I won’t quote all the statistics, but again, in general, California employees make considerably more on average than other state employees elsewhere. The result is that the current furious state employee is, in essence, saying, “All you lower-paid and unemployed taxpayers, now you better listen up: you must pay more taxes, even beyond the current highest rate in the nation, so that I, the far better paid and pensioned employee than you, can continue unquestioned in my current, far more important job.”
No more juice to squeeze…
On the tax side, California has the highest income tax rates in the country. Its gasoline and sales taxes are also the steepest. Prop 13 limitations keep the rates of property taxes competitive with other states, but the assessments on property are so high in California that often homeowners pay almost the same as many with lower real rates elsewhere. Some 3,500 Californians, mostly on the higher end of the income spectrum, are believed to be leaving per week, mostly fleeing to low or no-income-tax states. I assume their thinking is something like, “I can save $20,000 a year in taxes and my children won’t be going to public schools that score 46-48th in national rankings of the states in math and science.”
Barking at the moon
I have talked with a few students and employees over the last year and I think the angst behind the protests runs something like this. In sum, apparently state employees, teachers, and students believe that there is either (a) a “stash” of money somewhere that is unspent and could easily ease their pain (e.g.,” they” have all sorts of money and are lying to us about its undisclosed location); (b) we could raise income, sales, and gas taxes to even more record highs and encourage perhaps 4,000 a week to leave in consequence (e.g., why do some need BMWs or private planes when “we” need cheaper tuition?); (c) the 1% who pay about 50% of the state income tax burden could easily pay 80-90% of it (e.g., I get along on $50,000, so why can’t someone who makes $300,000 give $250,000 of it to meet “our” needs?); (d) we could renounce our debts to state bond holders (if they have excess cash to buy bonds, why are they so greedy not to give “us” some of it?) and use the savings for more subsidies, entitlements, and salaries (without my job at the DMV, prison, school (fill in the blanks), the rest of you could not survive.)
Note lost in the present “I accuse” acrimony (cf. Greece) is any serious, concrete plan of how to make up the budget shortfall. Completely absent is any recognition that we are the highest taxed state populace in the country, and yet have some of the most dismal infrastructure and schools to show for it. And that is logical, not a paradox.
Again, the Greek model
In the long run, we all know the medicine: cut drastically state expenditure by freezing employment and salaries, and cut red-tape, give tax cuts and incentives for businesses to stay in, or move to, the state to increase the number of jobs and create more wealth. But in the short term, here are some possible discussion points, on both revenue and expenditure, that we are not allowed to talk about in the current conundrum:
Place a total limit of $250,000 on all state salaries, including income from overtime and pensions. Radically curtail the number of administrators in both public schools and the state university system (return most to the classroom). Eliminate half of the state boards, and bar term-limited politicians from serving on them. Open up more gas, oil, mineral, and timber land. Restore water to central valley farming. Monitor for tax purposes the many billions sent out of state to Latin America, tax-free, by California residents who are illegally residing in the state. Focus on the large incomes of a few Californians that are manipulated to be taxed at the capital gains rate rather than the income tax rate. Monitor the vast underground market of cash sales transactions that are not taxed at all, and the general noncompliance with state revenue laws of open air markets, roadside food vendors, and off the books day workers. Go after the many millions who ignore traditional fees and assessments on everything from proper zoning laws, statutes requiring single family occupant homes; liens; car registration, etc. Reexamine the abuse of state disability and unemployment entitlements by those who work off the books for cash or are capable of working but are not currently.
What we do know
Statism and spiraling public sector employment and entitlement (once again cf. southern Europe) alter the public mindset (see Aristophanes’ Knights or Wasps).
When one assumes the state (or ‘they’) is responsible for all good things, then natural, quite interconnected corollaries follow.
Radical environmentalism is usually the creed of either the hyper-wealthy or the tenured state employee who has lost appreciation that real money does not just appear in the mailbox, but must be created in a rather cruel, unforgiving world.
Utopianism ensures that anything good (and life in the U.S. is very good) is really not ever good enough, because it is not quite perfect.
Equality of result is a natural impulse, since public employment and entitlement mean spiraling private sector taxes, which mean someone else does not deserve to keep what they earn.
Pacifism follows, since military expenditure diverts needed money from entitlement.
Moral relativism is the shared creed, since absolute rules and laws can at times be cruel and work to deny ever expanding appetites.
Coercive government is required to hunt down the lone wolf holdouts and to justify, big brother style, the sameness of culture and the elite bureaucracy that need not follow the rules it imposes on others.
Agnosticism and atheism become more popular as government assumes the role of deity and brags on its heaven on earth powers (what evil God would dare allow inequality on earth?). The government check is far better than the Sunday service.
Depopulation eventually arrives as life is just too good to waste in getting up all nights with colicky babies and dirty diapers; adults (wrongly) assume the state, not children, will care for them in their “golden years” (cf. the August 2003 French rush to the beach for the annual state-subsidized vacation, as some 15,000 elderly were left behind to be roasted in their non-air-conditioned Paris apartments — at the very time the French government was damning the US for the supposed inhuman removal of Saddam Hussein.)
I think I just summed up southern Europe, Northern Europe in about a year, California in about five years, and the U.S. in about ten.