So it turns out that “California Comeback” was based on smoke and mirrors. IBD has the numbers:
This time last year, liberals around the country were trumpeting the big fiscal comeback of the Golden State in the wake of Jerry Brown’s giant tax increase — Proposition 30.
That initiative was passed by voters on Nov. 6, 2012, and it raised the personal income-tax rate on taxpayers making over $250,000 for singles and $500,000 for married couples to as high as 13% — which is the heaviest tax penalty on working and investing in the nation outside of New York City.
What was especially devious is that the tax hit was made retroactive to January 2012. Sacramento was so desperate for money that nobody seemed to mind this after-the fact taxation is really a form of confiscation.
In the short term, it worked and revenues climbed a whopping 21% because California’s top 2% had to pay taxes twice in 2013 — once on their current-year income and a supplemental check to pay for the retroactive tax on income from the year before.
And today? Sacramento’s personal income tax collections declined 11.1% last quarter, indicating that California is all out of tricks for disguising its serious spending problem. Besides, they can only hike taxes retroactively one time, right?