Liberalism's Laboratory

Posted: Nov 08, 2012 12:38 PM

If there is anything for which I am grateful this morning, it is that we left the state of California over a year ago. Sweeping changes have overtaken the state, and it isn't going to be pretty. For one, Democrats now have a 2/3 majority of the state legislature.  Here's what that means:

 Democrats can increase taxes without asking voters or Republicans; put a constitutional amendment on the ballot; override the governor's vetoes and suspend the minimum funding guarantee for K-12 schools.

What's more, Californians passed Proposition 30.  It raised California's sales tax levy -- already the highest in the nation -- yet farther.  It also boosted state income tax on everyone making over $250,000 per year.  Those making more than $1 million per year, who are already taxed at 10.3%, will now be taxed at 13.3% -- the highest of any state. 

Don't let the NY Times  fool you.  Californians did not "back taxes to avoid education cuts."  That would be accurate if they had voted in a broad-based tax alternative. No, they backed taxes on "the rich" to avoid education cuts. And now we will see what happens.

So what happens now? For one, California is now more heavily reliant than ever on taxes from "the rich" -- meaning more "boom and bust" volatility.  It also means that there may be an exodus from the state -- for real.

Sure, people always joke (or dream) about leaving California. But over the last two days, I have taken phone calls from several California friends. One's husband has already put real estate on the market, the theory being that "first man out" is the least hurt.  Another is planning a visit, to drive through the NYC metro area to start figuring out where they might want to come.  Yet another said they were in the midst of deciding whether to head for the Dallas area or For Meyers, Florida.

The tax increases, coupled with the installation of a legislature capable of imposing taxes without any input from Republicans or the public, coupled with the federal tax increases coming courtesy of President Obama has concentrated a lot of minds.  

In a sense, California is liberalism's laboratory.  There, you see what happens when you try to solve every budget problem with tax increases (especially on "the rich"), unions hold enormous sway, ethnic and cultural resentments are assiduously cultivated on all sides.  Everything just gets worse.  There's a reason, as reported in The Wall Street Journal, that the number of businesses leaving California has increased five-fold since 2009 because of high taxes and excessive regulatory costs.

My friends can leave California and move -- to Texas, Florida or even the NYC metro area (which looks like a tax haven by comparison).  There are 49 other states.  But there is only one America.  That's why we can never let the USA go the way of California.