The government announces tax hikes for the rich earning over 250k a year. The goal is to raise taxes and pay down the deficit. It seems that many people in government cheat on the taxes they owe. How do you overlook 100K in income as a future Secretary of the Treasury? Nationwide, a lot of people have lost their jobs, so there are fewer taxes to be paid. The taxes collected next year will be a lot less than what they were this year.
Increasing tax rates does very little. The same thing happened in the 1930’s. State legislatures back then figured that increased taxes would result in increased revenues. The results proved to be the exact opposite. People instead of hanging on, gave up from the added tax burdens and walked away.
California is doubling the vehicle registration fee; well I’ve got a car that will get sold. I don’t need it. Increased costs force everyone to rethink financial decisions. My cable TV rate went up I decreased to just the basic channels. The net effect, the government collects less by asking for more.
Car sales are in the dumps, that’s a big ticket item for state and county budgets. Raising the state sales tax by 1% is incentive enough to run a vehicle until it drops. Paying 9% sales tax on a new car kind of makes you choke while making General Motors cry (over lost sales). California could file for bankruptcy in the middle of July. They could file for stupidity right now, but sadly the route you take to arrive at bankruptcy is of no concern to the courts.
Where is all of this new tax money coming from with 10% unemployment? We kid about the Tooth Fairy saving us, but this seems a little too real. How do you spend your way out of a bankruptcy?