Response to “Reduce spending and don’t tax the rich!”

I have talked with many people who have concerns about state spending and taxing the rich. This blog is a response to them, and a reply to a comment Vibora Volando posted to my Open Letter to Governor Jerry Brown (click here to see the initial blog and comments).

VIBORA VOLANDO: When will you sympathizers get it through your heads. We have a spending problem, not a revenue problem. Democratic legislators have taken us down the road to perdition because they don’t know how to balance a checkbook, or insist on a $100bln railroad to nowhere, when there isn’t a dollar on hand we haven’t borrowed. It is sickening. We have been promised too much “heroin” in the form of government welfare and finally someone is at least bringing it to the press. California’s education system is fiscally unsustainable due to waste, giveaways, bloated salaries and pensions. Yet the lazy solution is to raise more money to throw at the problem rather than find real long term solutions. And this thing about the rich paying their fair share. LOL. Take away the rich and Cali goes down the tubes. Then those nice new “temporary” taxes will be re-calibrated to slip down to ever lower income brackets until things blow up. It is laughable that people are all energized about taking more money from the wealthy when they contribute virtually nothing in comparison. Extortion cloaked in the faux fur of democracy.


First, I agree that a high-speed rail system is not what we need right now. That’s like frosting on the cake, when we don’t have the cake, and not even the main dish. We need good transportation systems like regional public transit that is frequent and affordable; that’s what encourages people to use it. We also need roads with potholes filled and parking available; that helps neighborhood businesses.

I also agree that we should not be borrowing, and throwing money away in interest. The state pays out about 5% interest while it has billions of dollars sitting in Wall Street banks earning less than 1% interest. That does not make sense. North Dakota is the only state without a budget deficit since the global meltdown, and it is also the only state with a State Bank. See  I think you’ll like the idea.

As to the disparity of wealth, it’s a question of scale. It has gone too far. What was called rich used to be seven times richer than the rest of us; now it’s 300 times or 1000 times. California’s 94 billionaires could solve the budget gap without affecting their or their children’s quality of life. To build up wealth of one billion dollars, you would have to earn $1,000,000 a year for 1,000 years. Or if you only worked 50 years full-time, you would have to earn $10,000 an hour and tighten your belt – only spend $800,000 a year during those fifty years. That’s a billion dollars. Who needs it? Who is worth $10,000 an hour at age 21 if someone else is worth $8?

All this, all the money they’ve accumulated, would not be a problem if it didn’t bring with it the closing down of schools, libraries, parks and so many things that have now given our next generation fewer educational and economic opportunities than the prior generation. And their elders are suffering too.

For decades we have been reducing taxes on the rich, and if it actually did create jobs and help the whole state, we would not have the unemployment rates we have.

This is real: we are now in the situation where the lower income families pay a higher percentage of their income in state and local taxes than the richest 1%. It has to do with taxes other than income tax; taxes like sales tax, property taxes, and fees fall harder on lower incomes.  My guess is that you and your family and friends, like the vast majority of Californians, are on the wrong side of that balance of tax fairness; my guess is that you pay at a higher rate than the richest of the rich.

The super-rich used to be taxed more and could still get wealthy. They actually get a lot of financial benefit from the government. Corporations for example, in addition to having departments that ensure they pay as little tax as possible (their spending side), have departments dedicated to getting government contracts and subsidies, not to mention the Wall Street bailouts (their revenue side). And as to helping the state, scandals like those of Enron and the savings and loans cost our state billions. And then, in an amazing example of weapons of mass distraction, immigration gets blamed for economic problems.

If the super-rich move away from this wonderful state, then I’m sorry for them because California is truly special.

We won’t stop fighting to balance the budget and reduce the disparity of wealth. We want to increase the chances for the rest of us to have good jobs and good lives.

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