Feb
19
2013

As predicted: California’s 1Q revenues dropping back to earth. Hard.

Which is to say: as predicted by me. I had a feeling that California’s surprisingly high tax revenues in January were due to people rushing through existing taxable transactions before that state’s new rates kicked in; and lo! …I seem to have been correct.

The surge of revenue that showed up unexpectedly in state coffers last month may well be offset by a revenue dip in coming months, according to Gov. Jerry Brown’s administration.

[snip]

[An official California Budget office cash] report says the extra money was “likely the result of major tax law changes at the federal and state level having a significant impact in the timing of revenue receipts.”

Translation: it turns out that people – as usual – make their financial decisions via rational self-interest.  Give them a choice to legally avoid paying higher taxes, and it looks like they’ll take it. Also: amazingly, people are a lot more conservative about their own money than they are about everybody else’s.

Not much else more to say, except of course I can’t wait to see California raise taxes again in order to try to keep squeezing revenue out of its electorate. And do you know who else can’t wait? That’s right: Texas.  Hey, it’s not the Lone Star State’s fault that California seems so determined to test the Blue Model to destruction…

Via

 

Hot Air also brought out the schadenfreude. As is only right and proper.

Moe Lane (crosspost)

4 Comments

  • Patrick Thomas says:

    Even better than that is Brown using the 4Q revenues for budget purposes. By next year projected deficits should explode into a real nice mess.

  • jbird says:

    Do we have to bailout California when they go bust? Can’t we let them go bankrupt and have all their assets auctioned off to the highest bidder?

  • tnfriendofcoal101368 says:

    jbird: nope we bail them out for the same reason that the ECU has to bail out Greece, we are their currency provider i.e. banker. In addition, has Obama ever met a multi trillion dollar bailout, he didn’t think was a good idea. Actually, it will be a race to who collapses first: California or Illinois. Maybe Detroit, but yeah Meredith Whitney was wrong on when but there will be a large public default. (I mean there doesn’t have to be, Jerry Brown/Pat Quinn could cut spending, reduce taxes, attract business to their state, but I would bet on default and bailout).

  • […] “As predicted: California’s 1Q revenues dropping back to earth. Hard.”  Nobody tell the Washington […]

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