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Sun, Feb

Other People’s Money

LEANING RIGHT - It is safe to say that most of the problems we face today will resolve themselves, continue to exist, or meet with cataclysmic failure as they feed upon themselves.

The problem of socialism here in Los Angeles falls into the category of a problem that will feed on itself until it expires. Prime Minister Margaret Thatcher of Great Britain characterized the reason for this so long ago when she observed that “the problem with socialism is that you eventually run out of other people’s money.” 

One recent manifestation of this problem is that employment in LA County’s motion picture and sound recording category – which covers the bulk of employment in the local film, TV and music industries -- fell to 107,600 wage and salary jobs in June, down 6.6% from June 2012 and 5.5% from May, according to state employment data.

The figures, compiled by the Los Angeles Economic Development Corp., are subject to revision and do not count those who work as freelancers or independent contractors. 

While industry employment typically declines in the summer months as the industry winds down production, the figures mark the second consecutive month of declines from a year ago in the film and TV jobs category. 

Robert Kleinhenz, chief economist for the Los Angeles Economic Development Corp., said the reasons for the over-the-year job decline in the entertainment sector were not clear. But he noted that the June decline was at odds with the national picture: Industry employment for the U.S. stood at 390,300 in June, up from 381,600 in June 2012. 

Studios including Walt Disney, as well post-production houses such as Rhythm & Hues, have laid off hundreds of workers this year in an effort to cut costs. Southern California also has been squeezed by the flight of film and TV jobs to other states and countries. 

These people will no longer be adding to the pot of “other people’s money.” 

At the end of July we learned that California lost 5.2% of its businesses in 2012. There were 1.3 million businesses in California at the end of 2012, 5.2 percent fewer than in the previous year (that’s about 73,000 fewer). 

These people will no longer be adding to the pot of “other people’s money.” 

In addition, many top-earning residents in California are ready to leave for good due to the excessive taxes they are required to pay. From winery owners in Napa Valley to popular sports figures, high-income residents who have been loyal to “The Golden State“ are simply fed up.

 

Golfer Phil Mickelson has openly voiced his feelings about the issue and did not hesitate to disclose that he has considered leaving California, although he later regretted being so vocal. Other top earners are also speaking out about their plans to leave the state, and these residents have plenty of options that will be much easier on their pockets.

 

The southern state of Texas is a very attractive option for many high-income residents of California. The income tax rate in this state is zero, which is a huge difference from the excessively high 13.3% tax rate that the top-earning residents in California are required to pay.

 

Nevada is another option that many California residents are considering. According to Nevada accountant George Ashley, his office has recently received over one-hundred inquiries from residents of California who want to know the tax advantages of relocating from California to Nevada.

 

This increase in state taxes will have the greatest impact on individuals or families earning $250,000 yearly. They are already required to pay 62% of the states income tax, and this increase will lead to them paying much more, which is why many residents want to bail.

 

Many blame Proposition 30 for this dramatic change in California’s tax laws, and top earners of the state simply believe that increasing their taxes is simply unfair. Many residents have already bailed, according to Fox News. Although those being interviewed chose to remain anonymous, they were very vocal about their frustration with paying excessively high taxes.

 

According to tax experts, many more residents are likely to leave the state by the year 2014. Some are still trying to figure out how to relocate legally without completely cutting ties with California State.

These people will no longer be adding to the pot of “other people’s money.”

 

Finally there is the plight of many who are not leaving because they are on the dole.

 

According to USA Today, more than 40 million people in the United States currently receive Food Stamp benefits. This number has risen nearly 50 percent during the past three years. The Los Angeles County Department of Social Services explains that the Food Stamps program was established "to improve the nutrition of people in low-income households". While the Food Stamp program is crucial for many families who qualify for benefits, many don't know if they qualify or how to apply for Food Stamp benefits.

 

These programs had good intentions but when generation after generations of the same families continue to languish on them something is wrong. The same applies to Los Angeles housing assistance, and all other forms of social and public assistance.

 

These people never added to the pot of “other people’s money.

 

Prime Minister Thatcher was indeed on to something years ago when she observed that “the problem with socialism is that you eventually run out of other people’s money.” Just look at what happened to the United Kingdom.

 

But right now I am trying to remember how to spell D-E-T-R-O-I-T.

 

(Kay Martin is an author and a CityWatch contributor. His new book, Along for the Ride, is now  available.)

-cw

 

 

 

 

 

CityWatch

Vol 11 Issue 63

Pub: Aug 6, 2013