Taxing the rich has seemed to be one of the Band-Aid solutions for California’s budget, but that’s dangerous as seventy percent of the General Fund is already provided by personal taxes on just five percent of the population. That small five percent is only about two million of the forty million in the state.
As a result of California’s priorities and choices made on pensions, energy, and being a sanctuary state, the general fund budget has been growing steadily since 2011, financed by the continuous growth of the stock and real estate markets, but lookout when those markets dip.
Income to the state from those five percent should be great in 2020 as it will reflect the growth in 2019 of the stock and real estate markets. However, the future doesn’t look as rosy. A recession may seem eminent, especially if the stock and real estate markets do not recover in 2020. There appears to be a forthcoming huge gap in 2021 between the General Fund needs that continue to grow, and the reduction in funds available in 2021 from that elite five percent.
Nationwide, small businesses make up over 99.9 percent of all thirty million businesses in America and employ about fifty-nine million people. In California alone, there are more than four million small businesses which employ more than seven million people across the Golden state.
Among the largest sector of small businesses in California are the 90,000 restaurants, of which 30,000 may close permanently as a result of the COVID-19 impacts. If the four million small businesses in California also see a thirty percent closure rate the ramifications on employment could be devastating, as sixty-nine percent of Americans have less than $1,000 in ready savings.
As we’re beginning to conquer COVID-19, we’re learning that the world may not “NEED”, or more succinctly, needs “less”, is the energy needed by all those airline flights and cruise ships, that also require billions of vehicle trips to and from airports and hotels.
The social changes with COVID-19 may be a prelude to life with less fossil fuels. With COVID-19 we’ve seen extensive self-imposed social adjustments to transportation that are very similar to what will be required to live with less fossil fuels in the future.
Life without fossil fuels, like the lifestyles we had before 1900, was hard and dirty, with life expectancy about 40 years of age, as we lived without the thousands of products from petroleum derivatives that we have today for medications, electronics, communications, and all forms of transportation.
We may be able to get along with less usage of the various transportation infrastructures, but the health and well-being of societies for life longevity and the ability to live in almost any weather condition is directly related to their access to all those products from petroleum derivatives for medications and medical equipment, and all the electronic and communications tools now being used worldwide.
As we weed ourselves from unrestrained use of fossil fuels, we’re seeing improved air quality around the world. We’ll need to continue lowering our demands from the transportation infrastructures and the leisure and entertainment industries to the best of their abilities to conserve oil for where its most needed for society, to make the thousands of products that support healthy lifestyles. Continuous worldwide development is exponentially increasing for medical devices and medications to support the health and longevity of people as well as pursuance of continued development of electronics and communication equipment to further support “virtual” working opportunities.
As California begins paying out massive amounts in unemployment and welfare benefits and continues to support the hiring of undocumented workers and has virtually eliminated the independent contractors, you can see how this house of cards is starting to crumble.
While residents adjust to changing lifestyles, Californians have huge pension obligations hovering over the heads of younger generations. To support those rich DEFINED employee benefit packages promised to previous state workers, CALPERS has one trillion dollars in unfunded liabilities to pay for those previous promises. WOW, one trillion dollars is almost five times the 220 billion-dollar States budget for 2020-21!
The Unions have no guilt feelings about DEFINED benefits, regardless of available funds to pay for those benefits, as the responsibility to pay for them will be on the backs of the younger generations that had no vote on their future financial responsibilities.
It’s amazing that “entitlement” to those promised DEFINED benefits, will drive the so called “entitled” to put the costs of those entitlements onto their kids!
State and local workers are promised generous DEFINED BENEFIT PENSION PROGRAMS that few private sector companies offer any longer because they are unaffordable. Making matters worse, thanks to complicit politicians, the state and local governments have failed to adequately fund these overly generous DEFINED benefit pensions.
Fully funding these pensions is unfair to current hard working taxpayers, so the “consensus” of the courts and current taxpayers is to defer the responsibilities for paying for these overly-generous “Defined retirement benefit” pension programs to younger generations, for them to pay higher taxes and work later into their lives to pay for the promises of previous generations, to subsidize older Americans.
It’s frustrating and appalling that the “courts” are saying that future generations will continue to be legally responsible for DEFINED BENEFIT PENSION PROGRAMS established by previous generations! Are the courts really supporting taxation on younger generations without representation?
The states’ choices on pensions will fall upon the millennials that have been given the responsibility to pay for retirement programs investment deficiencies. The government unions and their members have no guilt feelings about DEFINED retirement benefit programs, regardless of available funds to pay for those benefits, as the responsibility to pay for any deficiencies will be on the backs of younger generations, unable to vote today, that will bear the costs. A simple case of taxation on younger generations without their representation.