For the most liberal state on the “left coast” to recall their Democratic governor and replace him with a Republican, something must have gone quite wrong. What went wrong was that Gray Davis was utterly successful in fulfilling his liberal agenda.
Caving to the labor unions, he made businesses with as few as 20 workers choose between providing health insurance and more taxes. He increased the minimum wage. He forced large workmen’s compensation packages. He threw lots of money at the teachers’ union: California spends over $9,000 per student.
And submitting to the environmental lobby, he passed stringent vehicle emissions standards that increased the consumer’s price for vehicles.
Now these programs are beneficial, and certainly a family with an injured parent will benefit from lush worker’s comp. The problem is that it’s a very costly benefit, and everybody in California paid for it: California was among the top two states in the nation in both income and sales tax, yet still had a $40 billion deficit.
Perhaps it just wasn’t the right people who were paying these taxes. Data from the IRS indicate, however, that in 2001 the top 50 percent of wage earners paid 96 percent of the taxes! And the top one percent paid 35 percent (that’s 10 times what the bottom 50 percent pays)!
The top 50 percent is a household that reports more than $26,000 in income, while the top one percent reports $293,000 and up. (IRS data can be found at www.irs.ustreas.gov/pub/irs-soi/01in01ts.xls).
So it seems like something more than income redistribution is necessary. Gray Davis has been recalled and a Republican has been elected because governments need to be principled and responsible with their spending.
Better schools will result when families raise children who want to learn, not when a teacher makes $100,000 per year. A higher minimum wage, while perhaps making it easier for a student to earn beer money, will not help the single mother who makes $8.00 an hour.
The lesson of California is that the government should not be and cannot be the source of individual prosperity.
Hopefully, for the sake of the citizens of California, Governor Schwarzenegger will realize that the lesson here is that the individual, not the tax dollar, is the greatest asset a government has.