Wednesday, December 14, 2011

Californians Poised to Hose Themselves Again

Poll results this week indicate that California's lotus eating majority is likely to approve its moonbeam governor's proposal to increase -- supposedly temporarily -- the state sales tax and the income tax rate on those earning a million dollars or more a year. The increases are being promoted as "necessary" to avoid spending cuts the pols can use to best frighten and stampede the voters.

Hiking the sales tax, which already is the nation's highest, will be a bonanza for retailers in neighboring states and those engaged in doing business on the internet. And, as other states -- but not freeloaders always willing to benefit at the expense of others -- have learned, increasing income taxes on high earners almost always yields less than projected because some of the targeted productive citizens can and do relocate to other jurisdictions.

At some point prior to the scheduled expiration date of the tax increases, the economy will improve, tax receipts will rise, yielding a surplus, which the politicians of course will spend . . . and commit to continue spending on new and expanded programs that of course will come to be seen as vital. So the hosing will come five years down the road, when taxpayers will be asked to make the increases permanent to avoid having to eliminate or cut the increased spending that will have come to be seen as essential. The arguments will be that continuing the 'temporary' rates will just continue what already exists and therefore not constitute a tax increase.

. . . and so goes the perpetual upward tax and spend ratchet/racket. 

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