"California proof that taxing the wealthy doesn't work"

Let's look at a letter published today by Craig Blankenship in Edmond with the headline "California proof that taxing the wealthy doesn't work." It is easy to see why this letter was published. First, it pushes the plutocratic agenda of the ownership of the Oklahoman: don't tax the rich! Second-- and this seems to be a new angle for the paper-- it singles out California as some horrible example for how to do things. (Examples include here, and a crazy letter here.)

Mr. Blankenship's argument is this: Oklahoma's middle class pay higher state incomes taxes than California's, but California's wealthy pay higher taxes than Oklahoma's. Despite this, Oklahoma isn't "in the process of going bankrupt" like California is. Thus, President Obama shouldn't raise taxes on the wealthy, because that is a recipe for going bankrupt.

Mr. Blankenship is hardly original in making this argument. A quick search on Google shows plenty of right-wing on-line publications pushing the same thing.

The question is, however: are these people right? Unfortunately the answer is a resounding no. In Mr. Blankenship's (and the Oklahoman's) case, however, the answer is an embarrassingly resounding no. Before getting to that, though, one wonders why Mr. Blankenship (and the editors of the Oklahoman) didn't take that next step and come to the conclusion that higher taxes on the middle class is the way to go! Indeed, one could easily use Mr. Blankenship's logic to produce a headline reading "California proof that taxes must be raised on the middle class" if one wanted to.

But back to the problem. Mr. Blankenship writes, "In California, those with taxable incomes of $55,000 pay only 1 percent state income tax." Wait. What? That is actually just a made-up lie. When you look at the actual tax table for 2011 (pdf), the tax on a taxable income of $55,000 is $2,763. That's 5%!!!

Think about that. At this point, Blankenship is just making things up. Worse, the editors haven't even bothered to check his point. They just publish it because it supports the agenda they're trying to push! Looking at the rest of his numbers shows similar flaws. It is impossible to know where Blankenship got his numbers, but that is the beauty of the letter.

Ironically, California's financial problems are due in some great measure to the very fact that it is quite difficult to raise tax revenue there. Its famous Proposition 13 severely limited property taxes. (Essentially, it capped the maximum increase at 1% and allowed reassessment of base value only upon sale of the house-- if you've had your mansion since 1990, you're paying taxes with only meager increases on its 1990 value.) And raising state taxes requires a 2/3 majority in both houses-- often difficult to do.

So, no, California's problems aren't that people like Kobe Bryant, Kim Kardashian, these people, and these people, are paying too much. If anything, it's the opposite. But that's not what the Oklahoman wants you to hear, so they'll happily use Mr. Blankenship as a surrogate to peddle their lies.