Clau-Clau-Claudius Had It Right
Greetings From Crescent City

Arnold's Rising Tide Initiative

Arnold Schwarzenegger, to the extent he has committed to anything, has said that he thinks the return of business to California is a goal he will pursue if he becomes governor. Daniel Weintraub at California Insider has done the numbers on Arnold's own tax returns -- showing a significant drop in income, and thus a substantial drop in tax payments, from 2000 to 2001 -- and seemingly agrees. It's The Rich whose taxes were keeping the state afloat in the first place:

I am not suggesting that you feel sorry for Arnold, or for others in his class. But remember this: in the tax year 2000, California had 44,000 people who earned $1 million or more. They earned 21 percent of the state's income and paid 37 percent of the income taxes, $15 billion in all. The following year, 29,000 people earned more than $1 million. Their incomes represented 12 percent of the money earned in the state, and they accounted for 25 percent of the tax paid, or $8 billion. That $7 billion drop was virtually all the decline in state taxes, the very decline that led to the deficit, since the state kept spending as if the money would keep pouring into the treasury.

Arnold's personal income drop between 2000 and 2001 cost the treasury $700,000. That's about 15 school teachers, or 10 firefighters at top pay. In California, when the rich get richer, government programs do better. And when they get poorer, the public sector takes the hit.
Gray Davis and, seemingly, Official Democratic Alternative Lt. Gov. Cruz Bustamante are aiming their actions (Davis' incilinations to sign legislation) and their rhetoric (Bustamante's critiques of Schwarzenegger over his pro-Prop. 187 vote) at the presumed lower end of the economic continuum (recent immigrants, legal or otherwise). It seems to me that, even if you take it as a given that policies favorable to those groups are in themselves Good Policies -- as indeed they may be -- you still need to have companion policies that are helpful to those who are going to have to Pay the Bills for your Good Policies. In other words, you need to have policies that will actually encourage the making of [taxable!] profits at the same time you are looking to send state-sponsored assistance to non-profitmakers; and on that score, there is little but silence from the Davis and post-Davis Democratic camps.

In related news, Micky Kaus seems to be the source authority for specific policy decisions demonstrating that Governor Davis actually deserves the recall. (Just click through, scroll down and read it all. Pretty darned damning, in my view.)


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