1 January 2017 - DrSunshine.org
When Californians travel to other states or other countries and people ask where they’re from, eyes light up with the response. California inspires people, worldwide. The nation under Trump is headed in destructive directions. California, the economic equivalent of France, has the power to show how constructive paths lead to a stronger economy.
California can be the place it wants the United States to be, and lead the way for
the rest of the country.
Here are some goals:
Climate change: Scientists at MIT and the National Renewable Energy Lab have found that solar, wind, geothermal, and energy storage technology
storage, etc) are now efficient enough to provide all the electricity we need at affordable prices. California can require PG&E to phase out all electric power generators that use fossil fuels. As for cars, electric vehicles are here for good. California can require all gas stations to have at least as many
electric vehicle charge points as gas pumps. That would make it possible to clear the roads of gas-burning cars.
Trucks are another matter, but most freight moved by truck would, instead, move by rail if California eliminated roadbed subsidies for large trucks, which, according to industry records and engineering measurements, amount to about 25% of freight-truck revenues. Requiring railroad companies to move from diesel-electric to all-electric for locomotives operated in California would then come close to eliminating fossil fuels for freight. The technology for air travel powered by renewable energy is not yet in place, but commercial flights in California would be greatly reduced by building high-speed rail to move people between major cities faster than airplanes, and cheaper, too, with appropriate subsidies. Strategies like these could, in less than two decades, replace fossil fuels with renewable energy for transportation and generation of electricity, and investment in renewable energy will lead to experience and expertise that could repay the investment many times over.
Healthcare: Massachusetts delivered healthcare to all its citizens well before the Affordable Care Act. California can do so now, no matter what happens at the federal level.
Taxes: FICA and Medicare taxes amount to 14.2% of wages for people with annual incomes under six figures. A 15% marginal rate for the total of federal and California income taxes on the lower third of the income spectrum imposes a greater hardship on those families than a 70% marginal rate would have on people in the top 1%. So, there is plenty of room to increase California tax revenue, and there will be even more room if federal taxes decrease for wealthy people. Economists have gathered a wealth of evidence that progressive taxation leads to more stable growth, so the benefits go beyond increased revenue. Democratic supermajorities in both houses of the California legislature make tax changes possible. People are beginning to notice this historical opportunity, and California should seize it.
California has a history of leadership, and it has paid off. Think big. There couldn’t be a better time for it.
Dr Blue White & Red
email Dr Blue White & Red
Update, 1 Feb 2017: By going its own way, but continuing to operate as a state in the Union, California can get most of the benefits that might accrue if the Calexit project were to succeed (which it won't), but without the complex and potentially catastrophic downsides. California would be the kind of place it wants the USA to be. That's close enough.
Update, 2 Feb 2017: A friend of Dr Blue White & Red asked for a rationale for a 70% marginal rate on people in the top 1%. The following table of income and essential expenses shows that if a 70% marginal rate on the people with incomes in the top 1% is unfair to anyone, it's unfair to the low-income wage earner, not the one-percenter.
|Total Tax Rates (federal + state + FICA + Medicare) - an example|
Annual Income from
marginal rates would be rates in the table, minus marginal federal, FICA, and Medicare
|Comparing Incomes and Essential Expenses (to show that 70% rate is fair to people in top 1%)|
|$2,000||income||$40,000||Monthly income (and expenses, following)|
|$800||shelter||$6,500||Let them have their million-dollar houses|
|$300||food||$2,000||and eat in fine restaurants, shop Whole Foods|
|$300||transportation||$1,000||and drive a Mercedes|
|$50||clothing||$500||and wear Italian loafers|
|$0||healthcare||$0||Assume government pays for healthcare (see Note 4)|
|$300||income taxes||$16,958||May look high for top 1%, but isn't ... see cash left over|
|$1,750||total (essentials)||$26,958||A rich person's "essentials" are expensive|
|$250||left over for
|$13,042||Even with lavish lifestyles, people in top 1% have
50 times as much cash for non-essentials
|12.5%||% left over for
|32.6%||One-percenter has a third of income on
Low-wage earner has a meager ⅛ of income to spend
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