Uncle Sam Giveth and Arnold Taketh Away
In order to meet a $40 Billion dollar deficit....CA is taking serious steps to tighten the GAP including very large tax increases AND spending cuts.
From the LA TIMES:
A copy of the fiscal blueprint obtained by The Times shows that the deficit would be wiped out with $15 billion in cuts; $14.4 billion in new and increased taxes on sales, vehicles, gasoline and personal income; $12 billion in borrowing against future profits from the lottery; short-term loans; and various accounting maneuvers. Some of the cuts and borrowing could ultimately be offset by billions of dollars in federal aid that California would receive in the economic stimulus package that passed the U.S. Senate this week and is awaiting final approval in Congress.
$14.4 Billion in NEW taxes??????
Scheduled cost-of-living increases for welfare recipients would be canceled, and mental health and early childhood education programs created by voter-approved ballot initiatives would be cut by more than $830 million. The state would cut spending on local public transit by $459 million.
Vehicle license fees would nearly double, going from the current rate of 0.65% to 1.15% of the value of a car or truck. The sales tax would increase by 1 cent, raising the rate in Los Angeles County to 9.75%. Gasoline taxes would increase by 12 cents a gallon. And Californians would pay a new surcharge on their personal income taxes, amounting to 2.5% of their total tax bills.
If you make $70K or more per year.....that might be over $1700 in additional state tax payments alone. Plus at least few hundred for the sales tax and gas tax bringing very close to $2000 in increased taxes without blinking an eye??????
For Californians already struggling with falling home prices, services being cut and large job losses.....how do you think the taxpayers will like a tax plan that boost taxes AND cut services.......and this plan does NOT factor continued falling revenues from the slowing economy.
This whole game of hide the chicken is a joke. The longer we take to restructure....the longer and deeper this depression will last. Four banks closed yesterday. Hundreds more likely in the upcoming months. The S&P has negative earnings and the Government will have to rebate billions in NOL carrybacks.
We are rapidly heading down the path of a taxpayer revolt if we don't address the problem comprehensively.
For those who like controversial international politics, economics and banking, I suggest you see the movie The International. Like usual, my wife fell asleep for the Friday late show but I found the fiction remarkably parallel to real life. There are a few subtle points in the movie which confirm why wars are often started for perpetuating conflict and NOT for victory
In the world of Alstrynomics, fiction is often less strange than reality.
How the heck you have a Democratic President cutting taxes and a Republican Governator more than offsetting the Federal cut with a State INCREASE in taxes? Not only that....what is going to happen next year when the deficit gets wider????
Is anyone thinking anymore my soon to be fellow comrades??????? How much longer do you think Americans will be able hold out before more and more is taken away?????
An interesting thought.....will governments and banks be forced to start world conflicts in order to divert attention away from internal strife???? It often takes the form of collective punishment of the many for the behavior of the few....the wrapping always deceives the masses....but the result is always the same with massive death and destruction on all sides. Will Gold and Silver be confiscated in order to protect a nations currency???? Will 100% of income AND wealth be taxed in order to permit Government to operate????
These are the questions you should be focusing on when making investment decisions......but something CNBS will never reveal.
And people make fun of Alstrynomics........??????