Thursday, June 08, 2006

It's your money

Now that the primary election is over, perhaps the candidates for the General Election in November will give some serious thought to our state’s income and spending. Our billion-dollar deficit is not from a lack of income (tax revenue) but from run-away spending.

As an example, according to the Franchise Tax Board, revenues collected in April (taxes) were 40 percent higher than just a year ago. Revenue has never been higher but the state continues to spend more money than it takes in. How long will that continue?

Area residents are doing their part in contributing to the coffers of the Franchise Tax Board. The median income for El Dorado County finished 2005 with $42,819 and was the fifth highest in California. Placer County ranked just under El Dorado. The median income for 2005 was $41,301, while Sacramento County placed 18th highest in the state income category with a median of $34,772. The state’s median finished at $33,223.

I presume that the Franchise Tax Board calculates the median income by the compilations of all tax returns of any an all taxpayers. The median (not the average) is the point where half the taxpayers are making more and half less.

Chris Thornberg, economist for UCLA has never seen a good growth number that he could not spin into a negative. After reviewing the phenomenal income gains last year he said in a statement “The housing market provided most of the economic oomph in California after the tech bubble burst. That has begun changing in the past year or so. The softening of the housing market will likely be a drag on income growth although it probably won’t cause a recession.” What a drag!


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