California has been held up as an example by the right about how Democratic fiscal policies fail, citing the last few years of extreme debt and budget shortfalls in the Golden State. However, that is all over now, as California predicts a billion dollar surplus by the 2014-2015 fiscal year. The reason for the budget turnaround? California voters passed Proposition 30, which is — the simple version — a sales tax increase as well as a higher tax on individuals earning more than $250,000 and families earning more than $500,000. The new law is predicted to bring in an additional six billion dollars.
Darrell Issa, a California congressional Republican, disagrees that Prop. 30 is good for the state, saying, “Dramatically increasing taxes on entrepreneurs and small business owners, as Prop 30 does, is going to hasten the exodus of employers from California to other states, and the jobs and tax revenue will go with them.” However, the vast majority of small businesses are not owned by individuals bringing in a quarter to half million dollars annually, although Republicans have repeated this lie — and it is a lie — on the national level during fiscal discussions as well.
Governor Brown has rejected that thought, citing the state’s rapid job growth (fastest in the nation) as well as sending a not-so-subtle barb the Republican Party’s way, saying, “We’re leading the nation in job growth and Mitt Romney just spent Thanksgiving at his home near San Diego. There is only one Golden State, and it will continue to be a magnet for people all over the world – including former Republican presidential candidates,” as reported by FT.
California has been suggested as a model for the nation in fiscal talk debates, but as the right continues to believe — seemingly self-deluded — that cutting taxes for the rich will foster job growth, the argument about top-tier tax increases seems stagnated, despite the fact that raising taxes on the rich is overwhelmingly supported by the American people.