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California has itself to blame. Real Estate bubbles, as once again was conclusively seen in Japan, cause economic destruction; but they went with proposition 13 anyway and fueled it. We ignored the Japanese warning that is just another one in a long history of land bloat.
The richest state in the union bankrupted itself by making a landed gentry who do nothing but sell good weather and beaches.
So then taxes are shifted to production.
ies and counties, unable to raise property taxes, realized that one way to get more revenue was to encourage businesses that generate sales taxes, such as auto dealerships and strip malls. California’s statewide sales-tax rate, which was lowered to 7.25 percent from 8.25 percent this month, is still the highest in the U.S. Local governments are allowed to add as much as another 1.5 percent.
Rising land values does not reward production. Its pre-revolutionary France, the US in the 1870s, Rome before the dark ages, 2008 in the US and in European PIGGS. Its soon to be in the UK, Australia and Canada.
Since they tax production they erode the very thing that adds value to land in the first place, thus the land valuations will simply move in the direction that reflects their worth until the land tax is appropriate only in this case by land lowering in value.
All lowering taxes does is raise land values. The land is then purchased on credit because few can buy it with equity. This converts the wealth of the land into an interest payment effectively siphoning off the wealth from California. Rising land values end up in the hands of the mortgage industry.
Few have heard of him, but everyone knows the game he inspired, Monopoly.
Thus California has indeed returned to its heritage following the Mexico economic plan of landed estates, and narco-anarchy.
Well done idiots in California with prop 13. You destroyed yourselves.
And no Krugman, lowing wages does jack squat. Lowering asset prices like land does wonders. Land lords don't make anything. Taxing them discourages nothing.
First... I was not old enough to have voted for Prop 13 back in the 1970's... I am thankful each and everyday for those that put politics aside and made Prop 13 the law by a landslide... Right, Left, the Middle, Property Owners, Tenants and those Hoping to be Property Owners came together in true bi-partisan fashion and got it passed into law
Second... I bought a 1956, 1721 square foot ranch home in East Oakland and my taxes are not cheap!!! My tax rate is now close to 1.6% of assessed value which is over market value... $9,000 a year in property tax is $750 a month.
Third... Property 13 is easy to understand, written simply and DOES NOT EVEN APPLY TO SCHOOL INFRASTRUCTURE... too bad, because some of the palaces being built would not be possible if under Prop 13 rules.
Neighboring States have either no State Income Tax or State Sales Tax... California has both plus Property Tax.
Fourth... Prop 13 is in large part due the State's Grab of the Public Schools under the Serrano Decisions taking local control and tax dollars out of the hands of local districts.
Fifth... Anyone paying property taxes in the 70's knows first hand that opening the tax bill was like Russian roulette... taxes were increasing at double digit rates and driving people from their homes.
Sixth... Several Tax Assessors went to jail, some committed suicide for sweetheart deals for those of influence... the taxable value of property was solely left to the Assessor's opinion of value and not tied to actual purchase price.
Seventh... Tax Revenues had nearly 30 straight years of annual increases...
Eighth... My District spends nearly $16,000 per student and has some of the lowest performing schools in the State... more money is not the answer.
Ninth... The U. S. Supreme Court has upheld the constitutionality of Prop 13
Tenth... California contributes dollars to the treasury than it receives... are you sure Washington could sustain the loss of California?
Last edited by Ultrarunner; 12-31-2011 at 02:56 PM..
"Michigan owes the federal government roughly $3.96 billion. Michigan must pay $117 million to the federal government by September 30. That is one payment on the interest alone for the $3.9 billion in loans. Michigan's debt is the second largest among the nation. California is first on the list owing $10.5 billion."
So what happens if these states don't make their loan payments? Does somebody from the federal government go in and figuratively break their legs? Does the federal government take over the states and then put them up for sale on the free market? Maybe China would like to own California so they could drill off its coast and hire non-union Americans and Illegal Mexicans to do the work? Don't know who would want Michigan...maybe Canada so their people have easier access to good doctors when Canadacare makes them wait months for surgery. If they don't pay their debts to the federal government should the feds take them over and "nationalize" them? Why would taxpayers in other states want to pay for their reckless spending?
Why does the federal government still lend these states money? What's their credit limit, anyway? Why do I keep seeing ads on TV in primetime to visit California? Those ads must cost a bundle. How can they afford them when they have no money? Why do federal laws keep getting passed with unfunded state mandates? Are these states reducing their spending? Maybe the governors should all run to Cuba like the Wisconsin Democrats did to Illinois to get away from their obligations.
You can't even write a correct thread title in your native language, so be quiet
Regardless of debt, California will remain the most important of all states. The US would be stupid to get rid of its crown jewels.
Selling states, ts, you people would sell your own parents if you got enough for them
Kind of funny to read the bashing by people from the swamplands of Florida and desert wasteland of Texas of beautiful states such as California and Michigan. There's nothing great in Florida which can't be found in the Caribbean, and when the wells run dry in Texas, its economy will bottom out worse than Michigan's.
You could probably get around $1.75 for Michigan, and maybe $3.35 for California because it has ocean front.
Laugh all you want but California is responsible for 13% of U.S. GDP and the 7th largest economy in the world. It is also responsible for 16% of all agricultural products sold in the U.S. As for Michigan; the state tops Saudi Arabia in GDP and about even with Georgia.
Sell both for $4.10 and guess who would be the fool?
I don't know why a thread this old was resurrected after 8 months in a forum where the news changes weekly but it's so old I have vacation plans to visit Michigan in 2012 and I'm the OP.
"Michigan owes the federal government roughly $3.96 billion. Michigan must pay $117 million to the federal government by September 30. That is one payment on the interest alone for the $3.9 billion in loans. Michigan's debt is the second largest among the nation. California is first on the list owing $10.5 billion."
So what happens if these states don't make their loan payments? Does somebody from the federal government go in and figuratively break their legs? Does the federal government take over the states and then put them up for sale on the free market? Maybe China would like to own California so they could drill off its coast and hire non-union Americans and Illegal Mexicans to do the work? Don't know who would want Michigan...maybe Canada so their people have easier access to good doctors when Canadacare makes them wait months for surgery. If they don't pay their debts to the federal government should the feds take them over and "nationalize" them? Why would taxpayers in other states want to pay for their reckless spending?
Why does the federal government still lend these states money? What's their credit limit, anyway? Why do I keep seeing ads on TV in primetime to visit California? Those ads must cost a bundle. How can they afford them when they have no money? Why do federal laws keep getting passed with unfunded state mandates? Are these states reducing their spending? Maybe the governors should all run to Cuba like the Wisconsin Democrats did to Illinois to get away from their obligations.
Without California, USA is NOTHING. The rest of the country lives off of everything we create and innovate here. In fact my hope is that we break off and form our own country along with other like minded states in the west. That way we will be rid of the inbred southerners and other retarded flyover country residents.
Conservatives love the USA so much they are willing to sell pieces off. Pathetic.
It's kind of like amputating a gangrenous toe. Sometimes you have to do what you have to do.
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