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California Considers Flat Tax and Completely Eliminating Welfare

Don't Tase Me Bro

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Could California become the first state in the nation to do away with welfare?

That doomsday scenario is on the table as lawmakers wrestle with a staggering $24.3 billion budget deficit.

County welfare directors are "in shock" at the very idea of getting rid of CalWORKs, which has been widely viewed as one of the most successful social programs in the state's history, said Bruce Wagstaff, director of the Department of Human Assistance in Sacramento.

"It's difficult to come up with the right adjective to react to this," Wagstaff said. "It would be devastating to the people we serve."

McClatchy

I guess the people they serve will just have to try harder to take care of themselves like they should be in the first place. As for those that literally can't because of a true disability or condition, the Feds are still there to provide support and their families will have to step up their own support. California's astronomical debt is partly due to their overly generous spending on the welfare state in the first place.

Could the flat tax come to California?

Gov. Arnold Schwarzenegger said today that he would like to see such “radical” proposals come out of a commission now studying an overhaul of the state’s tax system. The governor told the editorial board of the Sacramento Bee that he hoped the commission would not be afraid to propose something like “a 15% straight tax.”

“That’s the kind of radical, daring kind of a proposal that I want to see on the table so we can look at it and say, ‘Oh, let’s study this, maybe that is the way to go,’ ” Schwarzenegger said during the discussion, which was webcast.

The current system, based on highly unstable income tax revenue that fluctuates with the economy, “doesn’t work,” Schwarzenegger said.

Los Angeles Times

A flat tax isn't a bad idea either. Several of the Eastern Bloc nations that were once part of the Soviet Union or controlled by Communist governments have gone to a flat tax and their economies have boomed ever since. 15% seems rather high, however, for a state, so I would have to think this flat tax would replace more than just the state income tax.

One thing is for certain. California can no longer function the way it is today and the people there had better get it through their heads. Ironically, this budget crisis might be the best that ever happened to them. I do have my doubts, however, that either of the above will actually come to fruition.
 
A flat tax isn't a bad idea either. Several of the Eastern Bloc nations that were once part of the Soviet Union or controlled by Communist governments have gone to a flat tax and their economies have boomed ever since.

LOL you should stop listening to Forbes and his crew. Flat tax is a horrible idea and will only benefit the rich.. who funny enough are the ones proposing such idiotic policy. Do the math and you will understand how flat tax hurts the low wage earners much more than it does the multi millionaires proposing such policies.

Flat tax nations in Europe are the worst off at the moment. Their whole economy is at near collapse due to lack of funds and their growth has all but vanished due to the drying up of credit. Some of those very countries are talking up to a 25% drop in GDP because of the crisis.

As for completely eliminate welfare.. move to Somalia and see how that is. Countries without any safety net rank as some of the poorest and worst off on the planet. It is a egotists dream, and all are basicly ruled by the gun and the rich. Is that how you vision your country?
 
Eliminating CalWORKS would be a shock to the system that would surpass even the Great Depression.

Assuming Los Angeles does not erupt in mass riots as a result, once that shock passes it could be the best thing to happen to California economically.

The flat tax is an outstanding concept--one I've been in favor of at the national level for years.

If these ideas become law, then kudos to California for not letting a good budget crisis go to waste.
 
I am proud that our country helps citizens who are having a hard time.

But all my life I have witnessed the devastation to people and families caused by welfare addiction. Isn't that perfectly clear to everybody by now?

I don't support fair tax. There are better ways to collect taxes.
 
Flat tax nations in Europe are the worst off at the moment. Their whole economy is at near collapse due to lack of funds and their growth has all but vanished due to the drying up of credit. Some of those very countries are talking up to a 25% drop in GDP because of the crisis.
The countries of Eastern Europe aren't in economic straits because of the flat tax, but because their debt is euro-denominated while their local currencies have plunged against the Euro.
 
The countries of Eastern Europe aren't in economic straits because of the flat tax, but because their debt is euro-denominated while their local currencies have plunged against the Euro.

And flat tax was not the reason they were having a huge economic expansion.

It was the billions in loans from the rest of Europe, and now that the credit markets are fubared, then they are having to repay said loans instead of refinancing them and getting new loans.

This means countries with flat tax are now getting hit by a double wammy so to say. Not only are their relative tax income much lower compared to a progressive tax system, but they are now forced to use what they have to repay said loans and that leaves very little for things like wages for their employees and paying the lighting bill.

As for your swipe against the Euro.. what should they have done.. gotten loans in Dollars.. that would have been reallllly smart too right? Not that it would have mattered since it was the collapse of the credit market that ultimately got them into the huge trouble and not what currency they loaned in.
 
This means countries with flat tax are now getting hit by a double wammy so to say. Not only are their relative tax income much lower compared to a progressive tax system, but they are now forced to use what they have to repay said loans and that leaves very little for things like wages for their employees and paying the lighting bill.
:confused::confused:

There's just a single whammy--the staggering amount of foreign euro-denominated debt.

As for your swipe against the Euro.. what should they have done.. gotten loans in Dollars.. that would have been reallllly smart too right? Not that it would have mattered since it was the collapse of the credit market that ultimately got them into the huge trouble and not what currency they loaned in.
Get a grip. There's no swipe against the euro here. It's simple fact.

Eastern Europe's foreign debt is denominated in euros (or occasionally Swiss francs), while the local currencies have fallen relative to the Euro, which amounts to an increase in the overall debt. In countries like Latvia, which are in ERM II and peg their currency to a narrow trading band to the Euro, they are being slowly ground down by the various fiscal measures necessary to prop up their currency when the organic economic forces are pushing the currency down. Either way, the end result is the same: foreign-denominated debt is turning into a huge and nearly crippling burden for Eastern Europe.
 
I've not studied much on "flat tax" or "fair tax" or whatever it's called. Mainly because I just don't see it having a realistic chance at ever seeing the light of day. Not because it is or isn't a good idea, but because the IRS is too much of an institution and will probably not go away in my life time.

Wouldn't it generate less revenue for government? And I'm not saying this is bad because it will force government to cut waste, but couldn't it also threaten to cripple many programs? Especially during troubled times when people just aren't buying?

And I don't think California will ever just turn off welfare. As has been pointed out, the state would erupt in riots. It would have to be a multi-year, progressive reduction in benefits. If even then. I think you see a turnover in legislators who would fight the plan.
 
:confused::confused:

There's just a single whammy--the staggering amount of foreign euro-denominated debt.


Get a grip. There's no swipe against the euro here. It's simple fact.

Eastern Europe's foreign debt is denominated in euros (or occasionally Swiss francs), while the local currencies have fallen relative to the Euro, which amounts to an increase in the overall debt. In countries like Latvia, which are in ERM II and peg their currency to a narrow trading band to the Euro, they are being slowly ground down by the various fiscal measures necessary to prop up their currency when the organic economic forces are pushing the currency down. Either way, the end result is the same: foreign-denominated debt is turning into a huge and nearly crippling burden for Eastern Europe.

If it is not a swipe against the euro, then why mention it at all? It has zero relevance if the debt is in dollars, swiss franc, yen, bananas or hot latin strippers. The fact remains regardless of the currency they borrowed in, they are now screwed because of the credit crisis. They cant get new loans or refinance their existing loans regardless if it is Euros, Dollars or latin strippers.

They will have to draw down on their currency reserves to pay back their debts and that is gonna hurt their domestic spending because they cant buy crap from other countries. This in turn means that they are much more dependant on tax income to finance even basic things, and since they have a flat tax system in an economy that is flat-lining, then yes it is a double whammy.
 
LOL you should stop listening to Forbes and his crew. Flat tax is a horrible idea and will only benefit the rich.. who funny enough are the ones proposing such idiotic policy. Do the math and you will understand how flat tax hurts the low wage earners much more than it does the multi millionaires proposing such policies.

Flat tax nations in Europe are the worst off at the moment. Their whole economy is at near collapse due to lack of funds and their growth has all but vanished due to the drying up of credit. Some of those very countries are talking up to a 25% drop in GDP because of the crisis.

As for completely eliminate welfare.. move to Somalia and see how that is. Countries without any safety net rank as some of the poorest and worst off on the planet. It is a egotists dream, and all are basicly ruled by the gun and the rich. Is that how you vision your country?

Do you have any links or FACTS to back up your assertions?
 
I guess the people they serve will just have to try harder to take care of themselves like they should be in the first place. As for those that literally can't because of a true disability or condition, the Feds are still there to provide support and their families will have to step up their own support. California's astronomical debt is partly due to their overly generous spending on the welfare state in the first place.

A flat tax isn't a bad idea either. Several of the Eastern Bloc nations that were once part of the Soviet Union or controlled by Communist governments have gone to a flat tax and their economies have boomed ever since. 15% seems rather high, however, for a state, so I would have to think this flat tax would replace more than just the state income tax.

One thing is for certain. California can no longer function the way it is today and the people there had better get it through their heads. Ironically, this budget crisis might be the best that ever happened to them. I do have my doubts, however, that either of the above will actually come to fruition.

I would not hold my breath that the idiots who run California Government will pass a flat tax nor that they will not continue their idiotic partisan philosophy of failures.
 
I've not studied much on "flat tax" or "fair tax" or whatever it's called. Mainly because I just don't see it having a realistic chance at ever seeing the light of day. Not because it is or isn't a good idea, but because the IRS is too much of an institution and will probably not go away in my life time.
I'd read the Fair Tax book anyway, whether you agree with the premise or not it is a good read, I agree with you that it has little chance of being implemented for two reasons, one, as you mentioned the IRS doesn't want to give up it's power, and also the CPA lobby enjoys the easy way of "big hitting" around April 15, i.e., the bulk of their incomes comes between Jan.-Apr. with late filers allowing them to basically coast the rest of the year, with a flat tax these CPAs would actually have to find employment with companies and *gasp* work year round like the rest of us. I'll say this though, the fair tax is so simple it's brilliant.

Wouldn't it generate less revenue for government? And I'm not saying this is bad because it will force government to cut waste, but couldn't it also threaten to cripple many programs? Especially during troubled times when people just aren't buying?
The idea is to implement the tax first, it is weighted to provide sufficient operating funds for existing programs with the idea of weening the government off of spending and waste in an economically viable timeframe, the concept involves a trimming effect on overspending, forcing programs to lean down through the natural progression of legislative law, not by shock and awe economic leveraging

And I don't think California will ever just turn off welfare. As has been pointed out, the state would erupt in riots.
Most fair minded conservatives would state that we have too many entitlements, but we have so much at the moment that immediate elimination would damage the economy past the benefit of the reductions, many of us advocate a strategic roll back of programs to what is necessary, but to eliminate the fat, we would use a scalpel, not a hatchet.
It would have to be a multi-year, progressive reduction in benefits. If even then. I think you see a turnover in legislators who would fight the plan.
I agree, but I would also commend those that put their position at risk to do what needs to be done towards solvency.
 
Do you have any links or FACTS to back up your assertions?

Lets see, as I guess it is the highlighted bits you disagree with.

Flat tax is a horrible idea and will only benefit the rich

Basic maths shows this.

3 people.

Person 1 earns 10 dollars a year
Person 2 earns 100 dollars a year
Person 3 earns 10000 dollars a year.

Flat tax system of say 20% since you yanks love low numbers.

Person 1 pays 2 dollars in tax, leaving 8 dollars to live on
Person 2 pays 20 dollars in tax, leaving 80 dollars to live on
Person 3 pays 2000 dollars in tax, leaving 8000 dollars to live on.

Which person would have a more "comfortable" life?

In a proportional system it could be like this. 50 dollar deductible. First 1000 dollars is taxed by 10%, 1001 to 5000 is taxed 20% and anything over 5000 is taxed by 30%.

Person 1 earns 10 dollars a year but since there is a 50 dollar a year deductible he will pay no tax. 10 dollars to live on.
Person 2 earns 100 dollars a year, has a 50 dollar deductible leaving only the 50 dollars to be taxed by 10% which is a tax of 5 dollars. That gives 95 dollars to live on.
Person 3 earns 10000 dollars a year, has a 50 dollar deductible. the 10000 dollars are taxed the following. The first 1000 by 10% which is 100 dollars, then next 4000 is taxed by 20% which is 800 dollars and the remaining income of 5000 dollars is taxed by 30% which is 1500 dollars. This is a grand total of 2350 dollars in tax (with the 50 dollar deductible.. even though it dont matter jack for this person). That will leave the person 7650 dollars to live off.. ohh poor rich people have less to live off.. boo hoo... will have to skip one weekly botox treatment. :roll:

The tax income from the flat tax is 2022 dollars. The tax income from the progressive tax system is 2455 dollars. The tax burden on person 1 and 2 is considerably lower where as the burden on person 3 is increased but then again said person can afford it.

Now I know tax systems are never so simple, but the whole idea of a flat tax system is to make it simple with no deductions. The drop in revenue for the government will be considerable and the burden on low and middle class earners will increase. The rich will get a lower tax burden and considering they already have money to avoid paying their full share of tax under the present system (regardless of country) then well. My maths above might be off a bit (cant be bothered to check it tbh), but the idea behind it is right.

Flat tax nations in Europe are the worst off at the moment

Lets see. The list of flat tax nations in Europe are the following.

Bosnia, Bulgaria, Albania, Czech Republic, Estonia, Iceland, Latvia, Lithuania, Macedonia, Montenegro, Romania, Russia, Serbia, Slovakia, Ukraine.

Now what do we have there. Iceland has had to be bailed out and expects 20+% economic contraction. The Baltic states have the largest economic downturn in Europe proper and are on the verge of default. They have also received bailouts. Serbia and Romania got IMF bail-out money. Albania has always been a basket case and remains so. Ukraine cant pay its gas bills and was one of the first to get a bail-out from the IMF. If you dont believe me, google it.... for Ukraine

Ukraine Gets an IMF Bailout - BusinessWeek

That leaves the Czech Republic, Slovakia, Russia, Macedonia, Montenegro and Bosnia as "shining examples" right? well...

If you google Russia and economic crisis, then you will probably be shocked....

The Czech Republic is in a relative good economic situation compared to the rest. However even here the crisis has hit hard. Same goes for Slovakia, where the crisis has hit even harder. But compared to the rest yea these have a great economy....

The other nations.. get real, they barely have economies to begin with.

It is a egotists dream, and all are basicly ruled by the gun and the rich

Not sure what you want here soo.
 
If it is not a swipe against the euro, then why mention it at all? It has zero relevance if the debt is in dollars, swiss franc, yen, bananas or hot latin strippers. The fact remains regardless of the currency they borrowed in, they are now screwed because of the credit crisis. They cant get new loans or refinance their existing loans regardless if it is Euros, Dollars or latin strippers.
First off, where can I get some debt denominated in Latin Strippers--sounds like my kind of currency!:2razz:

Second, the relevance is the steep increase in the quantity of debt in local currency terms due to the plunging currency valuations. When you borrow in Euros when your currency is trading at 2:1, then your currency drops to 4:1, you've just seen your debt load double. Only way to avoid that trap would be if GDP doubled at the same time, so that the relative debt load remained the same. In a worldwide economic contraction, that obviously is not happening.

The reason I mention the Euros should be patently obvious: that is the denomination of the debt.

There is another reason for mentioning the Euro: the European banks and countries holding the paper on all this debt are jammed up by this as well, for the simple reason that a default by Eastern Europe will unleash a banking crisis in Germany and Austria that will make the Anglo-American travails seem mild by comparison.

They will have to draw down on their currency reserves to pay back their debts and that is gonna hurt their domestic spending because they cant buy crap from other countries. This in turn means that they are much more dependant on tax income to finance even basic things, and since they have a flat tax system in an economy that is flat-lining, then yes it is a double whammy.
Ok, so you're just miffed that I dared mention the Euro and are spewing because you don't like the flat tax. Economics and finance are of no relevance to your position.

Guess that bring this little non-discussion to a close. Moving right along.....
 
As for completely eliminate welfare.. move to Somalia and see how that is. Countries without any safety net rank as some of the poorest and worst off on the planet.
And yet, before the saftey net, the US was the richest and best off in world. How is that?

It is a egotists dream, and all are basicly ruled by the gun and the rich.
False premise -- eliminating the welfare state in no way eliminates all the other laws.
 
It all comes back to this argument. PeteEU is arguing that because the nations that have Flat Tax are doing the worst, that Flat Tax must be the reason. Unfortunately for PeteEU, you can't just demonstrate correlation and imply causation. He needs to prove that the Flat Tax is the reason for those nations doing so poorly. Until he does that, all you need to say is "Post Hoc Ergo Propter Hoc."
 
It all comes back to this argument. PeteEU is arguing that because the nations that have Flat Tax are doing the worst, that Flat Tax must be the reason. Unfortunately for PeteEU, you can't just demonstrate correlation and imply causation. He needs to prove that the Flat Tax is the reason for those nations doing so poorly. Until he does that, all you need to say is "Post Hoc Ergo Propter Hoc."

You have to understand that when Liberal Socialists debate, reality and FACTS seldom enter into their false assertions.

After all, being a Liberal Socialist is quite easy; you just have to SAY you care and redefine the meaning of words. :rofl
 
California cant elimate welfare. The Democrats voter base would dry up, along with the Mexican vote.

Although, it would be sweet poetic justice to hear Democrats have to come to terms with their ridiculous notion that the government can provide all aspects of daily life on the taxpayer's dime. For them to totally reject that, would be a day of revolution in this country.

80 years of welfare reform, down the tubes and finally admitted to being worthless and bad policy. That would be a sweet day. :thumbs:
 
California cant elimate welfare. The Democrats voter base would dry up, along with the Mexican vote.

People just don't realize what's best for them, and it's a shame. People vote themselves into poverty.
 
If somehow this passed, I would wallow in the irony for months. California of all places. LOL

What's next? Illinois going to ban worker's unions?
 
This debate reminds me about my story about the goals of the group in my progressive income taxes thread (which I may not continue working in for BS reasons...)

Simillar to what I would tell people at doors, I think we should remember that there is not just two options here.

We don't just need to have a flat income tax and cut welfare spending, or just increase taxes in a progressive way.

How about California cuts services and increases all of its taxes in a non-progressive way?

This radical plan for this thread only targets the poor when instead it should be a "shared sacrifice" I like to say to people.
 
HOLY ****! Holy ****ing ****! California, gettign rid of welfare? Where the **** did that come from? California? THE California? The biggest whining hippy-liberal state in the union? THAT california? What the ****. If it wasn't for the fact I think that's a good idea, that'd scare the ****ing **** outta me.

Holy CRAP! Who the hell could have seen this coming?

1920 Conservativism is making a come back, and oh what a come back it is. California ya'll. It's in ****ING CALIFORNIA. Holy crap!
 
California cant elimate welfare. The Democrats voter base would dry up, along with the Mexican vote.

Although, it would be sweet poetic justice to hear Democrats have to come to terms with their ridiculous notion that the government can provide all aspects of daily life on the taxpayer's dime. For them to totally reject that, would be a day of revolution in this country.

80 years of welfare reform, down the tubes and finally admitted to being worthless and bad policy. That would be a sweet day. :thumbs:

This pretty much sums up the FACTS; great commentary.
 
how is a flat tax bad if the necessities of life are exempt
so the poor have to pay more for their cigarettes, 40's & McDonalds
is that really so bad


sorry if this has already beeen discussed, but i could not deal iwht PeteEU anymore than the first page before responding. i am runnig out of hair to rip out of my head
 
HOLY ****! Holy ****ing ****! California, gettign rid of welfare? Where the **** did that come from? California? THE California? The biggest whining hippy-liberal state in the union? THAT california? What the ****. If it wasn't for the fact I think that's a good idea, that'd scare the ****ing **** outta me.

Holy CRAP! Who the hell could have seen this coming?

1920 Conservativism is making a come back, and oh what a come back it is. California ya'll. It's in ****ING CALIFORNIA. Holy crap!
you might be in the running for the most censorship in one post
and i like it :thumbs:
 
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