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December’s ugly stock market is very bad news for California’s finances.
That’s because the state’s top 1 percent of personal income tax earners — roughly 164,000 tax returns — generate about half of the personal income taxes in California. A good chunk of the income from the wealthy comes from capital gains and stock options from companies in tech and other industries, meaning that even small changes in the financial markets can cause big swings either way in terms of the state’s collected revenues.
A forecast by the state estimates personal income tax collections in fiscal 2018-19 will account for nearly 70 percent of the state’s total general fund revenues and transfers. Sales taxes are expected to represent roughly 20 percent and corporate taxes another 8 percent, with the rest coming from other taxes.
originally posted by: infolurker
So it appears California is going to have some problems due to the rich 1% being responsible for 50% of income taxes which also accounts for over 1/3 of the entire tax income of California.
The strong economy stokes fears that inflation is picking up. • Fears about inflation drive worries the Federal Reserve could raise interest rates faster than indicated. • The worries about the Fed fuel a long-held view that rising rates kill bull markets, partly because companies tend to grow more slowly when money becomes more expensive to borrow. • That daisy chain of anxiety lead to a simple conclusion: Sell.
Ed Yardeni, a longtime Wall Street guru who isn’t one of the clowns of the bunch, said flat out last week that the market was being propped up. “These markets are all rigged, and I don’t say that critically. I just say that factually,” he asserted on CNBC.
America was built on capitalism and free and fair markets. Today’s markets aren’t fair. In fact, they are unfair because they are putting lots of money into the pockets of a small number of Americans.
The bigger problem is this: If stock prices are artificially inflated, nobody can tell what a company is really worth. And banks are going to be hesitant to lend money to companies with fuzzy valuations.
originally posted by: odzeandennz
a reply to: infolurker
But the stock market is doing MAGA... remember... less than 24hrs ago, it was being cheered and hail trump on ATS and most one sided conservative news outlets 😂
So California is really lucky because the economy and stock market is doing so well!
So all the snide sarcastic remarks are oxymoronic... because the stock market was great a couple of days ago 🤣