Bergheim Follies: A Glimpse Of The Future

The golfer Phil Mickelson sounded off the other day about California's new, higher state income tax rates.

Phil Mickelson gave a civics lesson after his play Sunday in the final round of the Humana Challenge. The lecture: I’m not going to pay more in taxes than I can take home to my wife and kids.

As a longtime California resident, Mickelson vented after shooting a final-round 66 for a 17-under-par 271 total and tie for 37th in his 2013 debut. Last fall, Californians approved Proposition 30, which boosts the state income tax to 13.3 percent on earnings of $1 million or more. That’s a 29.1 percent increase from the previous “millionaires tax” in a state with tremendous fiscal issues.

Compound that increased liability with the recent changes to the federal tax code, which bumps the top bracket to 39.6 percent from 35 percent to avoid going over the so-called fiscal cliff, and Mickelson’s tax hit is substantial.

Predictably, he was excoriated by leftists who believe that they have a greater claim on Phil's -- and by extension, our -- money than he does. (Warning: Liberal claptrap followes. Put down all liquids before reading further.)

In his second inaugural, President Obama called upon us to rededicate ourselves to the nation's enduring values -- freedom and equality, and squaring those ideals with reality -- by rebuilding our country and its infrastructure, so that the pursuit of life, liberty and happiness will not be limited to the few who can buy them for themselves, but to the many, to "we the People." As Obama said, "The patriots of 1776 did not fight to replace the tyranny of a king with the privileges of a few."

We are now hearing from one of the privileged few, Phil Mickelson...

... Forty percent of $60 million is $24 million. Seems more than enough to feed your family, support your lifestyle and keep your private jet in the air.

First, the math: after state and federal income taxes, Mickelson is 'permitted' to keep 40% of his estimated $60 million annual income.

Second, the attitude: notice how 'they' believe that (a) they get to decide how much of your money you can keep; (b) you should be grateful for their generosity; and (c) they get to pass judgment on how you decide to spend YOUR money.

GMAFB!

Anyway, back to the liberal drivel.

Coming on the day of the president's stirring inaugural, your complaint sounded a discordant, indeed sour note...

... Don't just be a taker.

"Stirring inaugural" my ass. It was nothing but a thinly veiled divisive attack on anyone whose views differ from the Anointed One. And how on God's green earth does that fool see Mickelson as a taker? Seems to me he's putting one helluva lot more into the state's kitty than he is taking out.

What the liberal clowns running California and their lackeys fail to realize is that Phil Mickelson and his fellow millionaires are just the tip of the iceberg.

One of the best indicators of a state’s economic health, according to John Merline, writing in Investor’s Business Daily, is the “U-Haul Index” (first publicized by economist Mark Perry) to see what people are paying to move into, or out of, the state. Renting a 20-foot truck one way from San Francisco to San Antonio, Texas, for example, costs $1,693. Going in the other direction, however, costs only $983 for the same truck.

Gee, thanks a lot. If I want to see a bunch of over-aged spaced-out granola-eating hippies I'll just go up the road a ways and visit Austin.

It isn't all about taxes, however. (California's) regulatory environment and yawning fiscal deficits are chasing companies away to more favorable locales. Part is the state’s determined efforts to increase still further its tax burden on high income earners — now an astounding 13 percent — along with its implementation of policies favored by the Obama administration in Washington. As Joel Kotkin of NewGeography.com put it,

California will serve as the prime testing ground for President Obama’s form of post-economic liberalism. Every dream program that the Administration embraces — cap and trade, massive taxes on the rich, high-speed rail — is either in place or on the drawing boards.

Despite the state’s efforts to redistribute the wealth from those who earned it to those who didn't, “the ranks of the poor have swollen to the point that the state, with 12% of the nation’s population, accounts for one-third of its welfare cases,” notes Kotkin.

That last paragraph is very telling. Build a liberal utopia and it'll last until the people with jobs get tired of paying for an army of faceless 'dependents.' Intelligent, hard working, successful people are voting with their feet and moving out. People who are unable or unwilling to find and hold good-paying jobs are likewise voting with their feet and staying put or moving in.

Take that 'punish the successful' approach and extend it to businesses. What happens? They bail out of that failed state as fast as they can.

Today, California is experiencing the fastest rate of disinvestment events based on public domain information, closure notices to the state, and information from affected employees in the three years since a specialized tracking system was put into place.

(California's) losses are occurring at an accelerated rate. Also, no one knows the real level of activity because smaller companies are not required to file layoff notices with the state. A conservative estimate is that only 1 out of 10 company departures becomes public knowledge, which means California may suffer more than 2,000 disinvestment events this year. The capital directed to out-of-state or out-of-country, while difficult to calculate, is nonetheless in the billions of dollars.

The top five destinations are (1) Texas, (2) Arizona, (3) Colorado, (4) Nevada and Utah tied; and (5) Virginia and North Carolina tied.

Six of those seven states are Right to Work states. Only Colorado is not.

Five of those seven states are in the Top 10 of states with the best business climate. Texas is #1, followed in order by Utah at #2, Virginia at #3, then North Carolina (#4) and Colorado (#8). Arizona checks in at #22, California is #40, and Nevada is ranked at #45. The only reason I can think of for businesses relocating from CA to NV is because Nevada is just across the state line, so it's a short move. (I know - doesn't make much sense to me either.)

In addition to taxes, there's a bloated and business-hating regulatory bureaucracy to contend with.

Sadly, even if California chooses to lower its taxes it still may not be enough; the regulatory red tape is simply too onerous and costly. Hardee’s and Carl’s Jr. restaurants are no longer expanding in California as it takes roughly two years to get through the regulatory process for one restaurant.(TWO YEARS?!?!? Unfrigginbelievable) Compare this with Texas where it takes about six weeks and $200,000 less. If this is what it takes for a fast food chain to get started, one can only imagine what it takes for a large business to move in. Even the companies that aren’t leaving California are expanding elsewhere. Google, eBay, and Intel are all opening new locations outside California.