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akchin | 9 years ago

This might be unpopular, but California is a great example of a place where taxes are high, but it is not spent well. I remember looking at this a few years back, and although the state claims that 2/3 of state tax dollars goes towards education, a lot of it is supporting pensions and benefits of previous generation employees and teachers. While this is admirable, it essentially takes money away from today's generation for unsustainable promises made by unions and political leaders in the 80s and 90s. CA already has one of the highest marginal tax rates in the US of 9.5%, so it is understandable the woman does not want to pay more.

For schooling, Prop 13 is an even bigger issue. Even though property taxes are high for new buyers, schools are underfunded. Parents essentially are paying higher taxes in the form of fundraising to support science and other enrichment classes, which cannot be supported by the state. There were somewhat noble ideas behind Prop 13, but essentially what we have in California, is that newer residents of Californa bear a disproportionate amount of the burden.

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x0x0|9 years ago

While I'm with you on prop 13, we combine high income taxes with exceptionally low property taxes for long term property holders. Again, if we want nice things, we have to pay for them.

As for pensions, you say unsustainable promises, I say stealing from people who took cash later instead of cash immediately. Consider your last boss deciding to reach into your checking account and take $40k out because the business retroactively decided they overpaid.

According to this http://www.usgovernmentspending.com/year_spending_2016CAbs_1... pensions are 36.9/208.2 = 18% of the state budget.

bradleyjg|9 years ago

The point is that the politicians back then stole from the future. If they were going to promise cash in the future the should have set aside money back then to pay for it.

It's one thing when a government borrows money to pay for a capital project that will last long after they are out of office. The net present value of an accruing pension is an operating cost and should be paid for as the obligation is incurred.

maxerickson|9 years ago

It's possible to be unhappy with underfunded pensions and also think it would be unfair to change them retroactively.

gozur88|9 years ago

>As for pensions, you say unsustainable promises, I say stealing from people who took cash later instead of cash immediately.

This is really an accounting problem. In California, at least, changes to the pension system weren't reflected in the current budget as future obligations.

So for many years city and state controllers dealt with union demands by "off the books borrowing" in the form of more lavish pensions. City and state pensions really are unnecessarily lavish, and the reason is voters never realized what obligations they were being asked to shoulder.

specialist|9 years ago

"...a lot of it is supporting pensions and benefits of previous generation employees and teachers. While this is admirable..."

It's contract law. No admirable necessary.

Pensions etc are negotiated as part of the compensation package. Those former employees earned that money. It's not an entitlement, or charity.

Legitimate complaints would be gaming the pension system and chronic underfunding (kicking the can down the road).

twoodfin|9 years ago

They earned a promise from the government. That's not the same thing as earning the money, as many state and municipal employees will doubtless discover over the next few decades.