I also think states and locales should be able to declare bankruptcy and restructure their obligations. Currently there is no clear way to get out from under prior bad governance. Here's a good article about how San Bernardino is trying: http://www.reuters.com/article/2012/11/13/us-bernardino-bank...

> a third of the city's 210,000 people live below the poverty line, making it the poorest city of its size in California. But a police lieutenant can retire in his 50s and take home $230,000 in one-time payouts on his last day, before settling in with a guaranteed $128,000-a-year pension.

> In 2009, patrol lieutenant Richard Taack retired at the age of 59, after 37 years of service. He took home $389,727 that year, including $194,820 in unused sick time and $33,721 for unused vacation time, according to city payroll records. Shortly after Taack retired - on an annual lifetime pension of $128,000 - he was hired part-time by Penman's city attorney's office, at $32 an hour.

Doesn't feel like residents of California are getting a value for the % of tax that we pay overall. If you are self-employed and make say 150K you are going to be paying around 35% fed + 6% SS employee + 6% SS employer side + 9% Califonia. total = 55%. ( Granted the taxes are applied on a graduated basis so the effective tax rate would be less.) In Europe, they pay on the order of 50% with free healthcare and a great transportation system. In the bay area, we get charged higher insurance rates based on the zip code with live and we get to drive on 101.

Just crunched the numbers to see what the effective rate actually is. Assuming self-employed and single in California for 2012, with standard deduction and 1 exemption, your taxable income on $150,000 total income is $131,416, and your federal income tax is: $30,257. Your self-employment tax is: $15,468. Your state income tax is: $10,373.

Total effective tax rate is: 37.4%

A bit higher than I thought it would be overall, but not quite close to 55%. Of course, if you're at that level of income you should probably set up an S-corp to save on SE tax and dump some money into a 401(k) to further reduce your taxable income.

I'm sorry what? 35% federal income taxes on earnings of 150k? No.

Over $85,650 but not over $178,650 -> $17,442.50 plus 28% of the excess over $85,650

Total federal payment: 17.4 + .28(150-85) = 35.6

35.6 over 150 = .23, and that's before factoring in the deduction you get to take for your California payment, or the standard deduction if you choose not to itemize.

Do you have a problem with the amount of money they're paying, or the fact that they're paying a pension at all?

What your suggesting seems like a horrible idea. The point of a pension is that it's a guaranteed obligation. Being able to absolve yourself of it with a bankruptcy is a wonderful way to screw over the workers who paid into it their entire lives.

Screwing over workers happens all the time in business. So lets screw over tax payers instead so they wind up having to spend tons of money to finance benefits that they are not receiving.

I think what most people have a problem with is that pension benefits are written by politicians who've are strongly supported by union's and looking out for their interest while no-one is watching out for the interest of the tax payer. As a result, pensions are gamed to max out the benefits by working overtime etc. There should be caps on the size of pensions. Bankruptcy could be used as a tool to re-negotiate some of these abusive pension benefits.

You are still going to have the unions dominating the legislature and the cocomitant crushing pension obligations if you remove direct democracy from California.

The state is too big. You need too big of a budget to campaign here. So the unions dominate.

I say split the state in half.

It doesn't sound reasonable though, it sounds moronic. A constitution should be the basis of all law (can someone let Obama's administration know about this?) and therefore should be extremely difficult and rely on vast, widespread consent to change. You're entirely right that until this gets fixed, CA will always be screwy.

I agree there are problems with California's cosntitution, but the actual issue here is that the QSB exclusion violated the US constitution.