Links and Minifeatures 2009 05 18 Monday

Carnival of Personal Finance #205

Carnival of Real Estate

Tomorrow (likely today by the time I get this published), California has a special election. Six propositions, five of which have to do with bond issues that will allow the legislature to continue spending too much money a little bit longer. I strongly recommend a "No" vote on 1A through 1E. Allowing them to put off the need to stop spending so much money won't do the state any favors - in fact, it will make things worse in at least three different ways.

For the final proposition, 1F (no pay increases for legislators in deficit years), I'm leaning "Yes" but am prepared to entertain arguments the other way.

The economic future of our state will be determined by how many of Propositions 1A through 1E go down in flaming, ignominious defeat.

Tax The Rich? Watch The Inevitable Happen

Notice that the exodus from the high-tax states to low-tax states with more opportunity has been significant since 1998. But now with the plan to increase taxes again on the "richer", high-tax states are providing even more of a financial incentive for those in higher income brackets to leave them and move to low or no-income tax states. While such a relocation might have had marginally positive financial results for those leaving in the past, high-tax states are about to make relocation for financial reasons a no-brainer. And states like California and New York can hardly afford to run off the class of tax payer that presently pays the largest percentage of state taxes. But, with alternatives available, that's precisely what they're getting ready to do.

The rich needn't stop at moving from a high tax state to a low tax one. They can also move to places like Hong Kong and Kolkata. After all, they've got the money to protect their interests.

ARTHUR LAFFER and STEPHEN MOORE lay it all out.Soak the Rich, Lose the Rich

Did the greater prosperity in low-tax states happen by chance? Is it coincidence that the two highest tax-rate states in the nation, California and New York, have the biggest fiscal holes to repair? No. Dozens of academic studies -- old and new -- have found clear and irrefutable statistical evidence that high state and local taxes repel jobs and businesses.

and

We believe there are three unintended consequences from states raising tax rates on the rich. First, some rich residents sell their homes and leave the state; second, those who stay in the state report less taxable income on their tax returns; and third, some rich people choose not to locate in a high-tax state. Since many rich people also tend to be successful business owners, jobs leave with them or they never arrive in the first place. This is why high income-tax states have such a tough time creating net new jobs for low-income residents and college graduates.

If you think that the national media weren't doing everything they could to elect Obama, read this: How the NYT buried an Obama/ACORN expose just before the election

Hilarious! President Palin's First 100 Days

How the Mighty Fall: A Primer on the Warning Signs

Our comparative and historical analysis yielded a descriptive model of how the mighty fall that consists of five stages that proceed in sequence. And here's the really scary part: You do not visibly fall until Stage 4! Companies can be well into Stage 3 decline and still look and feel great, yet be right on the cusp of a huge fall. Decline can sneak up on you, and--seemingly all of a sudden--you're in big trouble.