Fortunately, I have a simple and painless solution. This solution will require no sacrifices ~ there will be no tax increases, no fee increases, and no cuts in services. Further, this solution will require no mortgaging of future lottery benefits, and no firesale of our cherished freeways.
A Painless solution ? How is that possible. How would it work !!
Or, I should say... this solution will require no sacrifices from Californians. There will be no tax increases on Californians, no fee increases for use of California parks, no cuts in services in California, and no mortgaging of future benefits in California.
You see... we can simply close our budget gap by raising revenue from the citizens of Wyoming, Montana, Alaska and miscellaneous other small states that "do not count".
How is this possible ? Would that not be highway robbery ?
No, and no. Here is how it would work:
First, the budget shortfall is forceast to be about 16 billion dollars. So, that means we are required to raise an additional 16 billion dollars every year without increasing taxes, or increasing any fees etc.
Next, here is a breakdown of the revenue raised by the Great State of California
and here is the expenses
From the expenses chart, we can see that all expenses are non-negotiable; and that there is no "waste fraud and abuse" in the expenses. For instance, who would want to cut the budget for K-12 education ? Therefore, cutting expenses cannot be accomplished without compromising the primary goal: that the budget balancing will be a painless maneuvre.
From the revenue side, we can see that The Great State of California raises 35 billion dollars from a sales tax. A sales tax !! Isnt that a tax on consumption, and affects the poor more than it does the rich. Isnt that immoral ? Let us get rid of that evil sales tax.
But wait, if we eliminate the sales tax, we now have an additional $35 billion to make up for. We will need to increase the income tax rates so as to generate $35 billion. But this time, we will index the rates to be progressive. Oh, and while we are at it, we might as well increase the income tax rates so as to raise revenue by $51 billion. That way, we make up for the lost sales tax, and also for the current shortfall of $ 16 billion.
But didnt you say that the solution would be painless ? Now you want to raise taxes .. that is not painless
Oh, but it is... you see, the federal government lets you take a deduction on your federal taxes against the state taxes paid, and you are allowed to include your state income taxes, or your state sales taxes (but not both). By eliminating the state sales tax, and transferring all that tax burden to the state income tax, we have increased your federal itemized deductions. Thus, you will be paying the same amount as you did before...just that you will be paying more to your state and sending less to Washington DC.
But isnt that bad. We would be shortchanging the federal government
No, it would be all right...really. Currently the federal government sends $0.78 back to California for every $1.00 that it raises from California. Therefore, by sending less money to Washington, you are helping to correct that picture.
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