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Thread: California Considers Flat Tax and Completely Eliminating Welfare

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    California Considers Flat Tax and Completely Eliminating Welfare

    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.

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    Re: California Considers Flat Tax and Completely Eliminating Welfare

    Quote Originally Posted by Don't Tase Me Bro View Post

    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?
    PeteEU

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    Re: California Considers Flat Tax and Completely Eliminating Welfare

    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.

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    Re: California Considers Flat Tax and Completely Eliminating Welfare

    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.

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    Re: California Considers Flat Tax and Completely Eliminating Welfare

    Quote Originally Posted by PeteEU View Post
    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.

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    Re: California Considers Flat Tax and Completely Eliminating Welfare

    Quote Originally Posted by celticlord View Post
    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.
    PeteEU

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    Re: California Considers Flat Tax and Completely Eliminating Welfare

    Quote Originally Posted by PeteEU View Post
    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.


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

    Quote Originally Posted by PeteEU View Post
    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.

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    Re: California Considers Flat Tax and Completely Eliminating Welfare

    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.
    *insert profound statement here*

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    Re: California Considers Flat Tax and Completely Eliminating Welfare

    Quote Originally Posted by celticlord View Post


    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.
    PeteEU

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    Re: California Considers Flat Tax and Completely Eliminating Welfare

    Quote Originally Posted by PeteEU View Post
    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?

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