Just 1 percent of California taxpayers are already providing 45 percent of the state’s income tax revenue. And such income taxes now fund half the budget. But unfortunately, in recent years the number of upper-income earners in California has radically shrunk — by a third between 2007 and 2009 alone.
In so-called “March in March” protests, thousands of students in California universities recently demonstrated in outrage over spiraling tuition costs.
At both the California State University and University of California multi-campus systems, tuition hikes in recent years have far exceeded the national average. Meanwhile, universities slash classes, cut key research, and rely even more on exploited and poorly paid part-time lecturers and graduate-student teaching assistants.
Yet against whom, exactly, are these cash-strapped students demonstrating? After all, their college faculties are unionized, largely liberal and sympathetic to their plight.
Apparently, wealthy Californians are either fleeing to nearby no-income-tax states or have become less well-off after years of economic downturn, higher taxes, and overregulation of business. Meanwhile, the number of California’s Medicaid recipients grew at 70 percent of the general population increase over the last two decades.
In short, there are no longer enough rich Californians to tax further to make up the state shortfalls. Nor can Californians explain why nearby states, with far less natural riches and without state income taxes, seem to be no worse off than California.