Depending on the day California taxpayers are on the hook for $25-28 billion of debt, however according to one state watchdog group, this number is just the tip of the iceberg.
California Political News reported that the $25 billion figure does not include $10 billion in outstanding lawsuits, $3 billion owed to government schools or the $146 billion owed to the California Teachers’ Retirement System (CalSTRS).
If these numbers don’t resonant with the voters, the Golden State pension funds are destined to collapse the state. Currently California taxpayers pay nearly 25 percent of the teachers’ bloated pension fund for which they are treated to some of the worst schools in the country. Currently, Los Angeles County only graduates 50 percent of its high school students.
“The governor is ignoring that they (teachers’ pensions) need another $4 billion a year, every year, for CalSTRS,” said Marcia Fritz president of California Foundation for Fiscal Responsibility.
While there have been rumblings of revamping the antiquated Internal Revenue Service (IRS) on a national level, financial experts think the time is right for California to lead the way with a flat tax.
“If done right, it would profoundly and positively change the economy in California. A low single-digit rate would unleash creativity,” said Steve Forbes of Forbes Magazine. The genius behind the flat tax is the more you make or spend the more you pay. The added bonus is the flat tax could eliminate special interests and level the playing field for those paying taxes.
Why not implement the flat-tax program? If it fails, California goes down in flames- if it works the Governor takes the glory and Beltway politicians will have no more excuses to avoid revamping the IRS.
Most voters would like to banish lobbyists’ and a flat tax would do just that. By only allowing dependants to be claimed on taxes, the special interest groups would starve because lawmakers could no longer provide them with key tax breaks.
The new IRS would also hold more Americans responsible for paying taxes therefore affecting their take-home pay and encourage them to vote accordingly.
California is currently one of the most expensive states to live and conduct business in and the continual bevy of regulations, oppressive business taxes and generous entitlements have only resulted in large businesses fleeing to more business-friendly states.
Businesses like Bing Energy, who produces hydrogen-fuel powered cells, is moving its manufacturing and corporate headquarters to Florida in order to save more than $150 million in taxes. Because the Sunshine State doesn’t have an income tax, Floridians are able to recruit companies throughout the country and increase their bottom line.
Desperate times should provoke lawmakers to do the right thing, but for the meantime it looks as if California politicians intend to carry on with business as usual- at the expense of the taxpayer.
© Copyright 2011 Kimberly Dvorak All Rights Reserved.
Continue reading on Examiner.com: Shady California bookkeeping creates the nation’s largest budget shortfalls – San Diego County Political Buzz | Examiner.com http://www.examiner.com/county-political-buzz-in-san-diego/shady-california-bookkeeping-creates-the-nation-s-largest-budget-shortfalls#ixzz1FHQO98Sm