California Heads for a Budget Crunch | Hacker News Reader

California Heads for a Budget Crunch

wsj.com

16 pointsmfiguiere13 comments

Note that this is one of their opinion pieces, not a news story. California budget information can be found at https://ebudget.ca.gov/2022-23/pdf/Enacted/BudgetSummary/Sum...

Note that the WSJ seems to entirely ignore local tax revenue. Any reasonable analysis of a state budget would automatically include both state and local finances since they are so intimately intertwined. Hence the WSJ claim of how dependent california is on high-value income tax: they can make that claim because they ignore other taxes

The right wing media has been dooming about the California budget since Jerry Brown fixed it. California remains one of the largest economies in the world, this isn’t even close to their biggest problem (the problem being housing and property tax).

>Progressive demands will then mount to raise taxes again on high earners, as Democrats did in 2012.

Except voters in the state just soundly rejected a proposition to fund some electric conversions by taxes on the top earners.

California's top 3 marginal income tax rates are also temporary, although one could argue they will likely be extended or made permanent at some point.

"Three temporary rates – 10.3 percent, 11.3 percent, and 12.3percent. These rates will be repealed on December 1, 2031 and would no longer apply to taxable years on or after January 2031 "

California also had over $30 Billion in unemployment fraud: https://www.kcra.com/article/analysis-edd-fraud-326-billion-...

'The top 0.5% of taxpayers pay 40% of state income tax.'

This seems very risky, seeing how easy it is for those taxpayers to move to another state.

And just yesterday Newsom agreed to release $1B to help the homeless. Money he, and California, does not have.

They're about to get a big investment on electric infrastructure from the Federal government, so it'll all work out.

Given that CA has been relatively high tax for high earners for many decades now, and has had the highest incomes for decades, the probability of higher earners moving away seems to be low.

Well a lot has changed. Remote work is more common. Many companies shuttered offices. Thus momentum that had been built up that was holding people in the state has ended.

That is a good point, remote work could provide an opportunity to move for those only in CA for the economic opportunities. But I would assume many will continue to be willing to pay a premium to live in CA.

It is a good point although I wonder how much of the top 0.5% simply employees with big paychecks or are employers and business owners who are personally invested in real estate and companies that are based in the state. While some do things like establishing residency in Nevada for example it can be a challenge.

https://archive.ph/2022.11.20-185524/https://www.wsj.com/amp...

Gosh they were celebrating unprecedented surplus just recently. How much things can change in a few months!

Easy to make it look bad without taking local taxes into account, which make up a large portion of overall tax revenue. This is a shit piece.

Reply on news.ycombinator.com