Famous Last Words? Justice and Fairness in California

The wealthy "aren't locked in to being here in California," said Senate Budget Committee Vice Chairman Bob Dutton (R-Rancho Cucamonga). -- LAT

It's simple, really: the California government spends money it doesn't have and then takes some from whoever has the most. At least state legislators have a common-sense idea of what rich is -- wealth penalties would affect $321,000-earning families to the tune of a 7.5% increase, families with $642,000 to the sourer tune of a whopping 18% increase. Tough times, but nowhere near as outrageous as the standard Kerry/Clinton line that if a husband and wife (with four kids) each make $100,000 in pretax income then they're not a working family but a rich one.

But Vice Chairman Dutton is right -- not even the rich have a right to live in California. One possible problem with my mobile-society defense of (fairly) radical federalism is that it's easier for the rich to leave than the poor. Another problem could be that legislators will cater to the rich in order to keep them from moving away. But it's arguable that the wealthy are often so plugged into the social and economic networks of their jobs and peer groups that moving away is simply not possible. And obviously here with California you have legislators basically betting on the likelihood that that's true. Fair? Not really. Just? Yes. Rotten policy? Of course. Why? Because California can't afford its 'social' spending. And California's spending anyway. Just as rich people don't have a political or moral right to live in California (although of course rich California citizens have a political right not to be kicked out of California), they don't have a duty to give away their money until people stop asking (unless of course tax increases are passed and they elect to stay in California, but that's no moral duty).

(An example, PS, of why 'justice as fairness' seems like a mistake to me. Fairness is actually more exacting a standard than justice (at least sometimes, probably often, and maybe always; I'm still working that out). And it plays by different rules. If you think that standard is better than justice, say so; but don't say fairness should be justice, because then our legal institutions (especially courts) become organs designed for the manufacture and imposition of fairness -- which they are certainly not, and never should be, designed to do. The imposition of fairness can actually be -- unjust!

MORE...

Megan picks up the thread with some sharp-sounding Actual Economist's Observations, noting that

places like Buffalo are still saddled with a tax-and-spend system that they literally can't afford--the city recently ended up in receivership despite large transfers from the state government.

McArdle readers and others should refer at once, if they haven't already, to Edward Glaeser's definitive City Journal piece from last year, Can Buffalo Ever Come Back?: Probably not—and government should stop bribing people to stay there.

Comments

[Brandon]

I think some of these tax hikes strike me as somewhat excessive (and I tend to be on the "liberal redistributionist" side more often than not), mostly because the budget situation in California is dire, and I don't think it's going to improve if they tax the people who they need to financially contribute out of the state.

However, it's worth noting this is not a simple case of crazy liberals getting in power and wanting to raise taxes. The financial situation in CA has been heading downhill since the 80s (Pete Wilson + Prop 13). While social spending has increased somewhat (and it has been a battle to increase even the amount it has, because politicians have been aware of the fiscal situation), the biggest problem is that taxes were never really increased to correct for the shortfall due to prop 13.

Add a celebrity republican governor who promised to balance the budget without raising taxes, failed, and actually made the budget situation worse--and you reach the desperate situation today where there are really no good solutions--even deep cuts in education and transportation can't make up the shortfall.

[Shane MacGowan's Teeth]

If you think $200,000 pre-tax income isn't rich, you're not a conservative and you need to get out of the Beltway.

[Michael]

Oh, and if Megan's an economist, I'm a nobel laureate.