May 31, 2008
What can be done to help California and Nations Budget Crisis?
Our nation has been facing serious budget issues, and because California is one of the largest economies in the nation, our state is experiencing an exceptionally hard time. For many of us, it has become a delicate task to make ends meet. Even the everyday things, such as driving our cars to work and making sure there's enough food on the table, have become a bit of a juggling act. Many of the problems have been caused by our very own state and national governments paying too much attention to special interest groups instead of the taking care of the important issues.
The three biggest problems facing the United States government and California in particular:
1. Over-spending. Government spending is out of control, and we simply cannot sustain being in the negative for so long without serious consequences. It's like a bridge that has a crack in the support beams. Over time, the crack will get bigger and bigger, and eventually corrupt the safety of the support beams, causing the bridge to collapse.
2. Over-regulation and misappropriation of funds. For example, the state of California spends approximately 39% of their budget on education. If the Department of Education is allocated two-hundred million dollars this year, educators and administrators will find a way to spend every last penny of it because they know they won't get that same amount next year if they can do it on less. It's a self-defeating system in which they have to spend it or lose it.
One of the ways the state raises money for the education budget is through the state lottery. The lottery is a renewable source of income, and the money brought in from it is supposed to help supplement the education budget, but that's not what's happening. If the lottery brings in one hundred million dollars, the legislature will take that one hundred million dollars out of the original education budget instead of adding to it. What a system.
Oftentimes, money is spent in areas it really does not need to be spent. There are a lot of bureaucrats who drive state-issued vehicles to and from work or use them on their own time, paid for by the state. Most of us drive our own personal vehicles to work, which is what these bureaucrats should be doing as well. State-issued vehicles should really be limited to on-the-job use. What makes them different?
This is just one example of misappropriation of funds supplied by an inefficient administration.
Another way money is misused is through the millions of dollars spent each year for printing election materials in languages other than English. As a U.S. citizen, you are entitled the right to vote. However, you should be able to read and write the national language in order to do so. It is the responsibility of every citizen to assimilate to the national language. It is important to maintain and hold onto your culture. That's what makes this country great, but the national language of United States is English. If we were voting in Japan or France or Mexico, we would be required to read and write in those nations' languages in order to be able to vote in their countries. We should require the same of our own voters instead of wasting millions of dollars on voter materials in other languages. This is just another abusive spending practice created by politicians to gain more votes. This boondoggle of a system only serves to help bankrupt our economy.
The California Freeway system is an area that wastes millions of dollars in energy costs and costs associated with car accidents, injuries, and insurance claims for damages due to the carpool lanes. The carpool lanes, especially in Southern California, are a tremendous problem for many of us. Countless accidents occur each and every day because the carpool lanes are poorly designed. It's hard to get into or out of them without causing some sort of traffic jam or accident, which ends up costing Californians millions of dollars. These carpool lanes would be much more efficiently used if they were opened for use by everyone during non-peak traffic hours. This would help cut down on the harmful emissions released from idling cars, which burn more fuel (and we could all stand to spend less on fuel). Opening the carpool lanes would also generate a more free-flowing freeway and help eliminate the already overwhelming traffic congestion.
3. Not enough financial cash flow. Instead of borrowing from Peter to pay Paul, we need to be able to raise revenue to support the services we need in order to live or we need to reduce spending in order to maintain an equilibrium. This can be done by raising taxes or finding ways to generate more renewable revenue sources. Raising taxes is generally a politician's first solution to raise the money to pay for services. This way, they don't have to think outside the box. So, how can the state of California (or the federal government for that matter) raise revenue without massive tax increases, and at the same time make already-established taxes be more productive for the economy? That's the sixty-four million dollar question.
Believe it or not, some taxes actually create a deterioration of revenue. As an example, 80% of income producing properties owners are over the age of 50, and many of these owners decide not to sell their properties because of the high capital gains taxes, which currently sit at 15% for the state of California and 15% for the federal government. These landlords just hold onto their investment properties because of the high amount of taxation involved with cashing out. The bad news is that capital gains taxes will double in the near future, making it even less likely that the state will be able to build revenue.
If the government actually lowered the capital gains tax to about 5%, however, it would be much more beneficial for the state. If, for example, 100,000 income property owners elected to sell and cash out under the 5% tax rate, and the average taxable gain was $200,000, that would generate $10,000 to the state per owner for an overall one billion dollar gain. It would also generate more revenue from property taxes, as the buyers of those 100,000 properties would now being paying at a higher tax rate than the previous owners due to the appreciated sales prices. That's a lot of money the state could put towards something more useful, without have to raise any taxes at all. It would actually create a renewable revenue source that could create a vast amount of money for the state on an on-going basis.
Another revenue-building resource can be found in the gambling industry. The amount of money gambling produces is tremendous. If taxes were raised on gaming establishments at 20 cents for every dollar collected, it would generate enough cash flow to support a functional, substantial health care system in not just California but all of the United States. The gaming establishments could then reduce the payouts to maintain a profit, meaning that the house controls their own profit margin. It would be foolish for the State of California not to take an additional share of taxation from the gaming industry to help pay for the many services that are in desperate need of financial support.
The actions of our state and national governments, political leaders, and special interest groups have almost bankrupt our country's economy.
When a government cannot pay for itself, it robs our nation of the spirit of democracy and leaves an open door to revolt and revolution. As a society, when we cannot afford the basic necessities such as food, clothing, fuel for our cars, shelter for our children, or basic medical care, then the system has run out of control and needs to be changed. It's time to elect new leaders and hold them accountable to the laws they make, the laws that we have to live with.
Carlos R. Arvizu, Sr.
Pronounced R.V.Zoo
TheDon1950@aol.com
