You know I love numbers and I want to share some

with you, that impact on something that happened on Tuesday.  It has nothing to do with the Presidential election or who will control Congress or anything like that.  This is a California specific subject.

$50,000

$2,100
$500
$750
$1,829
$6,338

$38,508

That's a single person living in California who earns $50,000 in 2012 and the initial tax obligations they will pay, leading to an after-tax income of $38,508.  Those taxes are FICA, SDI, Medicare, CA State Income tax and Federal Income tax respectively.  If we assume that this person spends 20% of their income on things that are subject to California's sales tax, add another $866 to the total.

So they're paying $2,695 to the coffers in Sacramento, not counting the added taxes on gasoline and other levies the state, county and city sneak in.

Now let's look at someone else.  This person is also single and earned $3,000,000 in 2012, after all itemized deductions, credits and so on.

$3,000,000
$4,452
$43,500
$966
$1,026,762
$392,000

So this person is paying $392,000 to the State of California.  I won't even get into their sales tax amout.  Now, under Prop 30's new rules, that amount goes up by 3% of the amount over $1,000,000.  That's another $60,000.  Now it may seem that someone who earns $3,000,000 won't miss another $60,000, but bear in mind that after all of the other taxes before this increase, he or she was only netting $1,532,331. 

Now imagine that this particular person has ten of the earlier persons earning $50,000 working for them in that business that nets them $3 million a year.  So California was getting 10 times $2,695 or almost $27,000 from them and $392,000 from their boss prior to Prop 30.  Now that the Proposition has passed, this business owner says "enough" and moves his operation 300 miles away to Las Vegas where there is no state income tax.  California doesn't just lose the $60,000 in added revenue from the new Prop 30 increase.  California loses almost $500,000 in tax revenues.

Governor Brown sold a bill of goods.  The money isn't guaranteed to go to education but that's not the main problem.  The main problem is that there are a number of wealthy business owners who are going to use this to push them over the edge and over the border.  Move the operation to a state with no state income tax and minimize the footprint and sales in California.

It's too late to do anything about this one.  But California is on its way to having the highest tax burden in the U.S. at this rate and it will kill business here.  With no real manufacturing base showing any sign of returning to the U.S., let alone California, we're shooting ourselves in the foot.