By TomKandoBy the time you read this, California may have a budget, and it may no longer be paying people with IOUs, but then again, you never know. So let me try to help the legislature and the governor once more:
1. The Budget deficit is $26 billion. There are 37 million people in California. If every Californian were to pay a one-time $700 surcharge, the deficit would be wiped out. Or if you prefer, there are 12 million households in California. To wipe out the deficit, each household would have to pay a one-time average (=mean) surcharge of $2,200.
2. Unfair, you say. Some could afford this, but for many it would be hard. Okay, so the surcharge could be progressive, like the income tax. The rich would be hit with a larger tax surcharge than the poor.
3. Also, using average(=mean) income is unfair. The median (half are under it, half over) is fairer. Median annual household income in California is $50,000. There are 6 million households making less than $50K a year, and 6 million who make more. To erase the $26 billion deficit would require that every household under 50K pay $1,100, and every household over 50K pay $3,300.
4. But wait, it’s not like we need to raise $26 billion: The legislature has already agreed about many cuts. Let’s say that only half the deficit still needs to be funded. This reduces the liability to a one-time $550 surcharge for every household that makes under $50K, and $1,650 for households earning more. This raises over $13 billion.
5. By the way, average household size is three, so for those making under $50K, the liability would be $183 per person, those making over that would pay $550 on average. People could pay installments:The poor would be hit with a $15 monthly bill for one year, and the rich with a $46 bill. And if you wanted, you could make the surcharge more progressive, and use more than two income categories.
6. If everyone else chipped in, I wouldn’t mind sending the Franchise Tax Board an extra $67 per month for a year (my half of my household’s liability. I am in the rich half of the population). That’s less than my fax bill, less than a dinner for two at Frank Fat’s. That way California would not collapse, and 37 million people would have a life.
7. ...Oh yes, what about future years? Well, first of all,don’t ever ask me to do this again. Furthermore, make sure you set aside a safety-net fund. Finally, index the state budget to population growth and inflation. The only problem is: This plan is far too simple and reasonable to have the remotest chance.leave comment here
3 comments:
Surely you have heard of the term :structural deficit".
The time to consider your proposal is *after* major changes have been
forced. Otherwise you are just continuing to play the same old games, and
I can guarantee you that your proviso that "this is the last time" will be
laughed at and ignored, as it has been for the last 10 years or more.
Of course.
I think you forgot that when you make people spend money on fixing the deficit ("instead of two dinners at frank's") Franks might go bankrupt, or at least will yield less taxes. And so will all other companies and their employees that miss out on that money.
So actually, you need more than just the amount of the deficit.
Post a Comment
Please limit your comment to 300 words at the most!