This week: California on the edge

Jim in San Francisco wrote in to say that Tennessee has the highest sales tax in the U.S. Not according to our research. California has the highest sales tax, 7.25%, and the highest income tax rate, 10.3%, for top-bracket earners. Thanks, Jim!

California is a market that has been out of touch for the better part of 30 years. Inflated home prices, land values, and taxes were the norm during those boom times. I remember the .com boom and bust where millionaires (and billionaires) were made overnight out of people who had never turned a profit in their business enterprise. Like any other downturn, this one will weed out the companies and ideas that aren’t viable, while hardening the good companies and good ideas for the next growth period. California as a business climate won’t die, but maybe some of the poor tax policies and backward socialist crap will. Nowhere else in the country has as poor a climate for business from the government side and yet so amazing and great a climate from the start-up/venture capital side. I have faith that the government will either a) pull it’s head out of it’s rear or b) that the VC’s will force their “elected” officials to do so.

Tennessee has the highest sales tax in the nation, not California. Who fact checks these things?

Californians would pay less tax, but the attempt to collect mineral severance taxes from oil production was shot down at the ballot. We could sure use the money now.

Way to jump from one point to another without providing any justification.

If you can’t write, be an editor.

I believe we should look to the world of biology/medicine to explain the new society we are entering. Biological processes (homo sapiens) have a life cycle that begins with continued, expansive growth. Then a mature phase is entered- called homeostasis.
We do not continue growing to 12 or 15 feet tall, weighing 600 ,700 pounds, etc.
All the body components quit growing and expanding. The body is running at optimum performance, replacing those few cells, in all integrated organs and systems that have died. We as organisms are on auto-pilot, on cruise control.
Have we entered economic/social homeostasis?? Isn’t it true we as a global organism, can repond to almost any component demand and produce the products to satisfy all those various demand??
The mature “maintenance” organism produces gastric enzymes for digestion, insulin for metabolism, red cells for Oxygen transport, etc. We don’t make larger bones to make red cells, or triple the size of the pancreas for continued Insulin production.
Is it true we don’t need more car builders, the existing car builders can satisfy any demand. ? Do we need more computer chip makers or can we make any amount we wish, in a short time, and deliver these quickly, to satisfy future demand.
The global economy now mimics the self contained body- all systems are communicating , response to stimuli is almost instantaneous, regardless of how different functions of the components may be.
Have an infection? The body responds , not by making bigger or more bones, but cranking up the production of white cells from existing bones.
We have to adapt to a world of maintenance of existing systems, not continued growth.
MDKovalik
736 Pointview Dr., Westerville, Ohio 43081

To take away even more from those who must work until they are 67 (increased taxes on private sector employees) and then give that money to those who only have to work until they are 52 (state government employees) is ridiculous.

California is just a leading indicator for U.S. The fundamental issue of U.S as well as california’s economy is that we are consuming more (products and services) than we produce. This changed us into a socialist wellfare state. The california and US govermnets spent more money on benefits and entitlements to feed clothe, house and treat the irresponsible by taxing the responsible. now there is an incentive for more and more people to have mysterious back pains and disabilities. Do a lousy job get fired and collect unemployment. sick ? walk to the next emergency room. Dont worry somebody will pay the bill. Dont have an SSN? good. so dont worry about collection and credit. So who ultimately pays for all these? The responsible individuals and businesses who pay INCOME TAX to both state and federal governments.
Yes it did work for many decades. But todays world has less restrictions for international trade than ever before. Unless our lazy butts gets to work, and at less wages and benefits and more hours than we are used to, and then save more and spend less, our economy will not have sustainable growth.
Dont tell me about the poor. The so called poor in this country should be taken on a trip to haiti or africa to see some real poor people. The poor in this country are poor, not because they were born poor, but they chose to remain poor. I know its not politically correct. But that is the truth.

Maybe Henry Thoreau was right when he said all bussines no matter what always becomes a downward spiral.

thumb up for Josh’s “globalization-at-any-cost”: if China grew from 1 to 10 while this country grew from 20 to 21 (out of the globalization), i would have hard time to honor these words: “yes, we did grow from 20 to 21, and it’s better than nothing”.

Well, I am not sure why the author goes from CA being on the edge to Peter Drucker and Globalization and his remarkable wife. Frankly, a measure of whether a news article is good or not is if it can get the reader to research further on some of the commentaries or ponder on some of the points highlighted. Going by that measure, this article got me thinking about Ms Drucker and I researched Ms Drucker on WIKI, so in that sense, you could have titled this article ” Drucker- on the edge”

Arizona-stifling hot 4 months of the year, Colorado-full of snow shoveling, Texas-Hot, Humid, and full of tornadoes. Those conditions happen year after year after year.

California-it’s the weather stupid. Along with the innovative culture not bound by the old rules. (Except for the Republican strongholds like Orange County)

Like Apple Inc, people are always are always sounding the death knell for California. Yet, we continue to reinvent and prosper, just like Doris Drucker recommends.

Well, Dave:

If you had seen this article earlier than you apparently did, you would have noticed that the stock symbol was incorrect. It has since been corrected.

My second paragraph was a reference to the currently popular trends of offshoring and bringing both skilled and unskilled workers into the country to deal with a supposed labor shortage. This was, and still is, considered to be a great management strategy, and I included it because of the content referring to Peter Drucker. I happen to think California is overpopulated, and that the entire country has lost too many good jobs thanks to globalization-at-any-cost.

The third paragraph was intended as sarcasm, and I really can’t believe anybody could miss that!

I’m sorry you didn’t see the relevance of these points to the article.

Josh – What do any of your comments have to do with anything in this article?
Your first point that the symbol for Apple is AAPL and not APPL is correct, but who are you correcting? I don’t see Apple referred to as APPL anywhere.
Your last comment of “We dodged that bullet with Arnold, floated some bonds, and all was well..” is totally off the wall. I like Arnold myself, but to claim “all was well” when the state has a huge financial problem just because you saved a few bucks on your vehicle license is baffling. You do know that we actually have to pay off those bonds that were floated, or do you? Also you may want to check the latest on the budget bill to be sure the license fee hasn’t been raised.

Since I moved to California in 1975, there has never been a time when the Republicans were not raising alarms about taxes driving businesses out of the state and often simultaneously claiming that businesses needed more people from other states or countries to supply their needs. In all that time the population and employment increases have been huge. Silicon valley exploded in terms of new businesses, e.g., Apple, Google, Cisco.
Of course an economic downturn affecting the entire country and most of the world is a great opportunity to raise the alarm again, not that the Republicans ever need a reason to repeat their tired scare tactics.

First, I would say that the symbol for Apple is AAPL, not APPL.

Second, I would say that “exporting jobs and importing workers” has proven to be a very poor management decision, as innovative as it may once have been.

Thirdly, I would say that I’m sure glad we got rid of Governor Gray Davis. He was actually going to raise our vehicle licensing fee! We dodged that bullet with Arnold, floated some bonds, and all was well…