California

There is a line from a Country/Western song, “All the gold in California Is in the bank in the middle of Beverly Hills” and it referenced the money from Hollywood stars but there is a new bank today and that is located in Silicon Valley. Nowhere in the country is the gap between the rich and the poor more evident than in California. They have a higher percentage of people in poverty than any state and they are loaded with high tech millionaires. 50% of the States income tax revenue is collected from one percent of its citizens. There are 20 million people working in the state and 200,000 of them pay one-half of the taxes. Now that is even more progressive than the country as a whole where the top 1% pays 45% of the taxes. Total personal income in California is 2.4 trillion and 20% of this goes to the top one percent. They are already paying 60% of their income to state and federal income tax so if we take the remaining 40% and give that to the 20 million who are working then each would receive $9600. Those top one percenters can live off of their saving but they will be less likely to continue to work so next year everyone will be back where they are now. Pre-tax cash incomes in California have been diverging for decades, and economic cycles have reinforced the longer-term trend. Top incomes are 40 percent higher than they were in 1980, while middle incomes are only 5 percent higher and low incomes are 19 percent lower. While redistributing income does not have that much effect the redistribution of wealth would be significant. The top guy at Amazon is worth 120 billion and if that were given to the 20 million working people, they would each get $6,000. It would of interest to see a poll asking if the government should take that and give it to the poor. After all isn’t one billion enough? There are 124 billionaires living in California.