From: Lee Corbin (lcorbin@tsoft.com)
Date: Tue Jan 14 2003 - 22:03:02 MST
Spike writes
> > In 1900, Argentina was the 6th wealthiest country in the world.
> > What happened?
> >
> > Does anyone know of a book that chronicles all the bad moves
> > made by that nation?... Lee
>
> ... the state of Taxifornia in which you and I reside is
> about to demonstrate some important universal truths
> about politics.
>
> We see here a regime that has been very generous with
> other people's money. In the next few months we will
> need to deal with a state debt of 34 billlllllion
> dollars. Taxamento has suggested three solutions:
> increase income taxation of the rich, increase sales
> tax and increase tobacco tax.
>
> My notion is that in two of these cases, increasing
> tax rates will actually result in a reduction of
> capital flow. Increased income tax of the top income
> bracket will cause capital to flee the state.
Yes, already the top 1% pay a staggering proportion of
the tax total, and an article I read pointed out how
the direct punishment of this class can easily persuade
many of them to set up shop a couple of hours away in
Nevada.
So then there is less revenue, and the downward spiral
begins.
Not that there hadn't been warnings. From more than a
year ago, January 8, 2002:
http://www.pacificresearch.org/press/com/2002/kqed_02-01-08.html
Between 1998 and 2001, state government expenditures increased
by more than 35 percent and, the state added more than 25,000
new state employees.
The spending simply has been irresponsible.
The following article seemed to me to have no discernable ideological
bias, and was helpful towards my understanding, including the
possibility that the crises may even be exaggerated:
http://24hour.tri-cityherald.com/24hour/politics/story/712604p-5242257c.html
Spike continues
> Increases sales tax will stimulate internet sales,
> from which tax cannot be collected. Tobacco tax,
> well, the silly proles will still smoke I suppose.
> But I expect tobacco revenue alone will not even
> offset the loss of revenue from the other two tax
> increases, never mind the 34Gd deficit.
>
> What do you suppose will happen?
California is still a big, strong, healthy animal.
These bleedings weaken it, of course, but probably
won't IMO kill it for a long time.
The far worse aspect that seems impossible for most
people to realize is that economic growth is
exponential. Every time the big government enthusiasts
figure out a new way to "benefit" the people, they
take a state from one exponential curve to a lower one.
It's practically impossible to imagine what happens
when you KEEP DOING THAT.
Maybe the SF writers of the 30's and 40's weren't really
wrong: perhaps there would be moon colonies and maybe
even flying cars had we kept to a different exponential.
Lee
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