Liberally Conservative

"Freedom is never more than one generation away from extinction. We didn't pass it to our children in the bloodstream. It must be fought for, protected, and handed on for them to do the same, or one day we will spend our sunset years telling our children and our children's children what it was once like in the United States where men were free....... ~Ronald Reagan~

Tuesday, February 28, 2006

All In The Family....California Style

Rob Reiner, also known as "Meathead" in the TV sitcom "All In The Family" is now playing Robin Hood with taxpayer money in California. Joining him are many of his Hollywood pals. Reiner's character was a left-wing nut, anti-war, anti-capitalist buffoon as Archie Bunker's son-in-law. Unfortunately for California small business Reiner has extended his character into real life scenarios with the "Reiner Initiative."
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Reiner is clueless when it comes to understanding economics. He feels raising taxes will help with pre-school funding but fails to see a reduction in small business re-investment dollars will hurt employment and reduce economic growth. Running a small business requires wearing many hats to succeed but Reiner sees the world through rose colored glasses and a water pipe.
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According to CalTax, "The natural growth in California personal income tax revenue that is produced when the California economy grows is substantially greater than any politically viable tax increase that could be enacted. California personal income tax revenue can increase dramatically when public policy changes encourage increased California investment and job growth, particularly job growth in industries with high wage levels."
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Small business is leaving California for the following reasons.
  • The 1991 California personal income tax rate increase was projected to produce more than $2 billion in additional revenue from this source. The revenue did not materialize. Revenue from the personal income tax was virtually flat until the temporary tax increase expired. Then revenue from the personal income tax grew 80% in six years.
  • A study by the National Bureau of Economic Research, analyzing 1993 federal tax increases on upper-income taxpayers, found a similar result. Two new brackets for those with incomes over $140,000 produced less than half the revenue anticipated in the static analysis.
  • The Reiner Initiative, like Proposition 63 of 2004 (the tax on millionaires to fund mental health) is an unfriendly gesture to high-income Californians. Voters are being asked to target someone else to pay for social programs.
  • Small businesses are the backbone of the California economy. Yet increasing top income tax rates would raise income tax liabilities for some small, profitable unincorporated businesses paying personal income taxes.

California continues to account for about one-sixth of the overall U.S. economy, and its competitive decline will inevitably hurt everyone. Hollywood's liberals will discover again that a state with fewer businesses creates fewer jobs and collects fewer taxes.

Also keep in mind, the Hollywood Left unequivocally supports Hillary Clinton. Combine the two and we have an epic economic disaster in the making.

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