Cal­i­for­nia has be­come Amer­ica’s can­ni­bal state

The Fresno Bee (Sunday) - - Opinion - BY VIC­TOR DAVIS HAN­SON

For more than six years, Cal­i­for­nia has had a top mar­ginal in­come tax rate of 13.3 per­cent, the high­est in the na­tion. About 150,000 house­holds in a state of 40 mil­lion peo­ple now pay nearly half of the to­tal an­nual state in­come tax.

The state Leg­is­la­ture sold that con­fis­ca­tory tax rate on the idea that it was a tem­po­rary fix and would even­tu­ally be phased out. No one be­lieved that. Cal­i­for­nia vot­ers, about 40 per­cent of whom pay no state in­come taxes, nat­u­rally ap­proved the ex­ten­sion of the high rate by an over­whelm­ing mar­gin.

Cal­i­for­nia re­cently raised gas taxes by 40 per­cent and now has the sec­ond-high­est gas taxes in the United States.

Cal­i­for­nia has the ninth-high­est com­bined state and lo­cal sales taxes in the coun­try, but its state sales tax of 7.3 per­cent is Amer­ica’s high­est. As of April 1, Cal­i­for­nia is now ap­ply­ing that high state sales tax to goods that res­i­dents buy on­line from out-of-state sell­ers.

In late 2017, the fed­eral govern­ment capped state and lo­cal tax de­duc­tions at $10,000. For high earn­ers in Cal­i­for­nia, the change ef­fec­tively al­most dou­bled their state and lo­cal taxes.

Such high taxes, of­ten tar­get­ing a small per­cent­age of the pop­u­la­tion, may have brought Cal­i­for­nia a bud­get sur­plus of more than $20 bil­lion. Yet Cal­i­for­nia is never sa­ti­ated with high new tax rates that bring in ad­di­tional revenue. It’s al­ways hun­gry for more.

Scott Wiener, a Demo­cratic state sen­a­tor from San Fran­cisco, has in­tro­duced a bill that would create a new Cal­i­for­nia es­tate tax. Wiener out­lined a death tax of 40 per­cent on es­tates worth more than $3.5 mil­lion for sin­gle Cal­i­for­ni­ans or more than $7 mil­lion for mar­ried cou­ples.

Given the soar­ing val­u­a­tions of Cal­i­for­nia prop­er­ties, a new es­tate tax could force chil­dren to sell homes or fam­ily farms they in­her­ited just to pay the tax bills.

Soon, even more of the Cal­i­for­nian tax­pay­ers who chip in to pay half of the state in­come taxes will flee in droves for low-tax or no-tax states.

What re­ally irks Cal­i­for­nia tax­pay­ers are the shoddy public ser­vices that they re­ceive in ex­change for such bur­den­some taxes. Cal­i­for­nia can be found near the bot­tom of state rank­ings for schools and in­fra­struc­ture.

San Fran­cisco ranks first among Amer­ica’s largest cities in prop­erty crimes per capita. The mas­sive con­crete ru­ins of the state’s quar­ter-built and now scaled back, multi­bil­lion-dol­lar high­speed rail sys­tem are al­ready col­lect­ing graf­fiti.

Roughly a quar­ter of the na­tion’s home­less live in Cal­i­for­nia. So do about one-third of all Amer­i­cans on public as­sis­tance. Ap­prox­i­mately one-fifth of the state’s pop­u­la­tion lives below the poverty line. About one-third of Cal­i­for­ni­ans are en­rolled in Medi-Cal, the state’s health care pro­gram for low-in­come res­i­dents.

Cal­i­for­nia’s so­cial pro­grams are mag­nets that draw in the in­di­gent from all over the world, who ar­rive in search of gen­er­ous health, ed­u­ca­tion, le­gal, nu­tri­tional and hous­ing sub­si­dies. Some 27 per­cent of the state’s res­i­dents were not born in the United States.

Last month alone, nearly 100,000 for­eign na­tion­als were stopped at the south­ern bor­der, ac­cord­ing to of­fi­cials. Huge num­bers of mi­grants are able to make it across with­out be­ing caught, and many end up in Cal­i­for­nia.

A lot of up­per-mid­dle­class tax­pay­ers feel that not only does Cal­i­for­nia fail to ap­pre­ci­ate their con­tri­bu­tions, but the state of­ten blames them for not pay­ing even more — as if pay­ing about half of their in­comes to lo­cal, state and fed­eral gov­ern­ments some­how re­veals their greed.

The hyper-wealthy lib­eral denizens of Hol­ly­wood, Sil­i­con Val­ley and the coastal en­claves of­ten seem ex­empt from the con­se­quences of the high taxes they of­ten ad­vo­cate for oth­ers. The su­per-rich ei­ther have the clout to hire ex­perts to help them avoid such taxes, or they sim­ply have so much money that they are not much af­fected by even Cal­i­for­nia’s high taxes.

What is the ide­ol­ogy be­hind such de­struc­tive state poli­cies?

Venezuela, which is driv­ing out its mid­dle class, is ap­par­ently Cal­i­for­nia’s model. Venezue­lan lead­ers be­lieved in pro­vid­ing vast sub­si­dies for the poor. The coun­try’s su­per-rich are of­ten crony cap­i­tal­ists who can avoid high taxes.

Sim­i­larly, Cal­i­for­nia is wag­ing an out­right war on the up­per-mid­dle class, which lacks the num­bers of the poor and the clout of the rich.

Those who ad­min­is­ter Cal­i­for­nia’s plagued De­part­ment of Mo­tor Ve­hi­cles and high-speed rail author­ity may of­ten be in­ept and dys­func­tional, but the state’s tax col­lec­tors are the most ob­ses­sive bu­reau­crats in the na­tion.

What is Sacra­mento’s mes­sage to those who com­bine to pay half the state’s in­come taxes and have not yet left Cal­i­for­nia? “Be gone or we will eat you!” Vic­tor Davis Han­son is a clas­si­cist and his­to­rian at the Hoover In­sti­tu­tion, Stan­ford Univer­sity. E-mail: au­[email protected] He wrote this for Tri­bune Con­tent Agency.

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