Cali Leading the Fight?Follow

Could the pendulum have swung so far?




http://www.mcclatchydc.com/nation/story/69467.html


and they're also looking at the possibility of a flat tax,



http://latimesblogs.latimes.com/lanow/2009/06/flat-tax.html


Good for California.

Elinda,

They're broke because of the socialists. Now let them institute a few conservative agendas and watch how fast they get back on their feet.

Elinda,



You realize that each state is supposed to be responsible for running itself right?

I guess you think other more responsible, conservative, states should bail out poor old california.



Change you can believe in.

I missed it. Each state should be able to fend for themselves, and it's Obama's fault. Somehow. Darn, can't believe I missed how we got from point C to point O!



Conservative proposals = taxes. Mmmmkay.

We bailed out banking firms, car manufacturers, stupid homeowners. Why should we not bail out one of our states. Do you think it would have NO impact on the rest of the country if california were to go bankrupt.

California won't scrap it's welfare system. Most of the welfare dollars, that ALL states utilize, are federal dollars. Arnie would be a fool with a HUGE problem on his hands if he somehow jeopardized TANF funds coming into his state.



It's only temporary. We've done it before. Maine's government is big in comparison to the population. Reducing work days is more palatable than cutting jobs (OR reducing the size of state gov - lawl).





Edited, Jun 8th 2009 4:41pm by Elinda

Which states are those? The ones on government welfare?

Yes, the red states.

Jophiel,

What do you have against eliminating federal income/corporate taxes in place of a flat tax?

California is in the state it's in because of the Democrat politicians they've elected and the socialist programs they've instituted.

California's problems stem from conservative principles to begin with.

California has a cap on the amount of tax that a homeowner pays on his house. (I believe the official law was Prop 13 or 15 or something.) This means that, past a certain home value, your home taxes do not go up. Prior to this, there was an escalating tax rate based on home value, so that million dollar estate owners got whammied with $100,000 land tax bills. Enough people whined and lobbied and got it capped.

This caused a massive bubble to form in California where home prices continued unchecked because the tax would be the same no matter the price of the home. Say, for example, the homestead tax on a one hundred thousand dollar home is $5000 a year, on a $200K home its $10K a year, on a $300K home it's $15K a year, and caps at $17500 for a $350,000 home. Since the taxes paid on a home stop reflecting the value of the home past $17500, home prices spiraled out of control. The same sort of ranch house I grew up in in south Augusta, which my parents bought for $70,000 in 1980, sells for ten times that much in a California suburb.

As a result of this, California became the state with the largest number of "jumbo" mortgages, or mortgages greater than $480,000. These jumbo loans often had higher interest rates, but hey! taxes are still only $17,500 a year, so a 30 year fixed rate mortgage on a million dollar home is still doable if you have a combined dual income over $300,000, right?

Then the economy started to crash. As more and more homes went into foreclosure because people lost their jobs (I believe that California accounts for close to 30% of nationwide foreclosures), then California lost its tax revenue. The tax model was built on pure quantity. When the numbers for people actually paying their taxes on the homes went down, California's revenue stream collapsed, and they had no other means to make up for the shortfall.

Sadly, California needs the very social programs that are going to be shut down greater than it did before.

If conservative principles had NOT been applied -- if they had kept the escalating tax system on houses - then housing prices would have more realistically reflected the value of the property, and the only million dollar homes would be actual estates and mansions, not ranch houses in a suburban neighborhood.

Elinda,



This is simply not true. I wish I could talk you into reading the "Fair Tax" book. You would be amazed at how much you would learn.

Well, I'll check it out. Ok, I probably won't. Though, I've worked in and studied in the public policy realm for years and feel like I have a pretty good grasp of the current tax structure workings as well as how others might work.

Honestly Varus, the likelihood of a flat tax reducing your income tax burden is pretty slim. Maybe you should actually take some classes about tax structures that attempt to teach fact instead of relying on fictional, narrow-minded, unqualified accounts of non-reality from people like Neal Boortz.

Okay, that really reduces the percentage of income that goes towards taxes for people the more they make.

I'm not sure why Varrus isn't supporting my idea for states being ineligible for federal funding beyond what they contribute to the coffers. I mean, we need some sort of federal pot for things like national infrastructure but I'm sure Varrus would agree that it's an insult to state's rights if some state is receiving $1.20 in federal money for every $1.00 they contribute. This means other states are supporting it via federal welfare.

If some states are making more money than others then they shouldn't be punished for the fact that the welfare states can't step up their game and try harder. Let those states keep their own money and benefit form it instead of giving handouts. States such as California can choose to keep that extra money and spend it on internal improvements, welfare, a golden unicorn for every child or whatever else.

Edited, Jun 8th 2009 3:18pm by Jophiel