Why Do California’s Tax Problems Continue?

Why Do California’s Tax Problems Continue?

Why Do California’s Tax Problems Continue?

It’s the classic adage made famous from the movie Robin Hood: “Rob from the rich and give to the poor.” Although Robin Hood may have meant well and his actions noble, the idea of taking more from the rich to give to the poor is not always wise when it comes to taxes. Besides taking more than the fair share from high earning individuals, which is egregious enough, taxing the rich makes for a never ending roller coaster ride when it comes to tax stability.

California’s Tax Problems Are Self-Inflicted

That is the problem California continues to face as it tries to “soak the rich” in an effort to overcome the state’s troubled economics. However, as lawmakers continue to play with income tax revenue, it’s the state continues to suffer, and in this case, the rich are getting the worst of the damage.

Leave the Rich Alone

So what should the governor of California do? Instead of relying on tax hikes to the rich, it’s time to make some real changes that will actually have a lasting impact on the unsettled tax situation in the state. The tax system needs real reform in order to become stabilized. Relying on the rich is not only unfair to those individuals who earn more money, but it’s also very unreliable as many of the state’s highest earners have incomes that are constantly changing and sometimes for the worse.

The Rich Are Definitely Getting Soaked

The problem is, is that would require a lot of explaining to the state’s middle-income population; and of course, it’s just easier to take more from the rich. However, relying on the rich and their often-unstable incomes can be dangerous. In 2012 numbers show that the wealthiest 1 percent of earners were responsible for slightly more than half of the state’s entire income tax revenue collected. That’s an increase of nearly 9 percent from the previous year when they paid 41.1 percent.

More Harm Than Good

Although the state’s tax hike for the rich has clearly brought in more money, the question remains – is it worth it? By depending on the rich the state simply increased the volatility of the tax system even more. By implementing real reform, the state could do itself a lot of good in the business world. By lowering the state’s sales tax rate and easing the burden on high-income earners, California might actually make the state more attractive to businesses, job-creators and even investors.

Sticking to the Plan

However, it appears that Gov. Jerry Brown is happy to continue collecting from the rich and saving up the extra cash for a rainy day fund. Brown’ focus is on capital gains, which he apparently plans to stash away for future emergencies or debt retirement, instead of pushing for new programs.

Change Not Likely

The tax battle will likely never end, especially as the state’s politicians remain divided on how to fix the system. One thing seems clear, though; it doesn’t appear that the government plans on easing up on the rich anytime soon, not as long as they continue to bring in the bulk of the state’s tax revenue.


We hope you found this article about “Why Do California’s Tax Problems Continue?” helpful.  If you have questions or need expert tax or family office advice that’s refreshingly objective (we never sell investments), please contact us or visit our Family office page  or our website at www.GROCO.com.  Unfortunately, we no longer give advice to other tax professionals gratis.

To receive our free newsletter, contact us here.

Subscribe our YouTube Channel for more updates.

Alan Olsen, CPA

Alan Olsen, is the Host of the American Dreams Show and the Managing Partner of GROCO.com.  GROCO is a premier family office and tax advisory firm located in the San Francisco Bay area serving clients all over the world.


Alan L. Olsen, CPA, Wikipedia Bio



GROCO.com is a proud sponsor of The American Dreams Show.



The American Dreams show was the brainchild of Alan Olsen, CPA, MBA. It was originally created to fill a specific need; often inexperienced entrepreneurs lacked basic information about raising capital and how to successfully start a business.

Alan sincerely wanted to respond to the many requests from aspiring entrepreneurs asking for the information and introductions they needed. But he had to find a way to help in which his venture capital clients and friends would not mind.

The American Dreams show became the solution, first as a radio show and now with YouTube videos as well. Always respectful of interview guest’s time, he’s able to give access to individuals information and inspiration previously inaccessible to the first-time entrepreneurs who need it most.

They can listen to venture capitalists and successful business people explain first-hand, how they got to where they are, how to start a company, how to overcome challenges, how they see the future evolving, opportunities, work-life balance and so much more..

American Dreams discusses many topics from some of the world’s most successful individuals about their secrets to life’s success. Topics from guest have included:

Creating purpose in life / Building a foundation for their life / Solving problems / Finding fulfillment through philanthropy and service / Becoming self-reliant / Enhancing effective leadership / Balancing family and work…

Untitled_Artwork copy 4

MyPaths.com (Also sponsored by GROCO) provides free access to content and world-class entrepreneurs, influencers and thought leaders’ personal success stories. To help you find your path in life to true, sustainable success & happiness.  It’s mission statement:

In an increasingly complex and difficult world, we hope to help you find your personal path in life and build a strong foundation by learning how others found success and happiness. True and sustainable success and happiness are different for each one of us but possible, often despite significant challenges.

Our mission at MyPaths.com is to provide resources and firsthand accounts of how others found their paths in life, so you can do the same.

Posted in
Nick Nanton

Nick Nanton – Emmy Nominated Filmmaker

Transcript, Nick Nanton –  Emmy Nominated Filmmaker: Nick Nanton: My parents essentially said, Hey, Nick, you can have anything you want in life as long as you can earn it, because we’re just trying to hold on here. So I learned pretty young that if you could provide value to other people they would give…

Gareb Shamus

Gareb Shamus – Bringing NFTs to Super Heroes

Gareb Shamus Biography Gareb Shamus is a serial entrepreneur, visionary, and cultural catalyst who has influenced over a billion people through his businesses, communities, and relationships in the Superhero and character franchise worlds.   As the founder and publisher of Wizard magazine, Shamus created the comic book industry’s most influential voice and grew Comic Con…

Heidi Kuhn - CEO of Roots of Peace

Heidi Kuhn–Founder of Roots of Peace

Transcript, Heidi Kuhn–Founder of Roots of Peace Alan Welcome to today’s show. Can you share a little about your background with us?   Introduction of Heidi Kuhn, see bio below   Heidi When one looks back on the tapestry of our life, you know, it is those seeds that we have in common rather than…

Three Reasons the Fed is Lying About Inflation

Why would the US federal government purposely underreport or flat out lie about the current rate of US inflation?  Below are three specific reasons given during a recent interview of Robert Zuccaro, CFA, Founder & CIO of Golden Eagle Strategies. He actually cautioned about inflation last February in an earlier interview, and published his findings…