….

California is ALREADY an incredibly high tax, anti-business state (using my “Breaking Bad” fact sheet for supporting evidence), and AB32 will crush our already weak economy.

I pounded on the fact that businesses and productive individuals are already leaving WITHOUT AB32 — the latest survey showed that this year CA business departures TRIPLED over last year (and that was with months left to go in 2010).

At first my opponent (an environmental lawyer who presumably makes his living suing to block businesses — or to put them out of business) was in denial, asserting that the green jobs would offset the million plus jobs lost.  But even the CA Air Resources Board states that AB32 should produce only 10,000 jobs.

Finally I got the response I expected (from both the audience and my opponent) — “good riddance” to the “dirty industries” of California.  We don’t want ’em, or need ’em.  (Their definition of a dirty industry is any business that gives off any pollution, however tiny.)

That’s the response I was waiting for.  My response:

“Look around this room.   What do you see?  Whites and Asians.  Not a black or Hispanic in sight.

“The industries you plan to run out of California offer the best jobs for working class people — especially for these two minorities.  You see yourselves working in upscale office park/campuses researching green technology — somehow immune from (and profiting from) AB32’s mandates.

“Consider the irony.   I’m perceived here as the knuckle dragging right winger, and I’m greatly concerned about the loss of good paying working class jobs.  But you (the audience and my opponent) who consider yourselves liberal progressives, don’t give a hoot about minorities or blue collar workers.  Isn’t that an embarrassingly elitist position for you to take?”

My audience found that an unsettling thought.  They had no real rejoinder.

Afterwards several students came over to thank me and to say that they appreciated my viewpoint, as such thoughts are unavailable in their classrooms, or elsewhere on the SDSU reeducation camp(us).  And two more decided to vote for Prop 23 (two more than I expected).

He predicted that Prop. 23 would fail. I have, too. So, he said, the next governor and the Legislature will have to change AB 32.

A better idea: Another initiative to suspend — or outright repeal — AB 32.

But let me put it in plain English: AB 32 is anti-black and anti-Latino. It’s racist. It’s high-tech Jim Crow.

Oct. 18, 2010