California Has Problems, And They’re All Kim Kardashian’s Fault

There are plenty of folks saying today that while California might be — on its own — in the top 10 largest economies in the world, our political system far more closely resembles that of Greece. High spending and an inability to live within our means despite some of the highest taxes in the nation.

Thankfully, the fine folks at the “Restoring California Coalition” have decided to throw their weight behind the solution: the Millionaires Tax! And additional tax of 3% of income on taxable income over $1M, and of 5% on taxable income over $2M. (I’d point out that this would raise STATE tax brackets in those cases to 13.55% and 15.55%, respectively, well beyond any other state).

And of course, they’ve chosen as their poster child for the tax a representative sample of the average California high earner:

Now, I’ve got little love for Kim Kardashian. I fail to understand how someone has parlayed — as Joel McHale of The Soup is so fond of saying — a big ass and a sex tape into a fashion/fame empire. In fact, it’s not even a big ass and a sex tape that were the key; a lot of women probably have those. It’s more that she’s the offspring of a famous lawyer… A lawyer who was only famous because a major athlete/actor allegedly brutally murdered his wife and her boyfriend.

Any world where Kim Kardashian can be said to “deserve” her fame is a bit sketchy to me. In fact, my thoughts on her are oddly similar to those of Wil Wheaton:

That said, though, I don’t hate Kim Kardashian. I don’t know Kim Kardashian. While her onscreen persona is a bit vapid and useless, she’s obviously smart enough to have parlayed her fame into more fame and more money. She at least figured out the cardinal rule of fame: strike hard while the iron is hot. I don’t believe that we, as a society, should punish her because bored housewives find some escapist fantasy following the Kardashian family’s latest doings. And further, I don’t believe that we should, as a society, use her as the public scapegoat as a representative sample of “the rich” when she’s nothing of the sort.

The real “rich” that will be hurt by this tax are businessmen, and as much as the left scoffs at the idea of “job creators”, anyone in this state who has worked for a startup sees the reality: most of those businesses wouldn’t exist without the blood and sweat of the guys at the top — who often forego income, sleep, time with family and stability for years to build a company that eventually rewards them quite handsomely.

But even worse in this analysis is the fact that California has tried a Millionaires Tax rather recently, and the results weren’t exactly as planned:

In 2004, voters narrowly approved Proposition 63, the Mental Heath Services Act (MHSA), which imposed an additional 1% tax on personal income above $1 million. The funds generated from this “millionaire’s tax” were intended to expand county mental health programs. Taxpayer and business groups opposed the measure for a couple of obvious reasons. First, California is already a high tax, high spending state that didn’t need any more revenue. Second, as we predicted, Prop 63 would exacerbate California’s income tax volatility.

Although the final vote for Proposition 63 was tallied more than four years ago, evidence suggests that California’s most wealthy have continued to vote on this measure — with their feet. A recent survey from TNS Research, an international business research firm, found the California counties of Los Angeles, Orange and San Diego had the 1st, 4th and 6th highest number of millionaires in the country. However, even as the national population of millionaire households grew by 5.9% in 2007, Los Angeles County lost about 7000 of these households. Orange and San Diego Counties lost millionaire households as well.

So the net result was that the millionaires left. Further, this tax intended to improve county mental health programs largely had trouble spending the money. The above article (a tad outdated from 2008, to be sure) pointed out that the calls at the time were to pull the unspent $2B+ and allow it to be reallocated to general revenues.

This is bad policy, and it will only work to damage the California economy at a time when we’re already reeling from the housing bust. Following that by making Kim Kardashian the poster child for your movement is cheap and opportunistic, which might not be so objectionable if she represented the “average” California millionaire — but she doesn’t. Of course, I can’t claim it’s a bad tactic — given the moron voters in this state, it might actually work.

California has problems. Those problems require hard solutions, but instead we have people here who think we can simply paper over it by soaking the rich. After all, they just need to pay their “fair share”*.

* Fair share = always more than they’re paying today, no matter how high that number currently is.