U.S. Bankruptcy Judge Christopher Klein accepts Stockton California's bankruptcy application, making it the "the most populous city in the nation to enter bankruptcy," as CNBC reports.
"It's apparent to me the city would not be able to perform its obligations to its citizens on fundamental public safety as well as other basic government services without the ability to have the muscle of the contract-impairing power of federal bankruptcy law," Klein said.
The city of nearly 300,000 people has become emblematic of government excess and the financial calamity that resulted when the nation's housing bubble burst.
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By 2009 Stockton had accumulated nearly $1 billion in debt on civic improvements, money owed to pay pension contributions, and the most generous health care benefit in the state—coverage for life for all retirees plus a dependent, no matter how long they had worked for the city.
Other California cities in trouble include Atwater, San Bernardino and Mammoth.
These California cities are perfect examples of liberal spend and tax policies completely failing. Accruing debt with no way to pay it, running deficits year after year, spending more money than is being brought in, etc....
For the record, California has the third-worst state business tax climate in the nation, according to an October 2012 report from the Tax Foundation, a national tax research organization that tracks state taxes in its 2013 State Business Tax Climate Index.
California has the highest state sales tax in the nation.
California levies a 7.5 percent general sales and use tax on consumers, which is the highest statewide rate in the nation. Local governments are permitted to levy another 1.5 percent. Click here for the State Board of Equalization's detailed description of the statewide sales and use tax rate, and here for information on additional city and county sales tax rates.
The highest personal income tax in the nation.
California's personal income tax has the highest top rate and one of the most highly progressive structures in the nation. After passage of Proposition 30, California's top rate is 13.3 percent (including the 1 percent surcharge for mental health programs, for all personal income taxpayers with taxable income over $1 million). Hawaii is second, with a top rate of 11 percent. Most small businesses are S Corporations, partnerships, or sole proprietorships, and pay their business taxes at the rates for individuals, which makes California's taxes on small businesses some of the most burdensome in the nation. Seven states do not impose a personal income tax.The second highest gasoline tax in the nation.
California's combined local, state and federal gasoline taxes total 68.9 cents per gallon, the second highest in the nation, just behind New York (69.7 cents per gallon), according to an October 2012 report by the American Petroleum Institute.
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Yet Obama and liberal continue to insist that raising taxes will do far more good for the country than controlling spending and reforming entitlements.
California is indisputable proof of that argument's fallacy.
Related:
CalPIRG gives California failing grade on spending transparency
California bankruptcies are only the beginning