<p>
[quote]
1)High CA (income) taxes chase wealthy people away to more forgiving states. The Laffer Curve shows that an increase in taxation rate doesn't necessarily lead to an increase in tax revenue.
[/quote]
</p>
<p>Yes, but the real issue is which side of the Laffer Curve are we on? There is no doubt that at some marginal tax rate, increasing the tax rate further will indeed shrink tax revenue as high earners decide to simply stop working. Yet the fact is, California experienced one heck of a boom during the 1990's when Clinton had raised taxes on the top earners. Note, I'm not just talking about increases in capital gains (for which taxes were cut), but also in incomes, especially among the rich. I remember a lot of very very well-paid techies who worked very hard and made a lot of income despite increased marginal tax rates. </p>
<p>Don't get me wrong. I hate taxes. I too would like tax cuts. But not because I think we are actually in serious danger of hitting the Laffer tipping point. </p>
<p>
[quote]
CA imports and protects illegal aliens who contribute little to no tax revenue and suck up a lot of resources: ER as primary care, ESL classes with crappy results, high rates of teen pregnancy and illegitimacy.
[/quote]
</p>
<p>It's actually not clear whether the illegals actually increase or decrease tax revenue overall. True, they do consume government resources. But they also expand the economy, hence boosting tax revenue indirectly. They also boost tax revenue directly in that, according to the CBO, 50-75% of illegals are paying income taxes (because they use fake SSN's from with taxes are withheld). Furthermore, many illegals are afraid to utilize too many government services because they fear deportation. Lipman (2006) has shown that illegals as a whole contribute more in tax revenue than they consume. </p>
<p>SSRN-Taxing</a> Undocumented Immigrants: Separate, Unequal and Without Representation by Francine Lipman</p>
<p>Personally, I think a far more serious drain on government revenue are the Americans who consume government resources, i.e. those on chronic welfare. Or the hard-core criminals who need to be jailed. </p>
<p>
[quote]
3)CA played a part contributing to some of the largest and most devastating parts of the sub-prime mess in places like Stockton and San Bernadino in a time when ads were being run in Spanish by mortgage lenders specifically appealing to people without papers.
[/quote]
</p>
<p>It's not at all clear that illegals (or Hispanics in general) have a higher default/foreclosure rate, adjusted for income levels, compared to other homeowner groups. In fact, I strongly suspect that the rate may actually be *lower<a href="again,%20adjusted%20for%20income">/i</a>. Let's be perfectly honest. The illegals come here to work. They frankly have a better work ethic than many Americans do.</p>