Overtaxing The Middle Class

For Over Six Years, California Has Had A Top Marginal Income-Tax Rate Of 13.3 Percent, The Highest In The Nation. About 150,000 Households In A State Of 40 Million People Now Pay Nearly Half Of The Total Annual State Income Tax.


The state legislature sold that confiscatory tax rate on the idea that it was a temporary fix and would eventually be phased out. No one believed that. California voters, about 40 percent of whom pay no state income taxes, naturally approved the extension of the high rate by an overwhelming margin.

California recently raised gas taxes by 40 percent and now has the second-highest gas taxes in the United States.

California has the ninth-highest combined state and local sales taxes in the country, but its state sales tax of 7.3 percent is America’s highest. As of April 1, California is now applying that high state sales tax to goods that residents buy online from out-of-state sellers.

In late 2017, the federal government capped state and local tax deductions at $10,000. For high earners in California, the change effectively almost doubled their state and local taxes.

Such high taxes, often targeting a small percentage of the population, may have brought California a budget surplus of more than $20 million. Yet California is never satiated with high new tax rates that bring in additional revenue. It’s always hungry for more.

Scott Wiener, a Democratic state senator from San Francisco, has introduced a bill that would create a new California estate tax. Wiener outlined a death tax of 40 percent on estates worth more than $3.5 million for single Californians or more than $7 million for married couples.

Given the soaring valuations of California properties, a new estate tax could force children to sell homes or family farms they inherited just to pay the tax bills.

Soon, even more of the Californian taxpayers who chip in to pay half of the state income taxes will flee in droves for low-tax or no-tax states.

What really irks California taxpayers are the shoddy public services that they receive in exchange for such burdensome taxes. California can be found near the bottom of state rankings for schools and infrastructure.

San Francisco ranks first among America’s largest cities in property crimes per capita. The massive concrete ruins of the state’s quarter-built and now either canceled or postponed multibillion-dollar high-speed-rail system are already collecting graffiti.

Roughly a quarter of the nation’s homeless live in California. So do about one-third of all Americans on public assistance. Approximately one-fifth of the state’s population lives below the poverty line. About one-third of Californians are enrolled in Medi-Cal, the state’s health-care program for low-income residents.

California’s social programs are magnets that draw in the indigent from all over the world, who arrive in search of generous health, education, legal, nutritional, and housing subsidies. Some 27 percent of the state’s residents were not born in the United States.

Last month alone, nearly 100,000 foreign nationals were stopped at the southern border, according to officials. Huge numbers of migrants are able to make it across without being caught, and many end up in California.

A lot of upper-middle-class taxpayers feel not only that California fails to appreciate their contributions, but that the state often blames them for not paying even more — as if paying about half of their incomes to local, state, and federal governments somehow reveals their greed.

The hyper-wealthy liberal denizens of Hollywood, Silicon Valley, and the coastal enclaves often seem exempt from the consequences of the high taxes they so often advocate for others. The super-rich either have the clout to hire experts to help them avoid such taxes, or they simply have so much money that they are not much affected by even California’s high taxes.

What is the ideology behind such destructive state policies?

Venezuela, which is driving out its middle class, is apparently California’s model. Venezuelan leaders believed in providing vast subsidies for the poor. The country’s super-rich are often crony capitalists who can avoid high taxes.

Similarly, California is waging an outright war on the upper middle class, which lacks the numbers of the poor and the clout of the rich.  https://www.nationalreview.com/2019/04/california-high-state-taxes-obsessive-collectors/

Cost of Living

It’s no secret:  The median price for a home in California is more than $540,000. The median rent is nearly $3,000. That’s about twice the national average of $218,000 and $1,695, respectively.

And in some of the state’s most popular cities, like San Francisco, home and rent prices increase dramatically: It can cost more than $1.3 million to buy and $4,500 to rent.

Still, though they must contend with some of the most expensive real-estate prices in the country, Californians say their top financial stressor isn’t housing. It’s the cost of living overall.

Financial site GOBankingRates conducted a study of more than 2,000 people from every state and Washington, D.C., “to pinpoint what’s causing the worst financial fears and stress among Americans.” Respondents could choose one of the following options: “debt,” “education,” including things like college expenses, “everyday costs,” including groceries and utilities, “family,” including child care and divorce, “health care,” “housing,” or “taxes.”

Californians chose everyday costs.

“California is one of the states with the highest cost of living,” according to the study, “so it makes sense that 26 percent of those who live there said everyday costs of living are their biggest financial stress.”  https://www.cnbc.com/2018/08/23/the-top-source-of-financial-stress-in-california-isnt-pricey-housing.html

Cost of Living in Texas vs. California: An Overview

Texas and California are two of the largest states in the union, both in terms of population and geography. The cost of living can vary significantly between individual counties or cities within either state. That said, the average Californian faces higher costs of living than the average Texan.

When economists or statisticians are measuring the cost of living for a given country or region, they are measuring the amount that consumers need to spend in order to reach a certain average standard lifestyle. Put another way, the cost of living measures how much food, shelter, clothing, health care, education, and fuel can be bought with one unit of currency.

The Massachusetts Institute of Technology tracks living wage calculations for cities and states across the United States, defining a living wage as the “approximate income needed to meet a family’s basic needs.” MIT further defines basic needs as “food, clothing, housing, and medical care.” According to its 2019 figures, an individual has to have 27.2% more income to earn a living wage in California than in Texas.

Cost of Living in California

MIT compares the costs of six different typical expenses for each state: food, child care, medical, housing, transportation, and “other.”

In all areas, California was more expensive than Texas. The average single adult could expect to eat with $3,573 a year in California versus $2,994 in Texas.

Raising one child for a year costs more than $32,000 in California, compared to about $25,000 in Texas.

On average, Texas also has less expensive medical care than California.

Housing is the largest single expense category in MIT’s calculation; it is also the area where Texans saw the largest advantage. Housing costs are an impressive 59.1% higher in the Golden State than in the Lone Star State. The difference was more pronounced for bigger families.

Lumping expenses such as entertainment, dining out, pet care, and other possible expenses together, the “other” category is another win for Texas; its average residents spend 5.4% less here.

Cost of Living in Texas:

Cost-of-living averages do not address the quality of the goods or services available. It could very well be that shoes cost 25% more in one state than in another, yet they last 50% longer. Perhaps food prices are the same between two states, but on average the food in one state tastes better and is healthier to consume. Nevertheless, the data does suggest that it is relatively less expensive to live in Texas than in California.

In fact, the Lone Star State is home to the top two most-affordable burgs in America: Harlingen and McAllen, according to Kiplinger’s “Cheapest U.S. Cities to Live In 2019” survey.1 Several other Texan towns, including Wichita Falls, Sherman, Amarillo, Temple, and Texarkana, make the 25-city list too. In fact, Texas is the best-represented state in the survey.

The winner, Harlingen, with its population of 65,467, had a median household income of $38,122 and a median home value of $85,700, according to the list. McAllen, which ranked number two, is a bigger, wealthier town (population 142,696; median household income $45,057; median home value $120,500).1

Both are located in southern Texas, where not only living is affordable, but the food is as well. A recent study done by Kiplinger revealed that of a few hundred grocery stores that were analyzed by affordability and pricing, only a handful had cheaper goods than the stores in Harlingen.

Both towns are also close to Mexico and, while located in a hot, dry state, both are within an hour’s drive of the beach. McAllen hosts a 15-acre birding habitat, too.  https://www.investopedia.com/ask/answers/100214/what-cost-living-difference-between-texas-and-california.asp

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