A couple of weeks ago, I jumped into the fray of an online debate (on the PHO list/) about how California should deal with its looming bankruptcy. The debate essentially broke into two camps a) tax and spend and b) no new taxes, less spending. It would likely be too “taxing” to have the dissertation on the merits of the two camps, but I figured I would take a look at the hard numbers to determine which side has the better argument.
The numbers weren’t pretty. CA has some of the highest tax rates in the country. With those high tax rates you’d think there would be fairly high quality services provided by the state. Unfortunately, those huge taxes provide services that have the lowest levels of quality in the country. To make matters worse, it turns out that of the 30mm CA citizens, the state depends on 140k affluent people to pay 50% of the tax burden.
The bottom line is that the state is so inefficient at spending its tax dollars, and its politicians and bureaucrats so unaccountable for their corrupt spending practices that I believe spending cuts are the only way to restructure our insolvent state. Below is all the juicy data in the email I sent to the email list (7/12/09):
CA taxes its citizens more than virtually all other states, and then provides services at quality levels ranked at or near the bottom compared to all other states. The facts show that CA citizens are getting a *very* bad deal economically speaking. None of the stats I provide below are surprising to most folks except as to how they illustrate how extraordinarily bad the state is run compared to other states in the U.S.
Tax stats on a per capita basis (unless otherwise noted):
- CA’s state/local tax burden ranks 6th highest in the nation
- CA business tax environment ranks 48th lowest nationally
- CA top individual tax rate ranks #1
- CA corporate income tax highest in west, #9 in the U.S.
- CA property tax collections are in the middle of the pack, 19th highest nationally (avg. $$ per household, 28th on per capita basis)
- CA sales tax rate of 8.25% (2006) is highest in the country
Summary: CA citizens carry some of the highest tax burdens in the U.S. on almost every tax category you can come up with. Even on the property tax issue, CA ranks middle of the pack at #19.
Now let’s look at the quality of services:
- Quality of Healthcare: CA ranks 50th in quality of healthcare provided (and 39th overall if you include factors other than quality)
- Quality of Education: CA ranks 42nd in reading and math scores by 4th and 8th grade students
- Violent Crime per capita: CA ranks 14th highest in violent crime rates
Healthcare stats from:
Education stats from:
Crime stats from: