Side-Effects of Taxes

California has been a state in decline for a long time. I grew up there, and I loved it. When I left for college and med school, I knew I’d go back. I did, and I spent 7 more years there.

But when I left after that, I knew I’d never again go back.

Oh, maybe to visit every once in a while, but never again to live there. In fact, my mother still has the message that I left for her on her voice mail, almost 12 years ago, in which I told her to, “Shoot me! Just shoot me now, mom, if I EVER tell you that I’m thinking of moving back to this state!!!” If I recall, I’d been on the road for 3 or 4 hours and still hadn’t gotten outside the LA basin.

Now, it seems that the state is attempting to speed its implosion. Proposition 30, which was proposed by Democratic Governor Jerry Brown and voted into law last November, raises the top tax rate for state taxes to 13.3%. That’s just state income taxes, mind you, on top of federal taxes and in addition to whatever local taxes you have.

California is a state in which those earning more than $250,000 are already paying 62% of the tax bill. Those who bring home more than $450,000 (the top 2% of households) are covering 46% of the state’s taxes. And those who earn $1 million or more, just 34,000 people in the entire state, pay fully 25% of the taxes for the state. It is also a state in which over 50% of the people pay little to no personal income tax at all.

Phil Mickelson has been in the news the past several days for talking about something other than his golf swing. He dared to talk about the taxes in California. First, he talked about possibly leaving California and maybe even golf because of these punitive taxes. Then he apologized for speaking out in public about such a topic…not because he thinks he’s wrong in what he said, but because it’s too personal a topic to be discussing in public before he’s made his decision.

Now, I know Phil. We grew up a couple blocks down from his family. One of my brothers was in his class at school; I knew his older sister. He’s a good guy. And what gets me most about his remarks is that he didn’t take back what he said about the taxes at all. He simply apologized for having brought up such a personal topic (moving vs quitting golf) in public before he’s made his decision.

I think a lot of us are where he is. We know changes have to be made in how we do things. Whether it’s as drastic as uprooting and moving or changing what we do with our lives…maybe not. But certainly drawing down in our spending, starting to save more, or put aside food and provisions of all sorts. We might not know exactly what’s coming, but we know that tougher times are ahead.

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