“Why would anybody in their right mind leave Dallas for Southern California? We’ve got the same weather without the liberals.” –Gigi Stopper, GCB
As you may recall, California voters in the last election enacted a plan to raise taxes on their most successful neighbors. Top earners in the Golden State now owe more than half of their income to the government, effective retroactively, and more than half of all revenue in Sacramento will be supplied by less than 1% of residents who make 20% of income. Unsurprisingly, many of the wealthy are fleeing as swiftly and shamelessly as Nicholas Sarkozy from Socialist France.
Many in the “fair share” crowd who espouse Ted Strickland’s “economic patriotism” are predictably, scathingly maudlin over the fact that people have the temerity to pursue more economical happiness. Liberals even got a cautious quasi-apology from their latest high-profile tax-flight target, Phil Mickelson, for stating the obvious—people want to keep their money. But as many are noting, Mickelson has not recanted his intention to consider leaving California. He merely expressed regret for trying to encourage “change”. Funny, that.
As Ed Morrissey noted over at Hot Air:
“Well, I don’t think Mickelson was looking for sympathy. I think he was explaining that he doesn’t have to put up with Jerry Brown’s tax hikes to fund a massively dysfunctional state government, and that he’s not likely to do so.”
Meanwhile in my native Florida, California-expatriate Tiger Woods enjoys tax-free income. Elsewhere, in predictable blue-red splits, several states have considered “millionaire taxes”, while lawmakers elsewhere have announced plans to abolish income and corporate taxes. There are certainly many problems with our convoluted tax codes in America. But whatever your thoughts on the matter, one thing remains clear: the problem remains spending. Just as California has done little to prevent future budget woes, the federal chasm between revenue and spending endures primarily because of entitlements.
In wake of all this, President Obama’s inaugural address barely mentioned the top issues concerning most Americans: jobs (fewer of those than at Obama’s first inaugural), debt (a lot more of that), and economy. Instead, he triumphantly heralded a resurgent era of the welfare state in which none of the debt-driving programs—entitlements—would face any serious reforms to keep them solvent. Thus, the administration is doubling down on what Walter Russel Mead dubs the blue social model, which Presidents Reagan and Bill “Era of Big Government is Over” Clinton had previously rebuked en route to tax reform and balanced budgets. This comes even as well-to-do citizens get far more from entitlement programs than they paid in the first place.
So this is the bed we lie in, America. Until we’re willing to make tough decisions to rein in entitlement spending, our expenditures will rise and our revenue will stagnate. In response, liberal administrations will push tax hikes, as they have from California to Maryland to 1600 Pennsylvania Avenue, and ever growing government will depend on an ever shrinking group of earners. Contrary to what many on the Left like to believe, those earners can always leave. Many already have. Other successful American job-creators, like Mark Zuckerberg and Whole Foods CEO John Mackey, are voting Republican with their wallets, despite the chagrin of Democrats.
And we’ll still have our debts to fix.