
California: Failed State - robg
http://www.claremont.org/publications/crb/id.1650/article_detail.asp
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grandalf
Anyone who thinks seriously that California is a failed state ought to
consider that states are not allowed to used deficit financing the way the US
Federal government is.

Imagine for a moment if a small portion of the Federal taxes paid by
California residents could be allocated to fix the state's budget mess.
Instead, one of the richest, most productive states sends most of its revenue
to DC where it is spent on wars and bailouts.

It is also absurd to blame any of it on California's progressives. The
citizens of California pay far more for international wars than they do for a
slightly more generous entitlement system.

Personally I'd much rather have progressive policy experimentation happen at
the state level (where it can be easily viewed as working or not working) than
at the Federal level where a bad idea is likely to remain on the books for
decades.

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hga
California seems to be incapable of living within its means. Whatever money it
sends to D.C. is simply not germane to the question of it balancing its
budget.

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blahedo
It's at least somewhat germane. California is, I believe, one of many states
that sends more to the federal gov't in taxes than its citizens receive in
federal benefits. If some of that federal money were turned back to the state,
they'd be able to implement their progressive policies without exceeding their
budget _or_ raising taxes. Alternatively, if the fed spent more on progressive
stuff instead of elective foreign wars, California could scale back their own
spending on similar programs and once again be within budget while still
retaining the progressive policies they seem to desire.

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cwan
That'd be a more reasonable argument if say Californians' taxes were used to
fund the progressive policies of other states (though it is true that
Californians get something like 80 cents per dollar sent to Washington).
Californians however at an individual level are subject to the same federal
tax rules as people in other states (and if they were poorer I'm sure the
pendulum would swing the other way).

This being the case, it is even more remarkable the financial straits that
California finds itself in. It has some of the biggest advantages
geographically and started with and still generally has a wealthy and high
income tax base.

The state of California also chooses to tax well above that of other states -
stats here: <http://www.taxfoundation.org/research/topic/15.html> \- and still
manages to run a massive deficit.

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grandalf
California state taxes are a small fraction of what most California residents
pay in overall taxes.

Plus, because of California's high cost of living, a worker in California is
paid more to do the same work as in another state, yet falls in a higher
federal tax bracket and so pays thousands more per year in Federal taxes for
doing the same work and experiencing the same standard of living as a citizen
of another state.

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cwan
Sure the cost of living might be higher, but the opportunity for making money
is also higher - or that's how it's supposed to work. One of the problems in
California is that the benefits are now beginning to under weigh the costs
which is why you have a outflow of migration towards surrounding states like
Texas. Many of the problems are now structural like higher state and municipal
taxes - so that despite getting ever fewer benefits, taxes are ever
increasing.

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grandalf
I concede that CA has higher state taxes, but I don't see why this is
particularly relevant when I and most Californians pay a _massive chunk_ of
our income to the Federal government, which spends the money frivolously and
doesn't even have a balanced budget.

California could add a few percent to state income taxes and inconvenience its
residents minimally in comparison with the high rates of Federal taxation
Californians experience (due to higher cost of living).

It's just so far out of proportion that I consider it absurd to spend much
time worrying about California's budget.

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pmorici
"massive chunk of our income to the Federal government"

So does every other resident of every other state, you act like this is some
problem unique to CA. Not to mention that if the sate did raise it's income
tax that would help it's residents pay a lower amount of federal tax because
don't you normally subtract your state tax liability from your earnings to
determine your federal taxable income? Sounds like you need to write your
legislature and beg for an income tax increase.

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grandalf
Well, due to inflated cost of living, Californians tend to be in higher tax
brackets than workers in other states, which leads to a disproportionate
amount of money being paid into Federal taxes.

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hga
I found this essay of the author's to be more interesting: _The Big-Spending,
High-Taxing, Lousy-Services Paradigm_ (<http://www.city-
journal.org/2009/19_4_california.html>). In it he discusses how it's no longer
high tax/high services vs. low tax/low services.

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mmt
What I find unfathomable is that unionization of public employees is
permissible, legally and ethically.

What are the possible abuses when there's no profit to be made?

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ams6110
Politicians in charge of employees? The possible abuses boggle the mind

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johnl
I would say failed bureaucracy, not failed state.

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petercooper
A failed state that would be the world's 8th biggest economy if it were its
own country..

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absconditus
I find these numbers to be more meaningful:

[http://en.wikipedia.org/wiki/List_of_U.S._states_by_GDP_per_...](http://en.wikipedia.org/wiki/List_of_U.S._states_by_GDP_per_capita_%28nominal%29)

