"azotic" wrote in message
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"Ed Huntress" wrote in message
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"azotic" wrote in message
...
New York, New Jersey, Connecticut and Illinois-states that are the most
heavily reliant on the taxes of the wealthy-are now among those with the
biggest budget holes.
As they've grown, the incomes of the wealthy have become more unstable.
Between 2007 and 2008, the incomes of the top-earning 1% fell 16%,
compared to a decline of 4% for U.S. earners as a whole, according to
the IRS. Because today's highest salaries are usually linked to
financial markets-through stock-based pay or investments-they are more
prone to sudden shocks.
After the dot-com bust, the state's revenues from capital gains fell by
more than two-thirds, to $5 billion in 2003 from $17 billion in 2001,
while personal-income taxes fell 15% over the same period. The recession
created a mirror image of the boom, with the wealthy leading the crash
and dragging tax revenues down with them. By 2002, California had a
budget shortfall of more than $20 billion.
http://online.wsj.com/article/SB1000...592684626.html
Perhaps the idiots in those states should stop depending on projected
earnings
before they spend thier citizens income in advance. Wishfull thinking
will not
fix thier budget busting spending spree. Free markets are a cruel
misstress.
Best Regards
Tom.
What do "free markets" have to do with it, Tom? What are you doing,
trying to explain economics or making a fruit salad?
--
Ed Huntress
After the dot-com bust, the state's revenues from capital gains fell by
more than two-thirds, to $5 billion in 2003 from $17 billion in 2001,
while personal-income taxes fell 15% over the same period. The recession
created a mirror image of the boom, with the wealthy leading the crash and
dragging tax revenues down with them. By 2002, California had a budget
shortfall of more than $20 billion.
To me it seems the markets had a lot to do with it in 2002.
How much tax revenue was lost when the the market created
the real estate bubble that imploded ?
Best Regards
Tom.
I may be reading you backwards. As for depending upon projected earnings,
there's a good subject for debate -- one that I couldn't, and wouldn't,
engage right now. d8-)
Your California figures are pretty strange in light of state reports. For
example, as of 1999, capital gains taxes were 26.13% of all income tax
revenues in the state (see table 5):
http://www.urban.org/uploadedPDF/1000613.pdf
If that fell by 2/3, it would equal 17.4% of California's income tax revenue
loss *all by itself*, disregarding any other revenue losses when the bubble
burst. It seems unlikely that the percentage represented by capital gains
would have fallen much between 1999 and 2001. The general trend at that time
was up. (BTW, California taxes all income, including short-term and
long-term capital gains, at the same rate.)
However, I have enough on my plate at the moment. Your point probably is
accurate, disregarding specifics. For the country as a whole, the total
revenue figures did not swing down, but your principle would still hold.
http://www.taxpolicycenter.org/taxfa....cfm?Docid=200
You might want to compare your figures with this, as well:
http://www.ebudget.ca.gov/pdf/BudgetSummary/BS_SCH2.pdf
--
Ed Huntress