Here’s a depressing but documented comparison of California taxes and economic climate with the rest of the states. The news is breaking bad, and getting worse (I keep updating this fact sheet):
California has the 3rd worst state income tax in the nation. 9.3% tax bracket starts at $46,766 for people filing as individuals. 10.3% tax starts at $1,000,000.
Highest state sales tax rate in the nation. 7.25% (as of 1 July – does not include local sales taxes)
http://www.taxfoundation.org/files/bp60.pdf Table #15
California corporate income tax rate (8.84%) is the highest west of the Mississippi (our economic competitors) except for Alaska. http://www.taxfoundation.org/files/bp59.pdf Table #8 — we are 8th highest nationwide.
California’s 2011 Business Tax Climate ranks 2nd worst in the nation. http://www.taxfoundation.org/news/show/26806.html
Fourth highest capital gains tax 9.3% http://www.thereibrain.com/realestate-blog/capital-gains-tax-rates-state-by-state/109/
In virtual tie with CN and NY for highest gasoline tax (averaging 67.5 cents/gallon) in the nation, (July, 2011).
http://www.api.org/statistics/fueltaxes/ (also CA has the highest diesel tax – 76.9 cents/gallon)
California is ranked 14th highest in per capita property taxes (including commercial) – the only major tax where we are not in the worst ten states. But CA property taxes per owner-occupied home were the 10th highest in the nation in 2009.
California’s 2011 “Tax Freedom Day” (the day the average taxpayer stops working for government and starts working for himself) is the 6th worst date in the nation – up from 28th worst in 1994, but down from 4th worst in 2009. CA “improved” only because of our state’s soaring unemployment rate – the new tax dodge!
California has the 2nd highest state unemployment rate. (July, 2011) – 12.0%. National unemployment rate 9.1%. National unemployment rate not including CA is only 8.7%, making the CA unemployment rate 37.9% higher than the other 49 states. http://www.bls.gov/lau/
California needlessly licenses more occupations than any state – 177. Second worst state is Connecticut at 155. The average for the states is 92. http://cssrc.us/publications.aspx?id=7707
For the 2007-08 school year, the Los Angeles Unified School District spent $29,780 per student. The district also has the country’s second lowest graduation rate of 40.6%. http://www.calwatchdog.com/2010/08/20/lausd-spends-30k-per-student/
CA public school teachers the highest paid in the nation. CA students rank 48th in math achievement, 49th in reading.
http://www.lao.ca.gov/reports/2011/calfacts/calfacts_010511.aspx page 36
1 in 5 in Los Angeles County receiving public aid.
California has 12% of the nation’s population, but 36% of the country’s TANF (“Temporary” Assistance for Needy Families) welfare recipients – more than the next 7 states combined. Unlike other states, this “temporary” assistance becomes much more permanent in CA. http://weblog.signonsandiego.com/weblogs/afb/archives/034662.html
California prison guards highest paid in the nation. http://www.caltax.org/caltaxletter/2008/101708_fraud1.htm
For every dollar California pays to D.C., we get back 78 cents. We rank 7th worst. http://www.taxfoundation.org/research/show/266.html
California is the worst ranked state for tax administration – another anti-business factor.
California now has the lowest bond ratings of any state, edging out Louisiana.
The American Tort Reform Association ranks CA the worst state “judicial hellhole” – extremely anti-business.
America’s top 500 CEO’s rank California “the worst state in which to do business” for the 7th straight year (May, 2011).
http://chiefexecutive.net/best-worst-states-for-business (It’s worth reading the short article, and especially the part about California.)
California, a destitute state, still gives away college education at fire sale prices. Our community college tuition is the lowest in the nation. How low? Nationwide, the average community college tuition is about three times higher than California CC’s.
http://www.hecb.wa.gov/research/issues/documents/TuitionandFees2009-10Report-Final.pdf Chart 5 on page 8
This ridiculously low tuition devalues education to students – resulting in a 30+% drop rate for class completion. In addition, 2/3 of California CC students pay no tuition at all – filling out a simple unverified “hardship” form that exempts them from any tuition payment, or receiving grants and tax credits for their full tuition. http://tinyurl.com/ygqz9ls
On top of that, California offers thousands of absolutely free adult continuing education classes – a sop to the upper middle class. In San Diego, over 1,400 classes for everything from baking pastries to ballroom dancing are offered totally at taxpayer expense. http://www.sdce.edu
Protests about increased UC student fees too often ignore one crucial point — all poor and most middle class students don’t pay the “fees” (our state’s euphemism for tuition). There are no fees for California families with under $80K income. Moreover, Pell Grants and federal tuition tax credits covered the total 2009-10 fee increases for nearly 3/4 of all undergraduates with household incomes below $180K.
California residential electricity costs an average of 32.4% more than the national average (far higher in San Diego County). For industrial use, CA electricity is 70.8% higher than the national average (May, 2011).
It costs 38% more to build solar panels in California than in Tennessee – which is why European corporations have invested $2.3 billion in two Tennessee manufacturing plants to build solar panels for our state.
Consider California’s net domestic migration (migration between states). From April, 2000 through June, 2008 (8 years, 2 months) California has lost a NET1.4 million people. The cumulative net annual income lost from this 8 year out-migration comes to about $26 billion. Net departures slowed in 2008 only because people couldn’t sell their homes. In 2010 we lost “only” 72,000 net people to domestic migration. Again, note that this is NET loss.
http://www.mdp.state.md.us/msdc/Pop_estimate/Estimate_08/table5.pdf and http://tinyurl.com/2010-CA-lost-72000 and http://interactive.taxfoundation.org/migration/
These are not welfare kings and queens departing. They are the young, the educated, the productive, the ambitious, the wealthy (such as Tiger Woods) – and retirees seeking to make their pensions provide more bang for the buck. Some of these departing seniors are retired state and local government employees fleeing the state that provides them with their opulent pensions – in order to avoid the high taxes that these same employees pushed so hard through their unions. And once they move out of California, our state can no longer tax their California-paid pensions.
As taxes rise and jobs disappear, we lose our tax base, continuing California’s state and local fiscal death spiral. This downward spiral must stop NOW.
NOTE: To see the latest version of this “Breaking Bad” column, plus other taxpayer items of interest, go to my blog at http://www.RiderBlog.NotLong.com, or my Facebook page at http://www.Facebook.com/Richard.Rider. This fact sheet also is available free upon request as a 2 page Word file for printing.
Breaking Bad: California vs. the Other States
by Richard Rider, Chairman, San Diego Tax Fighters
Revised 22 August, 2011
Updated version online at: http://www.RiderBlog.NotLong.com
Email: [email protected]
Facebook blog page: http://www.Facebook.com/Richard.Rider