Thread: Will America Follow California's Example?

Will America follow California's example?

By FRANK J. DONATELLI | 6/12/09 4:45 AM EDT

Home health care workers and their supporters march past the Capitol to protest proposed state budget cuts to in-home health care services in Sacramento, California. Photo: AP

If you want to see what President Barack Obama’s America will look like, look no further than California right now. Out-of-control spending, deficits as far as the eye can see and unsustainable promises to key interest groups have all combined to bring the Golden State to the brink of economic collapse. The governor and the state Legislature are struggling to close a budget deficit that has reached $42 billion.

The similarities between what Obama wants to do nationally and what California has already done should give Congress pause before it gives the president a blank check to remake our economy.

Let’s first dispose of the last-gasp liberal charge that the state suffers because taxes aren’t high enough as a result of the Proposition 13 revolution 30 years ago. In point of fact, California’s spending has been out of control for at least two decades. As the libertarian CATO Institute has pointed out, since the 2005 fiscal year, state spending has grown twice as fast as the population and inflation. No amount of additional taxes could have sustained this spending pace. California’s sales and income tax rates are already among the highest in the country, which explains the migration of high-income earners and taxpayers out of the state. Higher taxes for the remaining taxpayers would just make the situation worse.

Obama also wants to make America’s tax system more progressive. Remember that 5 percent of taxpayers in America already pay more than half of all income taxes. History tells us that higher rates will not produce anywhere near the revenue projected by the administration — certainly not remotely enough to pay for Obama’s new massive spending schemes. Indeed, Obama has also promised a “middle-class tax cutâ€

Now add the Fair Tax and who will care if any American Citizen has a JOB. Illegals will have jobs and they will not mind paying the federal sales tax.