Yahoo article
The one tax increase I was hugely in favor of, the gas tax increase, was removed at the last minute. Ugh. Yes, I'm a bit obsessed in my belief that our trade deficit is part of what made this mess. Oil is far to large a component of that deficit to not make strategic policy changes to cut consumption.
Many of the other tax increases... I consider a problem.
I contend that for a nation to try to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle. -- Winston Churchill
Wise taxes and tariffs have a role. I would have supported up to a 50 cent per gallon increase in gasoline taxes! We need better roads, a bus system, and even rail. (I expect two people to dislike the last: my best friend and Rob Dawg.) Then again, I have relatives who design rail projects and if they could be installed from precast (in a factory) concrete assemblies, it actually makes economic sense. ;) Assuming you also build bus terminals to anchor major destinations (e.g., LAX, union station, Burbank airport, etc.)
I'm glad there is a budget. I'm just very upset the wisest tax in the whole package was cut. The only problem is that in six months the state will have to panic and put together a revised budget to handle the further drops in income, capital gains, sales, and property taxes.
Got Popcorn?
Neil
Showing posts with label California. Show all posts
Showing posts with label California. Show all posts
Thursday, February 19, 2009
Tuesday, November 18, 2008
CA debt projection for next year
I'm amazed at the debt projection trend for 2009 for California. It was planned to be a $9billion dollar debt. I've gone through news articles on Google to see how its growth with time.
Basically, the debt projection is growing $1.2 Billion per month give or take.
late comment: The dates on the x-axes are the projected debt by news article date in 2008. In September of 2007, the projection was ~$9billion.
Anyone who thinks raising taxes needs to talk to someone who employees people. Everyone from my employer to my mechanic will 'suck up' tax increases by reducing head count in California. As much as people like to discredit Reaganomics, the reality is that we've gone too far on the Laffer curve in the state of California. Make fun of 'supply side' economics all you want. But I know of more than a few doctors who will not expand their offices as the added take home revenue cuts their hourly wage. Heck, I was able to see one business study (about a year ago) where taxes pushed an expansion so far into the red, that if the business owner had expanded his take-home would have dropped!
What's sad is economically California is far better off than Florida, Arizona, Nevada, Michigan, and Ohio. Sadly, I think it will take the layoffs of 2Q 2009 and 3Q 2009 to wake people up. :( The layoffs until then will be trivial in California. (Not the case for Michigan and Ohio.) Yes, I called a *really bad* economic year trivial.
Now when will people wake up and realize turning factories into condos and shopping malls is only good if the overall economy is in balance. Oh, I agree with the mills of Connecticut being turned into apartments and condos. Those jobs should have been automated away. But driving out jobs that pay more than the median income for a region? That's just silly.
I'm going to be *very* curious to see how the advertising slump (which has gone past the tipping point) and the Venture capital crunch effect California. I see no way either will reverse within two years; its going to be dot bomb part deux with interest due.
Got Popcorn?
Neil
ps
see the supply/demand curve in my last post to see why the 120 day attempted halt in foreclosures in California is doomed. It might be remembered as the state's Smoot-Hawley.
Basically, the debt projection is growing $1.2 Billion per month give or take.
late comment: The dates on the x-axes are the projected debt by news article date in 2008. In September of 2007, the projection was ~$9billion.
Anyone who thinks raising taxes needs to talk to someone who employees people. Everyone from my employer to my mechanic will 'suck up' tax increases by reducing head count in California. As much as people like to discredit Reaganomics, the reality is that we've gone too far on the Laffer curve in the state of California. Make fun of 'supply side' economics all you want. But I know of more than a few doctors who will not expand their offices as the added take home revenue cuts their hourly wage. Heck, I was able to see one business study (about a year ago) where taxes pushed an expansion so far into the red, that if the business owner had expanded his take-home would have dropped!
What's sad is economically California is far better off than Florida, Arizona, Nevada, Michigan, and Ohio. Sadly, I think it will take the layoffs of 2Q 2009 and 3Q 2009 to wake people up. :( The layoffs until then will be trivial in California. (Not the case for Michigan and Ohio.) Yes, I called a *really bad* economic year trivial.
Now when will people wake up and realize turning factories into condos and shopping malls is only good if the overall economy is in balance. Oh, I agree with the mills of Connecticut being turned into apartments and condos. Those jobs should have been automated away. But driving out jobs that pay more than the median income for a region? That's just silly.
I'm going to be *very* curious to see how the advertising slump (which has gone past the tipping point) and the Venture capital crunch effect California. I see no way either will reverse within two years; its going to be dot bomb part deux with interest due.
Got Popcorn?
Neil
ps
see the supply/demand curve in my last post to see why the 120 day attempted halt in foreclosures in California is doomed. It might be remembered as the state's Smoot-Hawley.
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