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A plunge in taxes pushes California’s budget surplus to nearly $ 100 billion

Filled with tax revenues from California’s tech executives and other wealthy citizens, California’s budget surplus is expected to reach nearly $ 100 billion, benefiting the state’s Democratic Governor Gavin Newsom for the election year. increase.

Newsam, who campaigned four years ago as a leader in public resistance to then-President Donald Trump, declared on Friday that the surplus was “simply unprecedented.” Newsom tackles climate change, addresses chronic homelessness, California’s “Unwavering value“.

Despite the human and economic damage caused by the Covid-19 outbreak to the state, California’s technological, logistics, and financial industries thrived, making this the third consecutive year of unexpected storms for California. increase. And education.

“It’s pretty incredible momentum and sustainability of recovery,” he said.

California’s projected surplus is higher than total spending in all US states except New York and Texas. Much of that additional income is due to the 13.3% tax on capital gains. In short, the state’s financial resources are swelling with the fast-growing stock and real estate markets. The top 1% of California taxpayers pay about half of the state’s personal income tax.

“It’s a sign of what’s happening …. Wealth and success are concentrated in the hands of a few people in this country and around the world who enjoy affluence in a historic and unprecedented way.” New Sam said.

However, economists say the state’s gradual tax system remains vulnerable to shocks as inflation and interest rates rise and stock markets fall.

“There will be a recession,” says Lee Ohanian, a professor of economics at UCLA. “California’s budget is fixed to explode when it’s in recession and the stock market is skyrocketing.”

However, Newsam said the budget included safeguards with a $ 37 billion reserve, including $ 23.3 billion in the state’s Rainy Day Fund.

A surplus arises amid growing concerns among economists about the loss of competitiveness of the state. California has experienced a corporate outflow in recent years, and prominent entrepreneurs such as Elon Musk have complained loudly about the state’s high taxes and regulations.

Tesla, Oracle, Palantír and Hewlett Packard Enterprise are one of the companies that have relocated their headquarters from California. With low tax rates and handing restrictions, Texas has attracted many businesses from California.

Companies aren’t the only ones leaving. A sufficient number of citizens left the state and lost their seats in the House of Representatives. Kay accuses the high cost of living in California.

“We have a problem of competitiveness, but frankly, I think it’s more of an individual Californian … People who can’t make the future here because of the high cost of living.” Says Kay.

“We are losing a cohort of middle-income, mid-career Californians who can’t afford to buy a house here, can’t afford to rent a house here, can’t afford to live in an area with a good school. . “

Newsom’s budget rarely addresses such long-term concerns directly. Instead, the governor is proposing $ 18 billion in inflation bailouts where millions of California car owners receive a $ 400 check to offset high fuel prices. Approximately $ 4 billion will be paid to low-income earners who are struggling to pay utilities and rent. SMEs will also see some tax cuts.

Refunds and stimulating checks can be popular with voters dealing with rising costs. Newsom, who faced an effort to resign him last year, doesn’t seem to face a formidable challenger in the fall elections so far. Like his first practice, he positions himself as the leader of a refuge nation for progressors across the United States.

US Constitutional Right to Legality abortion Threatened by a possible Supreme Court ruling, Newsam seeks to position California as a sanctuary for women seeking proceedings. His budget proposes $ 125 million to serve women traveling from states where abortion is illegal to California.

This move could be popular in California, a solid Democrat who hasn’t elected Republicans to state-wide positions since 2006.

“Here in California, we grow the economy and are bright to everyone, while gridlock continues in Congress and right-wing fanatics turn state capitols across the country into laboratories of hatred and oppression. We are working to implement truly comprehensive policy changes to create the future, “Newsom said in a statement.

A plunge in taxes pushes California’s budget surplus to nearly $ 100 billion

Source link A plunge in taxes pushes California’s budget surplus to nearly $ 100 billion

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