For the second year in a row, California is the most impoverished state in the nation, according to the latest statistics from Obama’s Census Bureau. And it is no coincidence that the poor have become poorer in California in the last two years, since enactment of Jerry Brown’s and the liberal Democrats’ Proposition 30 tax hikes in 2012.
More than 6.2 million Californians live in poverty today. That is an appalling fact, given all the opportunity in this state. But that opportunity, which can result in a $271,000 annual salary for a maintenance yard foreman in Oakland who is a member of the public employee union at the Bay Area Rapid Transit District, is not making its way to California’s poorest. And in fact, the taxes the liberal Democrats are inflicting on our state are having a devastating affect on poor families, and making them poorer.
I attended a conference at Pepperdine Law School last weekend and an economist from Stanford, Joseph Bankman, who testified in Sacramento last year in support of hiking the gasoline tax to the highest level of any state in the nation, admitted that transportation costs for some of the poorest families in our Central Valley can amount to 10% of their income. That fact did not stop Bankman from favoring the tax hike, but that tax can surely be seen as pushing California’s neediest in the wrong direction financially, and even further into poverty.
Proposition 30 raised the state income tax to the highest level in the nation, 13.3%. But of course poor people do not pay much in state income taxes, because they don’t have much income. But what precious money they do have can be eaten up by consumption taxes. And Proposition 30 didn’t just raise income taxes, it raised the state sales tax to the highest level in the nation. Like the gas tax, the state sales tax is factored into the methodology by which the Census Bureau determines the cost of living in California. The higher the cost of living is made by government actions, the more negative financial impacts to the less fortunate. With the highest sales tax in the nation, highest tax on gasoline at the pump, high state taxes on residential power consumption, state taxes on telephones and cells, a new internet transaction fee, utility taxes and the top “sin” taxes on alcohol and tobacco, the poor in California are simply being squashed by state government and kept from emerging from poverty by California’s liberal Democrats in control in Sacramento, who are the ones responsible for pushing tens of thousand more below the poverty rate.
President Lyndon B. Johnson declared a “War on Poverty” 50 years. Government has spent trillions of dollars since then combating poverty. That War has had few successes. But in 1964 when LBJ announced his program, the national poverty rate was 20%. Today, the poverty rate nationwide is 16%. But in California, aided by Proposition 30’s high sales tax and all the other taxes Sacramento has levied on all citizens of the state, including the poor, the poverty rate is a whopping 23.8%. The best thing Jerry Brown and his allies could do for this state if they care about poverty, is to lower taxes. Do you think they will?