The Wall Street Journal on its WSJ Opinion Journal website has taken up the focus (after articles in the L. A. Times and the L. A. Weekly) and it lends credibility to the credo – not all Hollywood actors can be Ronald Reagan. At this moment, not even Arnold will be able to escape the light.
Excerpts from: Meathead Economics - Hollywood liberals drive productive
Californians to leave the state. (WSJ Opinion Journal)
But the worst growth killer may well be California's tax system. The business tax rate of 8.8% is the highest in the West, and its steeply "progressive" personal income tax has an effective top marginal rate of 10.3%, or second highest in the nation. CalTax, the state's taxpayer advocacy group, reports that the richest 10% of earners pay almost 75% of the entire income-tax revenue in the state, and most of these are small0business owners, i.e., the people who create jobs.
And things may soon get worse, thanks to Rob Reiner, who played the liberal "Meathead" on the "All in the Family" sitcom in the 1970s and now plays the same part in real life. He and his rich Hollywood friends have put an initiative on the state's June ballot that would add a 1.7-percentage-point income-tax surcharge on "millionaires" with income over $400,000, with the proceeds earmarked for universal pre-school.
All of this has contributed to the trend of wealthy taxpayers disappearing from the state. State finance office data indicate that the number of Californians reporting million-dollar incomes fell to 25,000 in 2003 from 44,000 in 2000. That decline has cost the state $9 billion a year in uncollected tax revenues. The dot-com implosion of 2000 and 2001 no doubt wiped out many paper millionaires, but migration out of the state to escape its hefty tax premium has also played a role. Republican Assemblyman Ray Haynes notes that the average high-income individual can buy a newly built house in neighboring Nevada and pay for it just from the money saved in a year of not paying California taxes.
By the way, Mr. Reiner serves on the board of the Children and Families Commission, which oversees the expenditures of the tobacco trust fund. That Commission approved spending $23 million of tobacco taxes to finance TV ads that promote his own new tax-and-spend-on-pre-school scheme. This use of taxpayer dollars to lobby for more taxpayer dollars may violate state law preventing taxes from being used to finance campaign activities. And the Los Angeles Times reports that some $200 million of the children's education fund has found its way into the bank accounts of public relations and advertising firms, some of which are run by friends of Mr. Reiner.
The lesson: Beware liberals promising to tax someone else in the name of helping "children." They'll end up taxing you, while they and their friends benefit.