The Golden State’s War on Itself

Interesting.<p>Not too long ago I found out that not only does California have incredibly high state income taxes, but it also has really high state capital gains taxes. It actually amazes me that silicon valley has thrived under those burdens which leads me to ask two very important questions:<p>1. Why hasn't the high taxes driven people out of Silicon Valley (and will it?)<p>2. How is California broke?<p>I come from Florida and in Florida, there are barely no state taxes at all because it's all on tourism. Somehow California has these insanely high taxes and still can't pay any bills. Other than blaming illegal immigrants (a dubious politically motivated response), I've never really gotten a straight up answer on what makes California and Florida so different.

My instinct is to say that this is another case of correlation not implying causation. On the surface, we have two facts:<p>* California has a huge budget deficit<p>* California is declining economically<p>I don't doubt that these two facts are true. Nor do I doubt that both facts affect each other. However, California is one of (if not <i>the</i>) largest economies in the US. I seriously doubt the situation is this simple. To place this solely at the feet of the state's progressive politics is a bit partisan. To me, this reads like a set of conservative talking points dressed up as an intellectual policy paper.<p>EDIT: Not coincidentally, City Journal is published by a conservative think-tank: <a href="http://en.wikipedia.org/wiki/Manhattan_Institute" rel="nofollow">http://en.wikipedia.org/wiki/Manhattan_Institute</a>

"Recently, though, the dream has been evaporating. Between 2003 and 2007, California state and local government spending grew 31 percent, even as the state’s population grew just 5 percent."<p>This is the most shocking line from the article. How did they let costs balloon so badly?

This was submitted earlier today already wasn't it? <a href="http://news.ycombinator.com/item?id=1588934" rel="nofollow">http://news.ycombinator.com/item?id=1588934</a>

I classify as right-wing biased propaganda any article dealing with California's economics and politics that doesn't mention Prop 13.