Forum Replies Created
-
AuthorPosts
-
EconProf
ParticipantAmen Ctr70.
Reminds me of one definition confirmed by the recent election: majority rule democracy is when two wolves and a lamb vote on what to eat for lunch.ParticipantBottom line, Prop 30’s increase in CA state income taxes retroactive to all 2012 earned income may not be fair, but it will not be disallowed by the courts.
ParticipantUR: Just trying to analyze the economic and societal impact of the policy, and was building upon your thorough description of its mechanics. Would be interested to know your thoughts on my interpretation.
ParticipantThis program is a wonderful example of what happens when the local government interferes with the natural outcomes of the free market. In this case, five out of ninety buyers get a 20% break on the purchase price. The initial impact is a slightly higher price for the other 85, since the developer has to spread the discount among the other buyers.
That should only amount to a $5000 bump to their price. But with the “cloud over the title” that has been described, the hit to future values upon resale is unknown, and could be much more. Knowlegeable buyers will steer clear, thus hurting prices and costing the developer an unknown amount.
So the government manages to cost the vast majority of buyers much more than the subsidy to the lucky few poor families who get to buy, who, by the way benefit little in terms of future appreciation. The developer is forced to do this in order to get permission to build to satisfy local housing activists (and I believe to get higher densities), and politicians get to claim they are doing something to lower housing costs. And the few buyers that are helped are a tiny fraction of the needy population. Net net society as a whole loses far more than it gains.
We could lower housing costs far more efficiently by removing silly barriers to growth that local governments erect.ParticipantReread, not retread.
Too much turkey.
Zzzzzzzz…ParticipantWhoops. Just retread your post. Didn’t mean to sound snarky.
ParticipantAnd your point is…
ParticipantU haul truck prices are based on supply and demand.
It costs 983 to take a truck from San Antonio to San Francisco, and 1693 to go the other direction.November 13, 2012 at 8:51 AM in reply to: Making $275K as a dentist, $400K owed in Federal Student Loans, $120K behind on Taxes #754601ParticipantOCrenter is right because he was able to distinguish between AVERAGE tax rate and MARGINAL tax rate. A lot of journalists and politicians also get this wrong.
Average tax rate is your income tax paid relative to total income. Marginal tax rate is the amount of tax paid on your last dollar earned, or the next dollar you chose to earn. In a progressive tax system like ours the first few thousand earned have no tax levied in a particular year. Once earnings get high enough, the marginal rate marches up to about the 50% level, state plus federal, depending on the state. In CA the highest federal marginal tax rate is in the mid-30% range, and the CA state highest marginal tax rate will soon be 13.3%, thanks to the passage of Proposition 30. The fed rate will go up in 2013 too (even if the fiscal cliff is avoided). That means the marginal rate for high earners will soon be well over 50% for Californians.
Economists like to concentrate on the marginal rate, because that is what people consider in their decision-making: whether to earn more or less, move to another state or not, put another family member to work, etc.November 11, 2012 at 7:26 AM in reply to: OT-Why Did CIA Director Petraeus Suddenly Resign … And Why Was the U.S. Ambassador to Libya Murdered? #754345ParticipantI am usually skeptical of conspiracy theories, especially sweeping and detailed accounts like this one. However, it has a ring of credibility to it, especially in how it fills in a lot of blank spaces in our understanding of the Bengazi incident. It appears that now that the election is over, a lot of political and economic coverups will be unmasked–too late, unfortunately.
ParticipantRather than reform public schools in CA, we have just thrown more money at education. Instead of pay and promotions based on merit, we continue to use seniority. When layoffs occur, the youngest and most energetic teachers are let go, usually in the economically disadvantaged areas. Our test scores and graduation rates put us 47th or 48th in the nation, yet our teachers are the highest paid compared to other states (google teacher pay by state, or some similar wording). In short, we are already taxing ourselves heavily, and getting very little productivity for it.
ParticipantProp 30 will bring in way less than the $6 billion its backers claim. That’s because taxpayers and businesses will accelerate their exodus to tax-friendlier states. Our unemployment rate will rise and our fiscal situation worsen. This tax targets the very people and busineses we need to keep.
ParticipantHistorian Stephen Ambrose had a great quip that went something like: God did not give men enough blood to fuel the brain and penis at the same time.
Participant[quote=spdrun]High earners and employers = “moving out” in name only. Kind of like a lot of companies having their HQs in Delaware.[/quote]
Yes, the corporate headquarters and the high up executives may be staying–they like the coastal lifestyle and weather, but the other 90% of the company–the production workers–are moving to other states. Those middle-class families are paying taxes elsewhere, which accounts for much of California’s fiscal problems, now and in the future. Our middle class is shrinking, while our very poor and very rich grow–not exactly healthy for civic involvement, educational attainment, faith in the future, etc. By the way, this is the exact opposite of Minnesota, which has a strong middle class as has been pointed out by the other posters here. -
AuthorPosts
