Needles, California last week

By John Ruberry

While I’m watching snow fall outdoors at Marathon Pundit world headquarters in Morton Grove, Illinois, the rest of my family is vacationing in southern California.

When they drove into California at Needles, just as the Joads did in The Grapes of Wrath, they were also greeted by more desert, as well as this 76 sign, which informs motorists that regular gasoline is selling for $3.79-a-gallon, more than a dollar above the national average.

Taxes are of course the reason and late last year the Tarnished State increased its gas taxes by 12 cents-a-gallon, to pay for road improvements.

California’s problems are vast. When the cost-of-living is figured in California suffers from the nation’s highest poverty rate. Modern day Joads are better off staying in Oklahoma. California’s roads are in bad shape because of onerous financial obligations in other parts of the budget. CalPERs, California’s public worker pension plan, is a sinkhole, so much so that Governor Jerry Brown is suggesting that pension benefits might be lowered–even for state workers currently paying into the program.

Another budget-buster is California’s high-speed rail project. Eight years ago voters approved the $40 billion project because government would pay for construction, which would make it “free.” Cost estimates for it have already climbed to $64 billion. If completed, and right now that might be stretch at best, it will run between San Francisco and Los Angeles. The relatively inexpensive segment where construction has begun, between Madera and Bakersfield, is already beset by delays, so much so that Victor Davis Hanson is musing that what little has been built could end up as nothing more than a modern Stonehenge. While the project is receiving federal funds, an increase of cash from Washington DC is not going to happen during the Trump presidency. So don’t count on a bailout, Californians.

Liberalism is expensive. And liberals love trains because, unlike cars and buses, they only go where there are tracks.

Moving up the Pacific Coast Highway into Oregon we learn that legislators are considering implementing an expensive cap-and-trade scheme that will punish large energy users, who are of course also large employers, in order to fight global warming. California has a cap-and-tax racket going already.  But there is some good news out of Oregon. Earlier this year, a new law took effect that allows drivers to fill up their own gas tanks–without an attendant. Of course some Oregonians freaked out, No, this was not an episode of Portlandia. Now only another coastal blue state, New Jersey, bans self-serve gas stations.

Blogger in Aberdeen, Washington

Heading north over the Columbia River into Washington, legislators in that blue state are debating a $10-a-ton carbon tax, one that a Democratic legislator who opposes it calls a “pretty sizable gas-tax increase.” Washington’s governor, Democrat Jay Inslee, who prefers a $20-a-ton tax, laughingly calls his plan a jobs creator.

The United States has much cheaper energy costs than Japan and most nations in Europe, which is one of the reasons, along with President Trump’s slashing of regulations–many of them involving energy–why the American economy is booming.

Does the West Coast want to be left behind as the rest of our nation enjoys prosperity? California, as it has been for decades for good and for ill, is already ahead of the curve.

John Ruberry regularly blogs at Marathon Pundit.

Via Kirk’s Market Thoughts

Russ DeKuyper: You know how much I gotta make to keep $300 cash in our tax bracket? I gotta make 800, maybe $1000. That’s why I want that check. Now, you give me that $1000.
Archie Bunker: Why, you copper-plated phony, you. You’re money nuts. When this was just a raggy fur, you couldn’t care less about it. Now it’s $300, your whole world lights up.
Russ DeKuyper: You bet it does. You really bet it does. Three hundred bucks tax free is really illuminating.

All in the Family Edith gets a Mink 1972

We are hearing a lot of complaints from people like Chuck Schumer and Nancy Pelosi about the new Trump Tax law. I don’t blame them, it’s one more brick supporting the individual democrat welfare states removed.

Because of the deductablity of state and local taxes, when itemizing (which people of means generally do as they can almost always find more than the standard deduction in write offs) tax increases in state taxes and local taxes while annoying were not prohibitive for people living in high tax states. So when Democrats make pitches like this one described by Chris Christie back in 2012 while he was stumping in Atkinson NH…

35 years ago we didn’t have an income tax in NJ no income tax like right here in NH, we had no income tax and Governor Brendon Byrne, a democrat said: If you just give me a small income tax, a little one, I will lower your property taxes, we had the highest property taxes in America back in 1977 so 35 years later, what have we got? We’ve STILL got the highest property taxes in America and the income tax that started at 2% under governor Byrne is now 9%”

…they knew they could mitigate the effects for the rich who would be getting the biggest hit because that 2% tax which would became 9% along with those high property taxes they were already paying, would come right off their federal taxes.

Now think of states like California where all the celebs are all anti-trump all the time. If you are doing a TV series and making say $100K an episode. California’s 13.3% tax rate costs you $13,300 per episode, BUT because of federal deduction for state taxes, that adds up to 5253.50 right off the top of your federal tax bill.   Over a 26 episode season that’s $136,591 a year in taxes you aren’t paying to the feds.  It’s like getting paid for an extra episode tax free!

As Archie Bunker might say: “Dat ain’t happenin’ no more.”

Starting in 2018 California’s 13.3% income tax really costs 13,300 per $100,000 made and New Jersey’s 9% tax rate really costs 9000 per 100,000 and if you are a person with a Million dollar property a 5% property tax really costs $50,000 a year.

And it’s not just states, there are plenty of cities that have their own income taxes like Washington DC , Baltimore, Denver,  NYC,

And since the people getting these deductions are by nature the most mobile,  suddenly you have the prospect of the slow exodus of such people to low tax states and cities becoming a stampede that you have to somehow curb.

In other words you have to compete!

No longer will it be a gimme for liberals to buy off activists or pack state bureaucracies the feds aren’t going to subsidize these vote buying schemes anymore.

Now you have to give the voters a reason to stay while at the same time explaining to your base that if you don’t there will be no gravy train left to ride on.

This is why not a single Democrat voted for this tax bill, they knew that if it’s passed their overwhelming democrat legislature would face a day of reckoning.  That day has now arrived.

Welcome to the free market folks!

I should add one caveat to this.  All of these states and cities have one advantage that their worried counterparts in Germany and Australia don’t.  The Trump boom that these tax cuts will produce increased revenues that might, just might, give them enough wiggle room to make these needed changes to their tax codes over time and thus less painful.

But their window of opportunity is going to be a very slim one, will they open said window or push it closed and wait for these tax cuts expire?

Update:  I’ve gotten emails asking about NH & Tennessee listed as 5% & 6% respectively when they don’t have a state income tax, however both Tennessee and NH both tax dividend and interest income and thus those taxes would be deductible in the examples above, full details here.

Jeanne Ives

By John Ruberry

At my own blog and here at Da Tech Guy, I enthusiastically backed the candidacy of Bruce Rauner, the current Republican governor of Illinois.

Count me as an ex-supporter. I’ll be voting for state Rep. Jeanne Ives (R-Wheaton) in next spring’s primary.

Rauner was a political newcomer when he narrowly defeated unpopular incumbent governor Pat Quinn three years ago. He became the first gubernatorial candidate in the Land of Lincoln to win a majority of the vote–albeit a very small one–since Rod Blagojevich’s first victory in 2002.

Rauner’s campaign slogans were “Bring Back Illinois” and “Shake Up Springfield.” He hasn’t done either which is why, in its upcoming cover story, National Review is calling Rauner “the worst Republican governor in America.”

After Quinn’s own narrow win in 2010, he and House Speaker Michael Madigan (D-Chicago), by far the most powerful politician in Illinois,  ramrodded through the General Assembly what was called a temporary income tax increase, which would expire shortly after the 2014 gubernatorial election. At that point, after Quinn’s presumed next win, the tax increase would be voted on again and made permanent.

But fed-up Prairie State voters, most of whom are corralled into gerrymandered legislative districts created by Madigan, who is also the chairman of the state Democratic Party, have no other way to fight back except at the top of the ticket every four years. They chose Rauner to stop the bleeding.

In his previous career Rauner was a venture capitalist. When he took over a company he could fire the CEO. He can’t do that with Madigan. So what followed was a game of chicken. Rauner, as part of his Turnaround Agenda, supported such common sense reforms as term limits for legislators, later changed to term limits for legislative leaders, which was clearly aimed at Madigan, who has been speaker of the House for an unprecedented 32 of the last 34 years. It’s Madigan who Reuters calls “the man behind the fiscal fiasco in Illinois.”

Other Turnaround Agenda items included tort and pension reform–Illinois has one of the worst-funded public pension systems in America–a ban on public sector unions contributing to state political campaigns, an option for local governments to enact right-to-work laws, as well as a two year property tax freeze.

Rauner said he was not averse to an income tax increase–but in exchange for his support of a tax hike he wanted his Agenda Turnaround agenda passed.

For thirty months the game of chicken continued, and that included an unprecedented two years without a budget. Illinois’ pile of unpaid bills tripled, reaching a level of over $16 billion. In the end Boss Madigan won. Overriding Rauner’s veto and some Republican legislative defections–who provided cover for Democrats in unsafe seats to vote “No,” Madigan’s 32 percent income tax hike became law.

Rauner and the GOP didn’t see a single part of the Turnaround Agenda included in that tax hike. Its passage was a colossal failure for the Republicans and long-suffering Illinois taxpayers.

And Rauner has been a colossal failure too. Yet he’s still running for reelection. In his video announcement Rauner dons a leather jacket and rides a Harley-Davidson motorcycle, which is ironic as southeastern Wisconsin, which is where Harley-Davidson is based, has been a direct beneficiary of Illinois’ decline.

The failures of Rauner don’t end with Madigan winning the tax increase war. Breaking a promise he made Cardinal Blase J. Cupich of Chicago, Rauner, who is pro-choice, signed into law a bill that keeps abortion legal in the state even if the US Supreme Court overturns the Roe vs. Wade decision. The bill also allows Medicaid funding of abortion as well as funding of abortions for state employees. And Rauner also signed into law a bill, weeks before California did, making Illinois a sanctuary state.

Ives, who is Rauner’s only declared Republican opponent, voted against both bills when they were up for vote in the House.

Last week the governor drove home the gist of his own failures when he said of Illinois, “I’m not in charge.” Who is? Madigan, because he has “rigged the system,” Rauner says. Is that true? Probably. But Rauner has had three years to unrig it. That’s why voters hired him.

What expectation do we have that Rauner can unrig it in a second term?

In her campaigns announcement Ives said that she wants to “realign public sector salaries and benefits to be commensurate with their private sector counterparts who finance it all.” Specifically she favors 401(k) plans for new state hires. Ives, a West Point graduate and a mother of five, also backs property tax reform and in an acknowledgement to one of President Trump’s campaign themes, vows to fight for the “forgotten people in Illinois” Of which there are plenty, including me.

In that campaign introduction Ives refers to the governor as “Benedict Rauner.” While I don’t view Rauner as purposely traitorous to the voters who supported him, he has been a spectacular disappointment as governor. I apologize to anybody who took my advice and voted for him.

Rauner says he is “not in charge” of Illinois yet he still wants four additional years of not being in charge. Who in their right mind can get behind that? Rauner says “it’s time to finish the job.” But he hasn’t even started it yet. Imagine Rauner as a homebuilder and three years after hiring him all that he has to show for his efforts is an unkempt pile of bricks paid for with money borrowed from you.

That’s Illinois, which leads the nation in negative net-migration. Its bond rating is the lowest ever for a state.

John Ruberry regularly blogs at Marathon Pundit.

By John Ruberry

Of America’s largest cities only Chicago has a declining population. So far this year–as it was for all 2016–more people were murdered in Chicago than in New York City and Los Angeles.


On the surface it seems that Chicago has the best government that money can buy. The Watchdogs of the Chicago Sun-Times reports that one-third of municipal workers of America’s third-largest city banked over $100,000 last year. Meanwhile, just 11 percent of Cook County workers–Chicago is the county seat–earn more than $100K. The numbers are similar for state of Illinois employees.

Thirty-six Chicago payrollers collected more than Mayor Rahm Emanuel last year.

Overtime run amok partially explains the problem. Generous campaign contributions from public-sector unions to politicians explains much more of it.

The median income for Chicagoans according to the US Census Bureau in 2015–the most recent year that is available–$63,153.

In Chicago it’s great to be part of the ruling class. But Chicago’s roads are crumbling, barely one out of four of its students in its government schools read at grade level, its bond rating is the lowest among major cities, and businesses lack confidence in Chicago and Illinois as a whole. If you are part of Chicago’s ruling class you might view high taxes as a downpayment on your next paycheck or your retirement, but Chicagoans endure the nation’s highest sales tax rate and they were slugged with the highest property tax increase in the city’s history to fund public-worker pensions.

Blogger on Chicago’s Northwest Side

Yet Chicago’s public pensions are the worst-funded among America’s biggest cities--at a rate of just 25 percent of its obligations. But the cruel joke may be on these well-compensated public-servants. Despite the strong pension protection clause in the Illinois constitution, a pension “haircut” seems unavoidable for retirees. Michigan has similar wording it its constitution, yet Detroit municipal retirees saw their pension checks cut after the Motor City declared bankruptcy.

Chicago’s decline and fall continues. But hey, at least some people for now are making a good buck off of the rotting corpse. Let the good times roll.

John Ruberry regularly blogs at Marathon Pundit.

On Conservatively Speaking and to a lesser degree on DaTechGuy on DaRadio we speak about the one party rule in Massachusetts and all the trouble it causes us.

Massachusetts and California may be one side of the coin but the NYT talks a bit about the other side of the equation:

Come January, more than two-thirds of the states will be under single-party control, raising the prospect that bold partisan agendas — on both ends of the political spectrum — will flourish over the next couple of years.

There are risks in such a political situation:

Some politicians are mindful that one-party control carries with it one-party blame — and a risk that a particularly partisan agenda will eventually irk voters and lead to a reversal in the next election.

But there is also a reward in a particular sense.

I am a conservative because I believe it is not only morally right but it produces the greatest good for the greatest number economically and socially and for the future of my children and grandchildren. Let’s work under the assumption that our friends on the left believe the same (we’ll pause for our conservative readers who might have been drinking to wipe off their keyboards after spitting it out).

Previously we have seen the effects of liberal rule in cities like Detroit but now we will be able to actually compare the results between the blue and red state as a whole.

In 2016 we will have years of data to see what states have made it and what states have not, what states have employment and what states do not, and more importantly with four years of Barack Obama ahead of us, we will see which states become places where people are going to want to live and which states are not.

I’m nearly 50, it’s my intention to live and die right where I am, but by the end of the Obama years both of my sons will be out of college and we will see where they will decide to go to make a future for themselves.

May the best states and ideas win. The only question is, will the media report it?