California in the Hole
2009 June 22
If I didn’t mention it before, I’ll mention it now. I live in California. And California is broke. Right now we have a $24 billion deficit for the coming fiscal year. In total, all states face a $121 billion budget gap, a bit sobering isn’t it? So much for green shoots.
So far our Governator has proposed:
- Releasing thousands of prisoners early (hopefully these are white collar criminals)
- Closing more than 200 state parks (I’m ok with this)
- Increase income/sales/vehicle taxes (no no no, ours is already one of the highest in the country!)
The one cut I would propose:
- Stop providing free education, health care, food stamps, and subsidized housing to illegal aliens – No more welfare state, estimates put the cost as high as $30 billion a year. That should eliminate the deficit problem.
California has always been a vanguard of this country. Are we too big to fail? I think not. But this does not bode well for the rest of the country.
But seriously, what is the Federal Government thinking? Giving $160 billion to AIG and $375 billion to banks but letting all the fifty states fail. What good is the Federal Government with bankrupt states?
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I liked your blog until I read about the stuff about immigrants. You might not realize it, but most immigrants be they legal or illegal DO PAY taxes, as it is impossible to work in this country without a social security card. The one positive is that they are not going to take advantage of social security or medicare since they are not US citizens.
You see it is the stupidity and narrow mindedness of the US government that treats immigrants as criminals, while not understanding that they (immigrants that is) are the main reason why the US has become such a great country over the past 236 years.
Oh and chances are if your great grandparents that came into this country were subject to the same immigration laws that we have today, they would have gotten deported some time down the road. So please take it easy on immigrants be it “legal” or “illegal”. Remember in Nazi Germany it was “illegal” to be a Jew.. Which doesn’t mean that this “illegality” was right.. Think with your head and do not believe too much on what you read.
Best Regards,
Dividend Growth Investor
I can’t believe you can compare our current situation of illegal aliens in California to Jewish people’s experiences during Nazi Germany. Never mind the fact that Nazi Germany was responsible for the deaths of tens of millions of Jewish people and had concentration camps and performed experiments on living human beings.
In California an illegal alien can:
- file an income tax return where he can get an “earned income credit” of up to $3,200
- get free education
- get free healthcare
- get free public services
- qualify for food stamps
- qualify for Section 8 housing and subsidized rent
- get SSI and Medicare coverage
What I’m saying is to stop those free programs that are getting paid by tax-paying citizens. California is already going bankrupt with a $24 billion deficit for the coming year, we can’t afford to be a welfare state anymore.
I just used the Nazi example with California in order to make my point that just because things that are “illegal”, doesn’t mean that the law is right. Did you know that the Governator also stayed out of status in the 1970s?
Actually if California gave permanent residence to all of those illegal aliens if they purchased a house in areas with high foreclosure rates, then maybe it could fix two problems easily.
As an accountant, I have learned ( in tax courses) that everyone should pay taxes, even if they engage in illegal activities, or are illegal immigrants. Now this cannot be used against you as per the 5th ammendment. Remember Al Capone, and why he was sentenced to prison?
But immigrants, be they legal or illegal MUST file tax returns. Of course if the goal of the US govt wasn’t to gather all illegals in trucks and send them accross the border but legalize them ( they are already here, and once they are sent back home they usually come back to the US only to be taken back to mexico , see a pattern here) then California could get more tax revenues. ( assuming that most immigrants don’t pay taxes).
One other thing is that everything you do is taxed. Even buying a computer or a can of Coca Cola is subject to sales taxes ( consumption taxes). So just because someone doesn’t pay income taxes, doesn’t mean the government/ state or federal/ doesn’t generate tax revenues from them.
Anyway, I appreciate you not deleting my comment. Most blog admins would not keep a blog post opposing their opinion even for a second ;-)
I’ve read about different viewpoints regarding the Fair Tax (I’m guessing that’s what you were referring to in your 2nd to last paragraph) and that does seem like a good idea. That would encourage more savings and investment. In addition, it would make it so everybody that buys goods would need to pay taxes – thus help California get back on solid footing.
I don’t want California to gather all illegal aliens and send them back, like you said, they’re here already. But I do worry about where we will get the money to support them. The Fair Tax above might be a viable solution. Or just legalize them to generate tax revenue. But the limbo state that they are in right now (and it’s not like state authorities don’t know they are here) just doesn’t make any economic sense for California in the long run.
I’ve also heard that the VAT (value-added tax) idea is getting punted around to close the gap on our federal deficits. My main concern for that is how much more expensive daily items will become.
And I generally won’t delete comments unless they’re obviously spamming a product or personally attacking somebody. It’s good to get to hear different points of views.