The WasteWatcher: The Staff Blog of Citizens Against Government Waste

As Other States Thrive, California is a Shadow of Its Former Self

The WasteWatcher is the staff blog of Citizens Against Government Waste (CAGW) and the Council for Citizens Against Government Waste (CCAGW). For questions, contact

So many iconic images and phrases come to mind when you think of California.  The Gold Rush.  The American Dream.  Hollywood.  The place where anything was possible and big dreams can come true—thanks to the smashing success of capitalism.  “Go West, Young Man.”  It was the pinnacle of American culture, industry, and innovation, and, at one time, a bastion of conservative thought, voting Republican in nine of the ten presidential elections between 1952 and 1988 and producing two famous twice-elected Republican presidents of the twentieth century, Richard Nixon and Ronald Reagan. 

But the Golden State has lost its luster.  Gone are many people and jobs.  From 2007 to 2016, one million more people moved out than moved in, with low-tax Texas, Arizona, and Nevada the top three destinations.  The results of the 2010 Census represented the first time in ninety years that California did not gain at least one seat in Congress. 

Taxes have punished California’s middle class.  The Steven Spielbergs and the Mark Zuckerbergs can afford to stay, of course, and California’s poorest immigrants can’t afford to move.  The state where so many became rich now has the nation’s highest poverty rate and the highest degree of inequality

The 2017 Tax Cuts and Jobs Act provided much-needed relief to taxpayers, but Californians stand to see much of their pay increases wiped out.  A proposal to require companies to fork over half of their federal tax savings to the state has gained traction.  If passed, California’s corporate income tax rate, at an astonishing 18.84%, would be the highest of any state in the nation by far—57% higher than the second-highest state rate, and 89.7% of the new federal corporate rate.

The top 1% of earners pay 48% of California’s taxes; if a few more of them move, that’s a massive hole in the state budget.  If you’re thinking of starting a business, good luck: the nonpartisan Tax Foundation ranks California’s business tax climate the third-worst in the country.  The California Public Employees’ Retirement System (CALPERS) boasts $987 billion in unfunded liabilities, with union officials repeatedly cooking the books and lying to the public about the financial condition of the system.  CALPERS officials spend considerable time virtue-signaling, debating what recently demonized industry to divest from next—tobacco, oil, coal, and firearms are frequent targets.  Even with (unlikely) reforms, the sheer size of the liabilities means this is not going to end well.

Never fear, because California voters and politicians are busy tackling the real problems facing the state, like banning plastic bags and straws and utensils.  And thanks to California’s 1986 Proposition 65, which regulates substances that are thought by the state to pose a 1 in 100,000 chance of causing birth defects, reproductive harm, or cancer over a period of seventy years, you may soon get a required cancer warning label with a cup of coffee, depending on the outcome of a pending lawsuit.

When it comes to healthcare, an astonishing one-third of Californians are on Medicaid; in Los Angeles County, with a population greater than that of 41 states, that figure is 40 percent.  (You may need healthcare in California after drinking raw water or contracting whooping cough from the children of vaccine-skeptical Hollywood stars—as of 2014, some swanky private schools in Los Angeles had vaccination rates similar to those in South Sudan.)

The story that made so many fall in love with California has become a tragic comedy. 

Every once in a while there is glimmer of hope.  On Election Day 2016, voters rejected a ballot initiative that would have restricted the amount a state agency pays for drugs.  A bipartisan coalition came together (and spent tens of millions of dollars) to highlight the negative aspects of price controls, like drug shortages, less competition, and less innovation.  A 2017 attempt at single-payer healthcare, with an estimated starting cost of $400 billion (with a b), failed after Governor Jerry Brown’s (D) fiscally responsible instincts emerged after years in hiding.  The Assemblyman who introduced legislation that would have punished waiters with fines of up to $1,000 and six months in jail for giving unsolicited plastic straws to customers was forced to backtrack

Whether California is unsalvageable or not, let’s hope the ideas that have so burnished the tinsel in Tinsel Town do not keep moving east.


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