DiscussWorldIssues - Socio-Economic Religion and Political Uncensored Debate - View Single Post - Case study in Republican insanity: California to go belly-up?

**ElectraDupu** · 02-19-2009, 04:01 AM

CA has overspent and high taxed for decades, leaving no room to adjust revenue in a downturn. Furthermore, their tax structure was very heavily top loaded at higher income and capital gains, which proportionally dropped much more in the recession than a typical broader state tax base, savaging their tax base and demanding much higher adjustment than other states face. When your state finances sail on the edge for so many years, you are bound to fall over when a big crunch comes.

Capital gains are hardly an issue in this state since there are so many exemptions made into the law. For instance each year a person can sell a house (each and every year) and the first $500,000 in capital gains are completely free of the state capital gains tax. The only people who pay any state capital gains tax are people who realize more then $500,000 in capital gains per year; at least on real estate though there are similar exemptions out there for lots of other items.

02-19-2009, 04:01 AM	#27
ElectraDupu Join Date Oct 2005 Posts 428 Senior Member	CA has overspent and high taxed for decades, leaving no room to adjust revenue in a downturn. Furthermore, their tax structure was very heavily top loaded at higher income and capital gains, which proportionally dropped much more in the recession than a typical broader state tax base, savaging their tax base and demanding much higher adjustment than other states face. When your state finances sail on the edge for so many years, you are bound to fall over when a big crunch comes. Capital gains are hardly an issue in this state since there are so many exemptions made into the law. For instance each year a person can sell a house (each and every year) and the first $500,000 in capital gains are completely free of the state capital gains tax. The only people who pay any state capital gains tax are people who realize more then $500,000 in capital gains per year; at least on real estate though there are similar exemptions out there for lots of other items.
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