Another economist is sounding a warning about Prop 55, the ballot measure that would extend taxes on the wealthiest Californians. Christopher Thornberg, founding partner of Los Angeles-based Beacon Economics, says tying tax revenue to the fortunes of the wealthy is a disaster waiting to happen.
“We are setting ourselves up for a world of pain,” Thornberg tells GV Wire. He based his analysis on the fact that the wealthy use capital gains from the stock market for their income. Because of the volatile nature of Wall Street, it could lead to a downturn in their revenue, and thus the state’s.
Thornberg says politicians soak the rich, and do not care of the fallout. He suggests a more stable, reliable form of revenue would be increasing the property tax for wealthy. Property taxes, Thornberg says, are more consistent than the stock market.
In a recent Beacon Economics report, Thornberg says economic indicators to be concerned about include China, water policy, California housing and a lack of public investment.