11-10-2010, 01:46 PM
Fan In Colorado:
In terms of California\'s budget, I\'m not an expert by any means, but I suspect that what\'s needed to balance it is a mix of spending cuts and tax increases. Unfortunately, the Republican Party -- at least at the national level -- refuses to entertain tax increases under any circumstances. Making things even more difficult for California are Prop. 13 and other measures that make it difficult to maintain existing revenue streams. I no longer live in California, so I will defer to others here, but I believe the state\'s revenue base is extremely pro-cyclical, meaning that tax revenues skyrocket in good economic times and plummet in bad times. This is a problem without a good solution, given the constraints that the state\'s voters have placed on the state legislature.
I don\'t know what the best mix of budget cuts and tax increases is in California, but I generally think that funding for education at all levels is vitally important. A good education system is a prerequisite for long-term economic growth, and California\'s public universities (along with Stanford, of course) have provided the r&d backbone for the state\'s dynamic economy for decades. I also think that prisons are a great place to look for savings -- UCLA criminologist Mark Kleiman has some great ideas in this regard. I\'m sure there will have to be cuts in other areas as well, and that public-employee unions will have to absorb some of the costs.
In terms of tax increases, I do think the rich should pay more of the cost than the middle class and the poor. I agree with you that there are lots of loopholes that rich people use to reduce what they pay in taxes. But data at the federal level actually show that the rich nonetheless pay a lot of money in taxes. The top one percent of earners - who had an adjusted gross income of $380,000 - paid 38 percent of the income taxes collected by the federal government in 2008. If you don\'t believe me, follow this link:
http://www.taxfoundation.org/news/show/250.html
In terms of California\'s budget, I\'m not an expert by any means, but I suspect that what\'s needed to balance it is a mix of spending cuts and tax increases. Unfortunately, the Republican Party -- at least at the national level -- refuses to entertain tax increases under any circumstances. Making things even more difficult for California are Prop. 13 and other measures that make it difficult to maintain existing revenue streams. I no longer live in California, so I will defer to others here, but I believe the state\'s revenue base is extremely pro-cyclical, meaning that tax revenues skyrocket in good economic times and plummet in bad times. This is a problem without a good solution, given the constraints that the state\'s voters have placed on the state legislature.
I don\'t know what the best mix of budget cuts and tax increases is in California, but I generally think that funding for education at all levels is vitally important. A good education system is a prerequisite for long-term economic growth, and California\'s public universities (along with Stanford, of course) have provided the r&d backbone for the state\'s dynamic economy for decades. I also think that prisons are a great place to look for savings -- UCLA criminologist Mark Kleiman has some great ideas in this regard. I\'m sure there will have to be cuts in other areas as well, and that public-employee unions will have to absorb some of the costs.
In terms of tax increases, I do think the rich should pay more of the cost than the middle class and the poor. I agree with you that there are lots of loopholes that rich people use to reduce what they pay in taxes. But data at the federal level actually show that the rich nonetheless pay a lot of money in taxes. The top one percent of earners - who had an adjusted gross income of $380,000 - paid 38 percent of the income taxes collected by the federal government in 2008. If you don\'t believe me, follow this link:
http://www.taxfoundation.org/news/show/250.html