What we have here is a failure to connect

Cause and effect:

Despite Tax Increase, California State Revenues in Freefall.

California State Controller John Chiang has announced that total state revenue for the month of November 2012 fell $806.8 million, or 10.8%, below budget.  Democrats thought they could hammer “the rich” by convincing voters to pass Proposition 30 to create the highest state income tax in the nation. But it now appears that high income earners have already “voted with their feet” by moving themselves and their businesses out of state, resulting in over $1 billion shortfall in corporate and income taxes last month and the beginning of a new financial crisis.  

What a tremendous surprise!  I figured out the fundamental flaws in the static revenue model used by the Minnesota state government when I was a junior in high school, by the exotic means of reading the Minneapolis Star-Tribune and remembering what was supposed to happen when tax rates were raised.  At least twice, there was an “unexpected” revenue shortfall as tax hikes failed to bring in the anticipated revenue.  Being of the “This is Spring Break so it must be Naples” class, I was more aware than most that the better-off Minnesotans tended to simply move to Florida when their taxes became onerous. So, it was pretty obvious that the flaw in the static model was that it failed to take human reaction to the increased rates into account.

If a high school junior who isn’t even paying direct attention to the subject can figure it out in passing, you would think someone in the California government could do so as well.

The remarkable thing is that this just happened two years ago in Maryland, where one-third of the state’s millionaires disappeared from the tax rolls after a special surtax on them was devised.  What were the Californians thinking, rich people in California behave differently than rich people in Maryland?  Actually, considering the Californians I’ve known over the years, I suppose that’s entirely plausible.

Regardless, you have to love that “Despite” in the title.  It’s almost sad how little it takes to make me happy.