Breaking Bad: California vs. the Other States

From iGeek
Jump to: navigation, search
CA-BB.svg.png
by Richard Rider (Email: RRider92131@GMail.com) – Chairman, San Diego Tax Fighters
Here’s a depressing but documented comparison of California's taxes, economic and business climate.

Overall Taxes

  • The Tax Foundation “Tax Freedom Day” study ranks CA as the 12th worst taxed state in 2019, not counting newly enacted state and local taxes. However, the load is not fairly distributed, CA state income taxes are the most progressive of all states, hammering success and hard work. The top 1% carry over half the load (50%+) by themselves.[1] Since the top have more discretionary income, this means that whenever there's a hint of recession, California's state revenues crash (as the top 1% leave or save), and we run huge deficits, while in good times, the state still overspends.

Income Tax

  • CA now has by far the nation’s highest state income tax rate. - Prior to Prop 30 passing in Nov. 2012, CA already had the 3rd worst state income tax rate in the nation. Our 9.3% tax bracket started at under $50,000 for people filing as individuals. 10.3% started at $1 million. Now our “millionaires’ tax” rate is 13.3% – including capital gains (CA total CG rate now the 2nd highest in the world!). 10+% taxes now start at $250K.
  • We are 34% higher than 2nd place Oregon, and a heck of a lot higher than all the rest – including 7 states with zero state income tax – and two states (NH and TN) that tax only dividends and interest income (not capital gains). NOTE: TN tax totally phases out by 2022.
  • CA is so bad, we also have the nation's 2nd highest state income tax bracket, AND the 3rd... all the way to the 8th![2]

Sales Tax

  • CA has the highest state sales tax rate in the nation. 7.25% (does not include local sales taxes).
  • 9th highest state with the average local sales tax included (8.56% on 1 January, 2019 – up from 8.25% in 2017). [3]

Business Environment

  • CA corporate income tax rate is the highest west of Iowa except for Alaska (our economic competitors).
  • Overall CA has the 7th highest corporate tax rate in nation. And it's 8.84% from the first dollar of profit made. [4] Remember, taxes are cumulative, so being only 7th worse, is much worse when added to the other taxes, fees and regulations.
  • The top CEO’s surveyed rank CA “the worst state in which to do business” for the 14th straight year. [5]
  • California has an anti-small business $800 minimum corporate income tax, even if no profit is earned, and even for many nonprofits. Next highest state is Rhode Island at $500 (only for “C” corporations). 3rd is Delaware at $175. Most states are at zero. [6]
  • California’s 2019 “business tax climate” ranks 2nd worst in the nation – behind anchor-clanker New Jersey – a decline from 3rd worst last year.[7]
  • CA has a lock on the worst rank in the 2017 Small Business Tax Index – 8% worse than the 2nd worst business state (New Jersey).[8]
  • From 2007 through 2010, CA got 1.6% (176) of the 10,763 new manufacturing facilities built or expanded across the country. Adjusted for population, the other 49 states averaged 8.4 times more manufacturing growth than did California. [9] This is much worse when you add in how many businesses fled the state or shut down.



Utilities and Fuel

  • CA has the nation’s 2nd highest “gas pump” tax at 72.76 cents/gallon (March, 2019).
  • However, when you add in the unique 10-12 cent CA “cap and trade” tax per gallon, and CA's 82.76-84.76 cents/gallon is the worst in the nation – 6 to 8 cents more than PA. National average is 52.18 cents.
  • CA easily has the nation's highest total diesel tax
  • Yet CA has the 9th worst highways (41 states are better), despite some of the most moderate climate, and federal support for highways. (Fact Check that) [10]
  • CA has now instituted highest “cap and trade” tax in the nation – indeed, the ONLY such U.S. tax. Even proponents concede that it will have zero impact on global warming. The tax especially increases the cost of electricity, gasoline and manufacturing. [11]
  • We have a 4-plex in Reno, and a home in San Jose, that use the same water supplier, the predictable results, our single unit in California costs 2-3x as much, for a small fraction the water as our 4-plex. A 2015 U-T survey of home water bills for the 30 largest U.S. cities found that for 200 gallons a day usage, San Diego has the 3rd highest costs. 73.7% higher than the median city surveyed, and it goes up with more usage. San Francisco, L.A., San Jose, have all gone up faster than national average, and are high on the list of most expensive. [12]

Property Taxes and Fees

  • California in 2015 ranked 14th highest in per capita property taxes (including commercial) – the only major tax where we are not in the worst ten states. But that's rate, not total burden. Since California has some of the most expensive homes, the 2014 average CA single-family residence (SFR) property tax is the 8th highest state in the nation. Indeed, the median CA homeowner property tax bill is 93% higher than the average for the other 49 states. [13]
  • Average 2012 CA impact fee for single-family residence was $31,100, 90% higher than next worst state. 265% higher than jurisdictions that levy such fees (many governments east of the Sierras do not).
  • For apartments, fee averaged $18,800, 290% above average outside state. The fee is part of the purchase price, so buyer pays an annual property tax on the fee!

Other Regulations/Taxes/Fees/Costs

  • The American Tort Reform Foundation in 2019 ranks CA the “worst state judicial hellhole” in U.S. – worse than 2018 “winner:” Florida. The U.S. Chamber of Commerce ranked CA a bit better – “only” the 4th worst state in 2017 (trending down from 7th worst in 2008).[14]
  • CA driving tickets are incredibly high. Red-light camera ticket $500. Next highest state is $250. Most are around $100. [15]
  • CA annual per state prisoner cost ($75,560) is easily the highest in the nation – over triple the avg. cost of the 18 states with the least-costly rates[16]
  • While I love Cops & Firemen, and the services they provide, the average CA Police Officers are paid 56% more than those in other 49 states and firefighter are paid 60% more For reference he CA 2016 median household income is 12.8% above national avg. So we're getting worse value, which means we can afford to hire fewer of them. [17]
  • While CA charges the most for Workers Comp floating between worst (2016) and 2nd worst (2018), 169% of median state rate, we have some of the lowest benefits/payouts.[18]
  • California has the 2nd lowest bond rating of any state. Woo hoo, California lost its lowest in the nation rating... to an even more corrupt and incompetent Illinois. We're the second worst financial shape. [19]

Unemployment

  • CA unemployment rate (February, 2019) is 4.2% (National unemployment rate is 3.8%), only 11 states are worse.The CA unemployment rate is 12.1% higher than the average of the other 49 states.[20]
  • Using the more accurate U-6 measure of unemployment (which includes involuntary part-time workers), CA is the 8th worst</small> – 8.8% vs. national 7.7%. CA’s U-6 is 16.6% higher than other states.</small>[21]

Education

  • CA public school teachers are the 2nd highest paid in the nation – avg $81,126 CA students rank 46th in math achievement, 42nd in reading.[22]
    • Because of the way the CTA and Unions setup the pay structure, starting teachers make below poverty wages, while retiring teachers/administrators are over $150-250K. Meaning teachers are both under-payed and disincentivized to get the best and brightest. While simultaneously being grossly overpaid if they've survived long enough. This is magnified by an absurdly high administrator or facilities to teacher ratios.
  • California Community College tuition and fees are the lowest in the nation.How low? Nationwide, the average community college tuition and fees are TRIPLE our California CC’s.[23]What does this result in? A 25+% drop rate for class completion.
  • Again the load is not fairly balanced in education, because of grants and tax credits, up to 2/3 of California CC students pay no net tuition at all! If you're poor or an illegal alien, you get a free ride on the taxpayers dime. If you or your parents are taxpayers, you have to carry the weight for the rest. Hard work is punished.[24]
  • Complaints about UC student fees ignore a key point -- all poor and many middle class CA students don't pay the UC “fees” (our state’s euphemism for tuition). There are no fees for most California families with under $80K income. 55% of all undergraduate CA UC students pay zero tuition, and another 14% pay only partial tuition. Moreover, CA's new “Middle Class Scholarship” program provides partial tuition aid for CA public college students of families with income from $80K to $150K. [25]

Poverty/Purchasing

  • Based just on GDP, CA, by far the most populous state, ranks as the 5th largest economy in the world. But adjusted for population and cost of living, CA prosperity ranks lower than all but 13 U.S. states. [26]
  • CA Cost of Living is 41.0% higher than the national average in the 1st qtr 2018, up from 36.3% higher a year earlier. CA COL is 54.4% higher than TX.[27]
  • The median CA home costs 2.4 times more than the national median home[28]
  • California’s real (“supplemental”) 2017 poverty rate (the new census bureau standard adjusted for the cost of living) means California has the most poverty in the nation. At 19.0%, we are 43.9% higher than the average for the other 49 states. Texas is 14.7%. CA poverty rate is 34.6% higher than Texas.[29]
  • With the help of California's sanctuary City/State laws, California has 12% of the nation’s population, but over 43% of the entire country’s TANF (“Temporary” Assistance for Needy Families) and SSP welfare recipients. That's 5.6 TIMES the percentage of welfare recipients in these categories found in the other 49 states! [30]
  • California ranks dead last (50th worst) for people's debt-to-income ratio.[31]
  • But at least we're "only",49th worst for percent of home ownership (That's 2nd to last for those who got a California education)[32]

Exodus

  • Consider California’s “net domestic migration” (migration between states). From 1992 through mid-2018, California lost a NET 4.2 million people to other states. In FY 2016-17, we lost 138,195. These are NET losses, if it wasn't for people moving in from even worse countries, or the North East States, the real outflux numbers would look much worse. California splits-up families. [33]
  • It’s likely not the welfare kings and queens departing. California drives out the people that lived here their whole lives, or the young/educated and productive that want to be able to start their life in an affordable place.
  • California easily has the lowest percentage of people over age 65.
  • California was recently ranked as the 3rd worst state to retire in by Kiplinger. Only NY and NJ are deemed worse.[34]
  • Texas is the #1 destination for Californians Why? The 2015 median Texas household income is 13.7% less than CA, but adjusted for COL, TX median household income is 32.0% more than CA. [35]

GeekPirate.small.png

📚 References
  1. Overall: https://taxfoundation.org/tax-freedom-day-2019
  2. Income tax:
  3. Sales Tax : https://taxfoundation.org/sales-tax-rates-2019/
  4. Corporate Tax : https://taxfoundation.org/state-corporate-rates-brackets-2019/
  5. CEO Survey: www.chiefexecutive.net/best-worst-states-business-2018/
  6. Minimum Corporate Tax (incorporate somewhere else): http://tinyurl.com/CA-800-tax
  7. Business Climate: https://taxfoundation.org/state-business-tax-climate-index-2019/
  8. Small Business Climate: http://sbecouncil.org/resources/publications/small-business-policy-index-2017/
  9. Business Growth: http://www.cmta.net/20110303mfgFacilities07to10.pdf -- prepared by California Manufacturers and Technology Association
  10. Fuel Tax:
  11. Cap and Trade: http://tinyurl.com/WSJ-CA-cap-and-trade
  12. Water Prices:
  13. Property Tax:
  14. Legal:
  15. Tickets: http://reason.org/blog/show/red-light-cameras-and-the-enigmatic
  16. Prisoner Costs:
  17. Cops & Firemen:
  18. Workers Comp: https://www.oregon.gov/dcbs/reports/Documents/general/prem-sum/18-2082.pdf
  19. Bond Rating: http://www.pewtrusts.org/en/research-and-analysis/blogs/stateline/2014/06/09/sp-ratings-2014
  20. Unemployment:
  21. U-6: http://www.bls.gov/lau/stalt.htm
  22. Education:
  23. CC Tuition: http://trends.collegeboard.org/college-pricing/figures-tables/tuition-and-fees-sector-and-state-over-time
  24. Education inequality: http://tinyurl.com/ygqz9ls
  25. UC Tuition:
  26. Poverty: http://riderrants.blogspot.com/2016/07/updated-2015-figures-ca-per-capita-gdp.html
  27. Cost of Living: https://www.missourieconomy.org/indicators/cost_of_living/
  28. Cost of Housing: http://tinyurl.com/MedianHomePrice
  29. Real Poverty rate: https://www2.census.gov/programs-surveys/demo/tables/p60/265/table5.xls
  30. TANF/SSP (page 20): https://www.acf.hhs.gov/ofa/resource/twelfth-report-to-congress
  31. Debt-to-income: http://tinyurl.com/CA-debt-to-income
  32. Home Ownership: http://tinyurl.com/2-unknown-CA-stats
  33. Exodus:
  34. Retirement Ranking: http://www.kiplinger.com/slideshow/retirement/T006-S001-worst-states-for-retirement-2016/index.html
  35. Texas:

Written 16 April, 2019 • Version 3.09