Yup, thats California’s deficit. The new Governor repealed the car tax which had brought $4b for the cities and counties. Now they need to plug that too. There are two logical answers.
Increase revenues
Decrease spendings
Being a republican, the Governor won’t really be thrilled about any new taxes (against big government and all). With most spending going for education and healthcare, there are very few avenues left for cutting costs. Almost all of them unpopular. What to do?
Borrow.
$15b to be exact (bonds), to be paid over 30 years. In other words we will be spending our grand-kids’ money. Quite appealing, I must say. Do we really like our grand kids all that much? Let them take the burden.
okay serious question..are these giants like oracle, peoplesoft siebel etc which are in the bay area..paying corp taxes in CA or are they in the cayman islands.
If you go by brand names, then almost all the hot shots of high-tech are in California. They all pay a boat load of taxes - not just on income, but sales, property etc. Their high priced executives pay high taxes too. But the problem is out of control spending. Just the budget deficit of California is probably bigger than budgets of many states. If I am not wrong, the state's budget is $93b or something like that.
The state has a huge illegal immigrant problem, who use education and health care, and no one wants to appear insensitive by suggesting why are tax payers paying for these benefits for illegals. Judging by how the politicians want to fix the budget problem, it seems my grandchildren just paid for Sandiago's flu shots today.
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*Originally posted by Faisal: *
The state has a huge illegal immigrant problem, who use education and health care, and no one wants to appear homophobic by suggesting why are tax payers paying for these benefits for illegals.
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so the issue is only with homosexual illegal immigrants then? why single them out?
Not that its ever going to happen, but why not cut down on those INS raids and let illegal aliens earn money on the books. There's a lot of revenue there that never hits the books.
Plus as Fraud-meister said, legalize drugs. Considering all the high-tech (silicon valley) junkies and the whole entertainment industry (Hollywood) there, I'm sure they'll make a killing.
^Exactly, with the huge illegal revenue thats never taxed, it could make a significant difference. Its not like the aliens arent already using the services of the state and so far the INS has been pretty ineffective with preventing the flow. Perhaps they could bring these people under the NAFTA treaty and get them taxed for the money they get.
Ok, from an outsiders perspective and a theoretical standpoint, the idea should be to increase the tax collections (muahahaha! the supply-side economists) by:
a) increasing the tax net (higher number of tax payers)
b) revise the taxation slabs so that the higher the corporate, the larger the tax slab (hinting corporates to stay small :p)
If this can be coupled with measures to curb/rationale spending, i believe over a period of 10 years or so, we should be home.
Having state bonds is not a bad idea anyways, Faisal, knowing the philanthropist that you are, i hope you are not thinking that if you don't opt for state bonds now, there won't be any state bonds in yer grandchildren's time, eh? :p Knowing the things as they are, be assured they may be living off their grandchildren's money and so on.
To my mind, the state can either borrow from the centre or raise its own money. Either ways, it does not really make a difference, since states almost always have balances with the centre so to my mind, raising bonds sounds fine.
