California in the hole $21.3 Billion.

[BD]

My point is that we yet don't have it as bad as other countries ( as far as sales tax), as for the founders of this country, watch this:

http://www.youtube.com/watch?v=mXr6BrKsdm8&feature=PlayList&p=CE024628590C1D4B&index=0

In this country nothing like this recession happens for no reason.

Dude!!!

I have been to many European countries, I don't recall 20%+ sales tax.

Regardless, be careful with what you wish for. Californians voted down the propositions last week, it will not take much for the government to add it by the order of the court. Just look at the Gay Marriage issue, how they implemented the tobacco tax, etc.


As for the $21 billions deficit, it is really nothing when compare to how much the Obama administration's purchase of the car industry. California has around 30 million people, how many people are working for GM and Chrysler?

He is writing checks faster than treasury is printing cash.

 

[steveny]

There is just too many damn people. That is really the only problem.

 

[queenlives]

(as a native - and still resident - californian i find this)

on many levels, an interesting (and very personal) thread.

having said that, please remember the off topic guideline above,

"Tread lightly on religion and politics."

thx,
hal

 

[Brylek]

Dude!!!

I have been to many European countries, I don't recall 20%+ sales tax.

Regardless, be careful with what you wish for. Californians voted down the propositions last week, it will not take much for the government to add it by the order of the court. Just look at the Gay Marriage issue, how they implemented the tobacco tax, etc.


As for the $21 billions deficit, it is really nothing when compare to how much the Obama administration's purchase of the car industry. California has around 30 million people, how many people are working for GM and Chrysler?

He is writing checks faster than treasury is printing cash.

First I do not want this country to have tax this big, if you look at my original posting it says FYI ( for your information) so you read it and thought " hey - we yet don't have it as bad", most eoropean countries have tax, or they call it vat ( value added tax ) included in the price of the item.

... so it is from 15% to 25% but you dont see 15 much more like 21/22
http://en.wikipedia.org/wiki/Value_added_tax#European_Union

 

[docjohn]

There are too many flaws in the state/national budget to describe everthing,but a common theme and recuring financial nightmare for many municipalities again comes down to unsatisfied union contracts,or the heavy burden of perpetual 80-90% pensions.As an example Scranton is in the distressed category which makes it impossible to get optimal interrest rates as well as government program intiatives.One of the main reasons is the inability for the local government to settle old scores with the local service unions.The same with Cali.The states in most financial trouble are the biggest taxers,thus they are spending like drunken sailors.The answer to a drunk is not to give more etoh

 

[Ski_Banker]

One other measure (albeit a highly unlikely one) that would help CA, NY and a few other states, would be for the Fed Gov't to somehow mandate a near-flat state income tax rate for all 50. At least with this measure, States wouldn't have to worry about becoming non-competitive for businesses due to tax reasons.

Would it work? Yes. Is it constitutional, and would it pass muster with those states that are relatively healthy and those that currently enjoy being at an income tax competitive advantage -like FL? I highly doubt it.

 

[quack]

I started a company in san jose last year and the business forms and minimum taxes alone came to $2500 vs like $75 dollars in other states. They also added a hey you're in downtown so pay 200% more (not kidding). Crazy income tax and employment laws as well. I have nooo idea how tacaria's and cheesy diners get started unless they aren't reporting anything. The only reason tech companies stay here is tradition. Techies flock here because of tradition and CA is milking them and pissing away the money. It may sound like I'm complaining but it doesn't matter this place is worth it! haha.

 

[Ski_Banker]

I started a company in san jose last year and the business forms and minimum taxes alone came to $2500 vs like $75 dollars in other states. They also added a hey you're in downtown so pay 200% more (not kidding). Crazy income tax and employment laws as well. I have nooo idea how tacaria's and cheesy diners get started unless they aren't reporting anything. The only reason tech companies stay here is tradition. Techies flock here because of tradition and CA is milking them and pissing away the money. It may sound like I'm complaining but it doesn't matter this place is worth it! haha.

Since a lot of new businesses today are global in nature (e-commerce of some sort), then geographic location doesn't make much difference. It's just as easy to start up in FL (no income tax) and live in a fairly nice place, versus California. And -- most importantly -- California's budget problems will only be resolved by either writing off a lot of debt, or by growing out of the problem. Substantial growth will never happen as long as it is at such a tax disadvantage.

BTW -- the U.S. is facing exactly the same scenario. It just has the credit, relative to any other country, to be able to inexpensively issue more debt. For now. Or inflate its currency (devalue the debt).

There are only two ways to get out of debt spiral for a person/municipality/business/sovereign. Earn & grow your way out of it, which requires putting in place *very* pro-growth policies (and also hope for some big technological advancement that spurs innovation and productivity like the Internet). Or default/inflate.

(handing GM and Chrysler over to the UAW, while screwing the senior debtholders, is most definitely not a pro-growth policy, and it will have long-lasting effects on how capital is deployed. Very very very bad decision IMHO :frown.

 

[queenlives]

The problem that Cali faces is that just raising taxes, substantially, to fill the budget deficit will result in lost businesses to lower tax states, and those that remain will cut jobs if they can still operate with fewer staff. Raise property taxes? That'll lead to a still deeper housing bust.

There's only one solution and that's a Gov't bailout. If current debtholders don't take a haircut, then the bailout will become bailouts, every year.

California may be the posterchild, but there are many other state and local gov'ts in exactly the same situation. This is unfortunately just the tip of the iceberg.

(italics on last sentence are mine)

sadly, ski, i believe you're correct on each of these. i would also agree with your flat-tax (pardon the pun) assessment. and, speaking of taxes, i would be mildly surprised if, over the next few years, we do not see all internet-based transactions taxes by fed, state and / or local govts.

seems to me we're in for some fairly sizable state and local job / services cuts in the very near future... just as in the private sector.

 

[quack]

Since a lot of new businesses today are global in nature (e-commerce of some sort), then geographic location doesn't make much difference. It's just as easy to start up in FL (no income tax) and live in a fairly nice place, versus California.

Networking is pretty insane here for companies. If you talk loud enough in a coffee shop people will stop by if they think they can help or need help. Today me and a buddy were talking about data visualization and turned out the guy behind us was working in the same area, even had his laptop there coding it. That kind of stuff happens often. When I lived in FL it didn't happen at all unless I was talking about the Gators. :biggrin: So for me at a startup stage it's about connections and the bay area is great for that. Other types of companies probably wouldn't benefit as much like you mention.

 

[queenlives]

Networking is pretty insane here for companies. If you talk loud enough in a coffee shop people will stop by if they think they can help or need help. Today me and a buddy were talking about data visualization and turned out the guy behind us was working in the same area, even had his laptop there coding it. That kind of stuff happens often. When I lived in FL it didn't happen at all unless I was talking about the Gators. :biggrin: So for me at a startup stage it's about connections and the bay area is great for that. Other types of companies probably wouldn't benefit as much like you mention.

+1

last week a close friend of mine sent me an email saying that while he and one of our former co-workers were in a coffee shop discussing an app they were designing (and using some euro / offshore coders), a guy at the table next to theirs asked if they might know someone who worked with small / emerging euro-based small software companies... he needed input on a contract issue.

since that's what i do (work with emerging isv's, often int'l), they sent him to me.

small world, getting smaller every day.
hal