Breaking Bad: California vs. the Other States
by Richard Rider – Chairman, San Diego Tax Fighters
Version 2.25 Revised: 10 January, 2016
Updated version online at: www.TinyURL.com/CA-vs-other-states
Rider Blog: www.RiderRants.BlogSpot.com
Facebook “blog” page: www.Facebook.com/Richard.Rider
Here’s a depressing but documented comparison of California taxes and economic climate with the rest of the states. The news is not good (at least once a month, I update crucial data on this fact sheet):
Prior to Prop 30 passing in Nov. 2012, CA already had the 3rd worst state income tax rate in the nation. Our 9.3% tax bracket started at under $50,000 for people filing as individuals. 10.3% started at $1 million.
Now our “millionaires’ tax” rate is 13.3% – including capital gains (CA total CG rate now the 2nd highest in the world!). 10+% taxes now start at $250K.
CA now has by far the nation’s highest state income tax rate. We are 21% higher than 2nd place Hawaii, 34% higher than Oregon, and a heck of a lot higher than all the rest – including 7 states with zero state income tax – and 2 more that tax only dividends and interest income.
CA is so bad, we also have the 2nd highest state income tax bracket. AND the 3rd. Plus the 5th and 8th.
http://taxfoundation.org/sites/taxfoundation.org/files/docs/ff2013.pdf Table #12
CA has the highest state sales tax rate in the nation. 7.5% (does not include local sales taxes). Two new 2015 bills seek a combined $10 billion++ CA state and local sales tax increase. At least one will likely pass.
CA has the nation’s 5th highest “gas pump” tax at 59ut the same as .0 cents/gallon (January, 2016). But add in the new, unique 10-12 cent CA “cap and trade” cost per gallon, and CA is #1 (about the same as Pennsylvania). National average is 48.0 cents. Yet CA has the 6th worst highways.
http://www.api.org/statistics/fueltaxes/ (CA has nation’s 3rd highest total diesel tax)
California in 2015 ranked 14th highest in per capita property taxes (including commercial) – the only major tax where we are not in the worst ten states. But the median CA property tax paid per owner-occupied home is the 10th highest in the nation.
http://taxfoundation.org/sites/taxfoundation.org/files/docs/TaxFoundation_2015_SBTCI.pdf page 41
Average 2012 CA impact fee for single-family residence was $31,100, 90% higher than next worst state. 265% higher than jurisdictions that levy such fees (many governments east of the Sierras do not). For apartments, fee averaged $18,800, 290% above average outside state. The fee is part of the purchase price, so buyer pays an annual property tax on the fee!
CA has now instituted the highest “cap and trade” tax in the nation – indeed, the ONLY such U.S. tax. Even proponents concede that it will have zero impact on global warming.
California has a nasty anti-small business $800 minimum corporate income tax, even if no profit is earned, and even for many nonprofits. Next highest state is Rhode Island at $500 (only for “C” corporations). 3rd is Delaware at $175. Most states are at zero.
California small businesses failed in 2011 at a rate 69% higher than the national average -- the worst state in the nation.
http://money.cnn.com/2011/05/19/smallbusiness/small_business_state_failure_rates/index.htm (based on Dunn & Bradstreet study)
CA corporate income tax rate (8.84%) is the highest west of the Mississippi (our economic competitors) except for Alaska.
http://taxfoundation.org/article/facts-figures-2015-how-does-your-state-compare Table #15 – we are 8th highest in nation in per capita corporate tax collections
California’s 2015 “business tax climate” ranks 3rd worst in the nation – behind New York and anchor-clanker New Jersey. In addition, CA has a lock on the worst rank in the Small Business Tax Index – a whopping 8.3% worse than 2nd worst state.
The American Tort Reform Foundation in 2015 again ranks CA the “worst state judicial hellhole” in U.S. – the most anti-business. The U.S. Chamber of Commerce ranks CA a bit better – “only” the 4th worst state in 2015 (unfortunately, sliding from 7th worst in 2008).
CA driving tickets are incredibly high. Red-light camera ticket $490. Next highest state is $250. Most are around $100.
CA needlessly licenses more occupations than any state – 177. Second worst state is Connecticut at 155. The average state is 92. But CA is “only” the 2nd worst licensing state for low income occupations.
CA has the highest/worst state workers’ compensation rates in 2013, up from 3rd in 2012. CA rates 21.3% higher than 2nd highest state, 88% higher than median state. Yet we pay low benefits -- much goes to lawyers. http://riderrants.blogspot.com/2014/10/california-has-worst-workers.html
Tax Foundation study ranks CA as the 4th worst taxed state. But if counting ONLY in-state and local taxes, we are arguably the 2nd highest.
CA is tied for the 9th worst state unemployment rate (November, 2015) – 5.7%. National unemployment rate 5.0%. Nat’l unemployment rate not including CA is 4.9%, making the CA unemployment rate 16.2% higher than the average of the other 49 states.
http://www.bls.gov/web/laus/laumstrk.htm NOTE: We were at 4.8% in Nov, 2006 – vs. national 4.6%.
Using the lagging but arguably more accurate 2015 U-6 measure of unemployment (includes involuntary part-time workers), CA is 3rd worst – 13.3% vs. national 10.8%. National U-6 not including CA is 10.5%, making CA’s U-6 27.2% higher than the average of the other 49 states.
CA public school teachers the 3rd highest paid in the nation. CA students rank 48th in math achievement, 49th in reading.
http://www.lao.ca.gov/reports/2011/calfacts/calfacts_010511.aspx page 36
California, a destitute state, still gives away community college education at fire sale prices. Our CC tuition and fees are the lowest in the nation. How low? Nationwide, the average community college tuition and fees are more than double our California CC’s.
This ridiculously low tuition devalues education to students – often resulting in a 25+% drop rate for class completion. In addition, because of grants and tax credits, up to 2/3 of California CC students pay no net tuition at all! http://tinyurl.com/ygqz9ls
Complaints about increased UC student fees too often ignore key point -- all poor and many middle class CA students don't pay the UC “fees” (our state’s euphemism for tuition). There are no fees for most California families with under $80K income. 55% of all undergraduate CA UC students pay zero tuition, and another 14% pay only partial tuition. http://www.universityofcalifornia.edu/blueandgold/
1 in 5 in Los Angeles County receiving public aid.
California’s real poverty rate (the new census bureau standard adjusted for COL) is easily the worst in the nation at 23.4%. We are 57.3% higher than the average for the other 49 states (up from 48.8% higher last year). Indeed, the CA poverty rate is 17.0% higher than 2nd place Nevada.
http://www.census.gov/content/dam/Census/library/publications/2014/demo/p60-251.pdf page 9
California has 12% of the nation’s population, but 33% of the country’s TANF (“Temporary” Assistance for Needy Families) welfare recipients – more than the next 7 states combined. Unlike other states, this “temporary” assistance becomes much more permanent in CA.
California ranks 48th worst for credit card debt and 49th worst for percentage of home ownership.
California has the 2nd lowest bond rating of any state – Basket case Illinois beat us out for the lowest spot. We didn’t improve our rating – Illinois just got worse.
Average California firefighter paid 60% more than paid firefighters in other 49 states. CA cops paid 56% more. CA 2011 median household income (including gov’t workers) is 13.4% above nat’l avg.
Of 100 U.S. real estate markets, in 2013 CA contained by far the least affordable middle class housing market (San Francisco). PLUS the 2nd, 3rd, 5th, 6th and 7th. San Diego is #5 (with “middle class” affordable homes averaging 1,056 sq. ft.)
CA has 2nd highest annual cost for owning a car – $3,966. $765 higher than the national average.
CA residential electricity costs an average of 40.7% more per kWh than the national average. CA commercial rates are 66.5% higher. For industrial use, CA electricity is an astonishing 94.4% higher than the national average (Sept, 2015). The difference is growing between CA and the national average. NOTE: SDG&E is considerably higher. http://www.eia.gov/electricity/monthly/epm_table_grapher.cfm?t=epmt_5_06_a
A 2015 U-T survey of home water bills for the 30 largest U.S. cities found that for 200 gallons a day usage, San Diego has the 3rd highest cost – 73.7% higher than the median city surveyed. At 600 gal/day, San Diego was again 3rd highest – 81.7% higher than the median city.
In 2012, our supply of California businesses shrunk 5.2%. In ONE year. NOTE: That's a NET figure – 5.2% fewer businesses in CA in 2012 than were here in 2011. Indeed, in 2012, CA lost businesses at a 67.7% higher rate than the 2nd worst state! http://riderrants.blogspot.com/2013/07/in-2012-ca-lost-businesses-at-677.html
The top U.S. CEO’s surveyed rank California “the worst state in which to do business” for the 11th straight year (May, 2015).
From 2007 through 2010, 10,763 manufacturing facilities were built or expanded across the country — but only 176 of those were in CA. So with roughly 12% of the nation's population, CA got 1.6% of the built or expanded manufacturing facilities. Stated differently, adjusted for population, the other 49 states averaged 8.4 times more manufacturing growth than did California.
http://www.cmta.net/20110303mfgFacilities07to10.pdf -- prepared by California Manufacturers and Technology Association
California is now ranked as the worst state to retire in. Easily the lowest percentage of people over age 65. We “beat” ’em all – NY, NJ, etc.
The median Texas household income is 10.9% less than CA. But adjusted for COL, TX median household income is 31.6% more than CA.
Consider California’s net domestic migration (migration between states). From 1992 through 2014, California lost a NET 3.7 million people to other states. Net departures slowed in 2008 only because people couldn’t sell their homes. But more people still leave each year -- in 2014 we lost 79,340. Again, note that these are NET losses. Sadly, our policies have split up many California families.https://twitter.com/SenTedCruz/status/464827967747526656/photo/1
It’s likely that it’s not the welfare kings and queens departing. They are primarily the young, the educated, the productive, the entrepreneurial, the ambitious, the wealthy (such as Tiger Woods) – and retirees seeking to make their nest-eggs provide more bang for the buck.
NOTE: To see more such fact-based disclosures, go to my blog at www.RiderRants.blogspot.com, or my more active Facebook “page” www.Facebook.com/Richard.Rider (“friend” me). The very latest two-page fact sheet Word file (a wonky handout) is available free upon request.