Andy Clarke: Capps, and Government, Hardly Impediments to California’s Business Vibrancy

Tom Watson missing the bigger picture of what makes the state's high-tech business hum

By Andy Clarke | Published on 07.03.2011

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In Tom Watson’s June 29 opinion piece headlined “Capps Still Tilting at Windmills with Green Dreams,” he struggles — once again — to paint Rep. Lois Capps, D-Santa Barbara, as unworthy of her office. This is the third or fourth installment in a series of such articles by Watson, which he started writing a short time after Capps beat him in the last election.

Andy Clarke

While trying to tar Capps as some kind of quixotic delusional, Watson recklessly meanders around a whole landscape of gripes regarding California’s supposed unfriendliness to business, “Obamacare” and taxes on the wealthy. He points out that some companies have chosen to expand somewhere Back East (sic), and gets Vaughan, Ontario, mixed up with Ontario, Ohio, in trying to blame liberals for the expansion of a Canadian company (6N Silicon) while Ontario, Calif., apparently misses out. He bemoans the fact that a car company (Aptera), already located in Michigan, would choose to expand there, rather than here. It seems like a “no-brainer” that a car company would locate and expand near the center of the auto industry universe, but maybe Watson knows something I don’t.

I started a high-technology company here in Santa Barbara back in 1999. Many of my friends have started or work for local high-tech companies. I never had any issues with the state of California or experienced any anti-business attitude. The only problem we had was finding good, cheap startup space. When we finally did find it, at about half the price per square foot of what the local landlords were demanding, it was threatened by the proposed development of a Target store. Yes, the biggest threats to our early business survival came from over-charging landlords and over-zealous local developers.

Although we handled heavy metals and toxic gases, our federal and state permitting processes were straightforward and easy to comply with. We never wanted to be free to contaminate the environment, and I still don’t understand businessmen who feel that EPA compliance is a threat to their livelihood. Perhaps, if a business model is poor enough, but nonetheless manages to limp along, the eventual financial realities will make any compliance onerous.

High-tech companies are popping up all over California right now. In San Diego, I work with a nanotechnology company that relocated there from Princeton, N.J. (that’s “Back East,” Tom), and they are finding a foothold amid the many biotechnology startups spinning out of UC San Diego. Here on the South Coast, we have Transphorm, Soraa, LifeCel, and many others developing energy-efficient high-tech products that will lower the cost of driving, lighting, heating and cooling. Go to the Bay Area and you will see it is virtually exploding with new companies.

I know none of this will help some companies. Bad ideas don’t always die on the drawing board, sometimes they become companies and linger on for years. You can find them slowly finishing their lifecycles on the same streets as the vibrant new companies emerge. Some companies move away to get nearer to their industry’s hub, or cheap labor, or even a toxic waste dump. As they disappear, new companies replace them. It’s a form of natural selection that every mature businessman accepts.

In the end, it is a big-picture vision that makes business policy work. I think Lois Capps has that vision and votes it. A clean environment, beautiful weather, good schools and a well-adjusted populace make places like California highly attractive to entrepreneurs and the people they hire. The ceaseless drumbeat from Watson’s political corner demands that we sacrifice these things to make life easier for poorly conceived business models. Why not let some other state take them?

— Andy Clarke is a Santa Barbara entrepreneur who focuses on industrial applications in material science. He founded a local semiconductor capital equipment company that he later sold to a publicly traded California company. He has served as CEO, vice president/general manager and vice president at private and publicly owned high-tech companies, and is currently developing a new product idea in material synthesis.

Comments

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» SummerlandMom on 07.03.11 @ 09:22 PM

Good article!

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» BUFF on 07.04.11 @ 06:55 AM

Andy nails this right on the head. Before you drink Rev. Tom Watson’s Kool-Aid, consider not whether jobs are being ‘lost’ to Texas but whether they are being traded. Trading jobs is a race to the bottom, with the steady erosion of an educated middle class the result.

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» Larry Saltzman on 07.04.11 @ 06:58 AM

Thank you for an intelligent and well thought out response to Watson’s articles.

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» John Locke on 07.04.11 @ 09:29 AM

Nice that you have been successful, but the overall stats for California clearly show a net migration OUTWARD of businesses and jobs. The only reason the population is still growing is due to the rather high birth rate among certain groups.

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» b_reynaldo on 07.04.11 @ 11:34 AM

Defense contractors who fueled California’s prosperity were accused of cozying up to the Republican party and living off taxpayer largesse.

The same thing is happening with so-called “green” energy and hi-tech companies today. Entrepreneurs like Mr. Clarke who are loyal to the dominant Democratic party are rewarded with Federal contracts and preferential treatment by Rep. Capps.

The contradiction is that Democratic party entrepreneurs embrace the very open borders and affirmative action/multicultural/anti-achievement policies that are destroying California’s education system and imposing an intolerable burden on the taxpayer.

Did Mr. Clarke ever speak out in favor of maintaining the local schools’ GATE program, which was a steppingstone for future scientists and engineers? Has he ever spoken out against racial preferences in education and employment which diminish the valuing of merit and individual achievement, and discourage White and Asian male students from pursuing hi-tech careers? No, because he wants to stay cozy with the Democrats.

The Democrats rightfully point out that we can’t afford nation-building in hostile places like Afghanistan. But we similarly can’t afford to build the Mexican nation in California.

If Mr. Clarke feels that mass immigration from Mexico, aided and abetted by Ms. Capps’ votes against any enforcement of immigration law is so wonderful I have one question. How many engineers of Mexican descent has Mr. Clarke employed?

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» citizenSB on 07.04.11 @ 11:39 AM

Santa Barbara is fine for small high tech companies—but once companies get to be more than a couple hundred people they leave town. Once they get larger than about 1,000 people they leave the state.
California ranks 48 out of 50 in the cost of doing business, only ahead of Hawaii and New York.
http://www.cnbc.com/id/37516043/

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» SummerlandMom on 07.04.11 @ 10:46 PM

@ b_reynaldo -
The GATE program is a steppingstone for future scientists and engineers? Give me a break! Name one current engineer or scientist of prominence that owes their success to the GATE program. The GATE program is over-rated.

Racial preferences in education? Really? Is that what happened to you? You coulda been a scientist… if ONLY you had gotten into the GATE program. And now you’re left feeling bitter about the guys who did make it - even though there was no such thing as a GATE program when they went to school.

To say that entrepreneurs “like Mr. Clarke” are given preferential treatment including Federal contracts because he’s a Democrat, is an ignorant statement.

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» TraLaLa on 07.04.11 @ 11:23 PM

Great read, and right on the money ... it’s nice to know people like you are out there, Mr Clarke.

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» pj_armitage on 07.05.11 @ 08:46 AM

What Clarke alludes to, and comments seem to confirm, is the unwitting sense of entitlement displayed by so many would-be “wealth creators”.
Really: why should a bad business be perpetuated by special allowances? If they can’t operate profitably without concessions from others, maybe they should not be in business. That’s free market philosophy. The incompetent businessman claims he is a free marketeer - he just needs the rules relaxed so he can do his thing. But the rules were made by the market, so what he really wants is the market to relinquish its freedom in his favor, to the detriment of the market and other businesses.
As for the poor white and asian boys who got discouraged from being engineers because… Mexican boys were allowed to learn, too? What about girls? Do they also keep those poor easily discouraged boys from succeeding?
Maybe they get discouraged a little too easily. That’s more a function of their home life than some equal opportunity program. Daddy teaches them that there is always somebody else to blame for their failure, and so they never fail to fail.

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» AN50 on 07.05.11 @ 03:16 PM

Andy nobody is beating the retrograde drum but your progressive friends, you know the ones saying we need higher energy costs to coerce people into conservation (which hurts the poor way more than you white pretty boy liberals). You say Lois is balanced and only wants to preserve and enhance our beautiful state, but there is a cost associated with that, like much higher commercial real estate prices. You call landlords greedy but they are just making sure less smart, less successful entrepreneurs are weeded out. Looks like you were one of them.

Bottom line is you can’t have your cake and eat it too. Nice try but you are just another whiny liberal complaining that paradise is worth preserving but unwilling to pay for it. And, by the way, how much manufacturing do you do in this state and how soon before China beats that out of you? Your ideas are good but real wealth building occurs in an economy when an idea is actually made into something. That means manufacturing, labor costs, bigger building, more regulations and so on. Come back when you are doing a real business buddy.

Oh, the market doesn’t make the rules that squash businesses, that’s done by pesky liberals who think they know better than anyone else. Most of the onerous EPA regulations now crippling companies here are not only unnecessary but do far more damage to the environment than they were designed to help. Case in point the atrocious amount of waste generated by EPA rules governing the disposal of VOC’s. We are literally filling up hazmat waste sites with trash that contains no toxic or hazardous materials at all. The volume is staggering as is the amount of energy consumed doing it. All because some idiot like Lois doesn’t want that acetone dipped Q-tip in the regular trash. Before you talk about how easy it is to comply in this state you might actually talk to the people who have to really deal with it some time. Besides every one of you so called liberal business entrepreneurs always abandon ship when the cost of doing business gets to high, or you just shit can the labor pool and keep your pretty boy liberal engineers on board and screw the rest. I know your type very well and you ain’t all that buster.

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» Andy Clarke on 07.05.11 @ 05:12 PM

AN50 (whoever you are),

First let me say that I am flattered you find me “pretty.” You have unusual and eccentric taste, but I will accept a compliment no matter who it comes from. [I should mention b_reynaldo that I’ve never received any grant money, though I think I’d gladly accept it if it came, and also that I love the GATE program and have had the pleasure of employing several very good engineers, designers, and technicians of Mexican descent.]

My perspective is this: the population of CA votes, and the will of the majority is rendered into law. The result is the CA business environment, whether you like it or not. If you want the state to conform to a different model, you might want to give us a real world example of what it looks like. Does it look like Texas? How about Utah? Name the place, then tell us why you live here and not there. You name the place and I will tell you why CA has it beat.

The rest of your comment is pretty silly. You obviously have a lot of heat under your collar and need a good venting, so I hope it did the trick. And I hope you’ll get back to us with that model state that sets a shining example for CA.

Sincerely,

Andy Clarke

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» lou segal on 07.06.11 @ 02:07 AM

“A clean environment, beautiful weather, good schools and a well-adjusted populace make places like California highly attractive to entrepreneurs and the people they hire.”

You have got to be kidding about the good schools and the well-adjusted populace. I think you are stuck in a time warp, describing the state as it was about 40 years ago. Does our well-adjusted populace also include the growing homeless population, the gang problem which has taken over whole neighborhoods, the crumbling infrastructure (roads and bridges) and the one out of every 3 people in our state that receives food stamps. Let’s not forget the 12.5% unemployment rate, one of the highest in the country. BYW, do you send your kids to public schools if you like them so much.

While Ca. is experiencing negative job growth, Texas has created more than 40% of all the new jobs in the US. If you are unemployed in Ca, your best bet is to move to Texas. I would say they have a better economic model than our pathetic state.

I would venture to say you’re probably one of the few businessmen in Ca. satisfied with our tax structure, the 2nd highest in the country. You’re probably hoping we can raise out state income tax, so we can take over first place.

I am glad you like Capps, maybe you can tell us one original idea she has had without mimicking the Party’s talking points. Has she ever had an independent thought or a position on any major issue not dictated to her by the ultra left-wing of her Party? Do you think she can speak coherently and intelligently about any comprehensive bill now pending in Congress without her handlers pulling her puppet strings. It was interesting that she wasn’t able to explain the particulars of the health care bill to a group of doctors at Cottage Hospital. Finally, she admitted, when pressed to respond to questions regarding specific provisions of the new law, that she didn’t know the answers and the law is really “a big gamble”. Hardly surprising.

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» GeeWillikersWally on 07.06.11 @ 04:52 AM

Andy , the utopia that AN50 dreams about existed right here in S.B. Co. not very long ago . Now we have the Casmalia super site as an enduring example of the hands off approach preached by the AN50 types.

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» pj_armitage on 07.06.11 @ 08:59 AM

Man, I have lived in Texas. Austin is decent, but the rest is just like our central valley. Like around Bakersfield, in fact. It’s humid, hazy, and hot when it’s not just freezing and hazy. It’s flat, and mostly pretty ugly. Only a Bush is dumb enough to come back once they left. Great place if you’re and oil man, I guess.
According to that poll rating posted earlier, CA is #1 in tech and innovation, and #1 in access to capital. This is the entrepreneur state. More jobs are created every year by small businesses and start ups than by any big business.

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» Peace_Out on 07.06.11 @ 09:49 AM

Lou Segal is right about Texas. Texas is probably better than California because they have a laws requiring that all holders of office and public trust admit to the existance of a supreme being, AND that no one may own more than 6 dildos at one time, or milk another mans cow.
They also have a program that gives grant money to programs that control the weather. This helps to keep citizens off of food stamps and welfare rolls.

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» Daniel Petry on 07.06.11 @ 12:17 PM

Lou & AN50 - I have to say that this is one of the most humorous, delusional, pandering, articles submitted by a dyed in the wool far-left progressive to date. It truly deserves to be published where emptynewsroom continues to flourish - The “Independent”. My god, can you believe this guy actually thinks that “good schools and a well-adjusted populace make places like California highly attractive to entrepreneurs and the people they hire.”, is what California is currently experiencing?

Ladies and gentlemen I’d like you to meet - Rambler. Great to see that you finally submitted an article. And It’s good to place a face with the moniker. But man, Baghdad Bob has nothing on you. Whew.

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» SummerlandMom on 07.06.11 @ 03:56 PM

Daniel Petry can’t help himself. I guess you’ve got time on your hands, hey Dan? Get back to work.

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» Rambler on 07.07.11 @ 06:49 AM

Pope Bogus, you have taught us that delusional pandering is good, and shown us your skill in the art. How did this Heretic learn such skills that only Leaders of the Church must know? Is he a fallen Priest?

I do not ridicule you intentionally, yet you accuse me of being various Heretics, even this one. It is only my concern for Your Holiness that makes me point out that you drink too much of the Sacramental Margs and JDs, and perhaps promote too many fatty deposits within your Holy Cranium through your gourmandisms. I only wish for your Health and Longevity.

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» John Locke on 07.07.11 @ 09:27 AM

Clarke is clearly a member of the California apologist class, along with Elias of the LA Times. They will continue to claim CA is not in trouble, even as its econmics continue their decline, the population continues to shift from net taxpayers to net tax consumers, and defacto bankruptcy looms. Yes CA is beautiful and has wonderful weather, for the most part. Which clearly matters little to its economic health.

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» pj_armitage on 07.07.11 @ 10:41 AM

I think you have your apologists mixed up. An apologist is someone who defends and idea or belief….Clarke simply states what he has observed and experienced. Watson and Ptery and many others who seem to haunt this cyberspace are apologists for ideas that have been discredited, i.e., de-regulation. We already tried de-regulation and under-enforcement of regulations. That’s how we got this recession and painfully slow recovery.

And what does Elias of the LA Times have to do with it?

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» someguyinsb on 07.07.11 @ 05:13 PM

Nothing irks me more than an arm chair naysayer whose never built a damn thing telling those who do how its done.

While Clarke has successfully built a business the detractors have not. While Clarke cites experience and facts the detractors cite talking points and falsehoods. While Clarke can speak from experience the detractors only parrot the talking points of their greedy, myopic leaders. Those very same leaders that are more interested in profits and short term vanity than solving the real issues at hand.

I own a business in CA. I have started a few as well. Nothing about the “environment” of this state detracts from my ability to start and run a successful business. Nothing. In fact there are huge advantages to being here for virtually all businesses. However, we are mired in a mess. But it’s a mess made by the very same angry aging white men who while in charge for the last 50 years and have managed to suck the marrow out of the bones of our society leaving virtually nothing for future generations. The same angry white men who post these insipid posts on this site.

California produces more wealth from innovation and creation than any other place on earth. The most innovative and profitable companies in the world are born here, are headquartered here and continue to do business here. I suppose Apple, Google, Disney, Yahoo, the entire entertainment industry, the majority of bio, of tech of environmental sciences are all based here in CA because of the cheap labor and good food… I also suppose that a few commenter’s know better than the smartest people in the world… Are these companies leaving CA in droves? Um, no… they’re growing and it turns out that to be successful in tech you HAVE to be in CA not only to attract the best talent but to maintain the leading position.

The same old comments from the same old men. Haven’t you guys done enough damage for a few generations? Time for you to retire and shut the hell up. Your days are done. Your ideas are old and tired – like you. You’ve sucked the marrow out of the bones of our state. Its time that you just shut the hell up and go about your days listening to Rush and cashing your entitlement checks… checks that you’ve paid only a small % of what you receive. I on the other hand will never see a penny of the funds that I’ve paid into since I was 15. Nice legacy old white men. Nice legacy. Time for you to realize that all this mess happened under your watch. Time for you to sit down and shut up.

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» sandflea on 07.07.11 @ 05:54 PM

“...all based here in CA because of the cheap labor.”

Thats a good one!
Most of those successful companies you cited are run “...by the very same angry aging white men…”

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» Daniel Petry on 07.07.11 @ 05:57 PM

someguyinsb - so we know this much about you. You’re a racist. Not unusual for a progressive. Look at it this way - If I could buy you for what you’re worth and sell you for you think you’re worth….I’d make a fortune.

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» lou segal on 07.07.11 @ 06:11 PM

TO someguyinsb, You’re diatribe is not only silly, but reflects your own ignorance more than anything else. Why don’t you identify yourself, so I can evaluate your claim regarding the companies you supposedly started in Ca. Anyone can say anything, but since you are doing it anonymously, I will take it with a grain of salt.

I investigated the author’s claim that he sold a high tech company and all the other things he said he did. As far as I can tell he sold a tiny company a number of years ago for stock. There is absolutely no information out there regarding this company, so I imagine it didn’t make much money, if any. Also, couldn’t find any information regarding the other stuff he said he did.

As for Ca. being a great place for entrepreneurs to start a business, one anonymous poster and the author making this claim doesn’t mean much. Yes, the high tech industry, particularly social networking, is doing fairly well right now, but it employs a fraction of the workforce in Ca. As a matter of fact, many of the high tech firms outsource their manufacturing overseas and a health percentage of their workforce are employed in other states. Although they have their headquarters in Ca., so they can live here, it is much cheaper for them to build their factories or to do much of their hiring in other states. Apple just built a huge complex in South Carolina. Although high tech may be doing well, most of the other industries in Ca. are flat on their back.

You guys can vent all you want, but no one here has refuted my numbers from my previous post: 12.5% unemployment rate (more like 20% if you include all the people who are no longer looking for jobs), one of three people on food stamps and negative job growth in Ca.

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» someguyinsb on 07.07.11 @ 07:28 PM

My grandfather once said to me “Dont argue with an idiot in public, no one will be able to tell the difference” Seems appropriate as a preface to this retort.

Lou: I dont need, nor do I desire your validation. And no I will not disclose my personal successes and failures on this site to appease you.

To the other posters: sarcasm was the point regarding cheap labor. This, like most things, is lost on you…

A racist? HA! In addition to you being an armchair naysayer and most probably an angry white man, you’re also clairvoyant! Simply amazing.

What a crock. Instead of attacking me why dont you guys cite your actual experience to back up your assertions. I did, Clarke did… what are you waiting for? Or is it possible that you three havent done jack, havent started anything and yet seem to have all the answers and know where all the problems come from?

I repeat: You were in charge while all this happened. Who is to blame. My generation (gen x) or yours? We have to clean up the mess left by you and your fellow grumpy old men… get the hell out of the way. You’re obsolete. You had your chance and you screwed it up so bad that it may never come around. Nice legacy.

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» Daniel Petry on 07.07.11 @ 09:02 PM

Lou now don’t you feel chastised? I, Dan Petry am crushed that we got so little respect from someone so obviously experienced. It brings me warm and fuzzy feelings about a faceless drone who can’t use his real name unless the reason he has such anger issues is because his mommy really named him “someguyinsb”. If that’s not the case someguyinsb, my name is Daniel Petry and there is Lou Segal…yours? Be a brave little Marxist and give us your real name.

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» Rambler on 07.08.11 @ 06:35 AM

Some Guy in SB is a Heretic. He does not understand with Whom he trifles.

Pope Bogus and Father Lou are veritable Legends among the Adhering Faithful, having overcome Great Difficulties early in their Holy Lives.

Pope Bogus chose to leave school early and pay heavy fines, even forgo a potential commission as General, to parlay his Formative Experience into a less lucrative career as a Motivational Speaker and Missionary to the Cause. He has learned the Hard Way about Woods, Irons, and Putters, and can Pass them from one hand to another with the result that Holy Currency accumulates within His Robes and Vestments. Now he may bask in his well-earned accumulations, eating large fillets and drinking Jack Daniels at a window table, where he may bestow his condescending Holy Gaze upon passing Lay Men.

Father Lou worked long in Tourism and Entertainment. That is why his Sermons are often so Amusing. He has Equity in the Pacific Ocean, being an astute investor, but alas these shares are being diluted by Heretical Climate Changes. That is why he sometimes may become cranky.

Bishop ANchove, who dispenses wisdom from time to time on these pages, is not so well known. Her early affinity for men’s clothing has less to do with being gender confused and more to do with her noble quest to become the First Female Bishop of the Church. Along the way, the secrets have been a great burden and caused her to seek comfort in the bottom of her Chalice, perhaps too early and too often. Her Patron Saint, Ayn of Rand, is her daily inspiration. Of Course, We Pray for her Daily.

Heretics: Do Not Take These Holy People Lightly! They are your Beacons of Truth, Learnt Hard and Forged in the Fires of True Experience. Think about That, you Guy in SB!

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» John Locke on 07.08.11 @ 08:26 AM

Elias writes for the LA Times, and sometimes for the SBNP, and is constantly denying CA’s problems and declaring all is wonderful.

I, too, own a business in CA and pay busines income tax even in money-losing years (yah, that’s business-friendly all right).

“angry white men” is a racist term.

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» someguyinsb on 07.08.11 @ 08:57 AM

Ha! You guys are too much. I am far too busy to respond let alone respect a group of insipid angry white men whose panties are all bunched up because their time is up and they’re, well old angry white men.

You see I have multiple businesses to run. Something none of you understand. Unless I somehow overlooked their representation among your personal attacks, dodging of facts and your poor attempts at humor. (conservatives are never, ever funny, never)

No need to declare who I am (I know how the “interwebs” work) so you’ll have to wallow in the mud by your lonesome selves.

Yes you’re lonely, sad, angry old white men. And you’re hyper sensitive to boot. Or are you lonely, sad, angry brown men? Either way you’re still lonely and sad and angry…

Perhaps you should cash those entitlement checks you so loathe and play some lawn bowling or other activity on the socialist playgrounds created by those pesky liberals? Judging by the number of posts you create on this site you have plenty of time and could probably use the exercise and socialization.

Signed,

A real actual business owner and entrepreneur

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» Daniel Petry on 07.08.11 @ 09:21 AM

And yet you have the time to write another rambling tome. Child you are a hoot.

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» AN50 on 07.08.11 @ 10:19 AM

The only angry one commenting here is Someguy. Give it a rest. Andy, I appreciate your perspective. It’s just wrong that’s all. I too own a couple of businesses here. They do well and I don’t mind the tax rates because the type of business I do allows me to pass those taxes on to my captive customer base. They in turn codify those taxes into the prices their customer’s pay, that’s you. That is why some of us get irritated with the capitulation by folks like you. We don’t want anyone to have to pay more, simply to support a bloated fat inefficient, and largely ineffectual state government. I would rather have a lower tax rate and pass the savings on, be more competitive with others in my business that doesn’t have to pay such high rates. If you cannot understand that then there is really no hope for the troglodytes among us. If paying more and getting less appeals to you then by all means fork over all you have to your new god and leave the rest of us alone.

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» lou segal on 07.08.11 @ 11:22 AM

someguyinsb,

Everyone seems like angry old men to a knucklehead like you. BYW, if you’re interested in what angry white/brown men look like, he is staring back at you in the mirror.

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» John Locke on 07.08.11 @ 04:01 PM

I wonder if somegyinsb is geewhillikerswally? They sound simliar and equally looney. All mudslinging, no logical debate.

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» Andy Clarke on 07.08.11 @ 04:13 PM

AN50:

You say, “...I don’t mind the tax rates because the type of business I do allows me to pass those taxes on to my captive customer base. They in turn codify those taxes into the prices their customer’s pay, that’s you.”

What does that mean - “captive customer base?” Do you actually have captive customers? Because, a few lines later you cite your competitors. And please tell me what you produce that I might be a customer for.

You seem to be trying to tell us all that you are so smart that taxes can’t effect your business, but you are concerned nonetheless for all of us customers who “capitulate” to, what? your higher prices?

It sounds like you don’t really have any business, or if you do, you are about to lose it in absentia mens mentis and delusion.

One of the early comments included a helpful link:

http://www.cnbc.com/id/37516043/

For a nice comparison, and some data on the “independence” of Red States and Red State thinking, check this out:

http://www.taxfoundation.org/files/sr139.pdf

It seems that CA may have higher state taxes than average, but that’s common in states that pull their own weight. In fact, only 15 states carry the water for the other 35. CA pays almost 12% of the yearly revenue collected, and is the number one contributor. Sounds like moneymaking is alive and well in CA. And while CA nets a 21% contribution, mighty Texas can only scratch up 6%.

Now, I don’t like government bureaucracies, especially the EDD, but I do like civilization. You all (Watson, Petry, Segal, and you) seem to feel that you should benefit from civilization and society at large without contributing to its upkeep. That’s just plain nearsighted and unimaginative.

Now what is it you make? Umbrellas?

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» lou segal on 07.08.11 @ 05:49 PM

Nice try Andy. The statistics you cite regarding Ca. getting more back in federal spending than it contributes in federal taxes are seriously flawed. The first problem is that it assumes all federal spending is paid for which we know is patently untrue, to wit our enormous federal deficits. Second, most of these studies were done prior to 2009 and don’t reflect the massive stimulus plan enacted by Obama, the huge increase in medicaid spending and unemployment insurance. In reality, every state in the country is receiving far more in federal funds than they pay in taxes. In Ca., it is more like $1.50 in federal funds received for every dollar in taxes paid to the federal govt.

Thank you for informing me that I am not contributing to the upkeep of society. I guess the check I send to the federal govt, the state of Ca. and the County of Santa Barbara every year is chopped liver. Considering that I probably pay more in taxes than 99% of my fellow citizens in Ca., I don’t need any lectures from you regarding my appreciation for civilization. I know the drivel from you guys on the left, most of whom are receiving some kind of govt handout or generous public pension which I am paying for, and are hoping to extract more of my hard earned dollars so you can continue with your lifestyle at my expense. BTW, more than half of you don’t even pay federal taxes. Instead of having to deal with your snotty attitude, maybe a little gratitude would be in order. Forget that, many of your friends on the left are too entitled and privileged to appreciate the largess bestowed on them by their fellow citizens.

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» GeeWillikersWally on 07.08.11 @ 06:17 PM

Andy , it is a well recognized fact that the Bush era tax cuts did very little for the economy and remain the single biggest factor contributing to our debt crisis. Somehow this fact is lost on our two most vociferous Noozhawk right wingers, one of which depends on severely depressed tax rates to maintain his trust fund revenues. The other, Bishop Anchove as Rambler has named her, depends upon government contracts for a living.
These righties generally expect a free ride, all the while whining about taxes which ironically are at historic lows.

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» Andy Clarke on 07.08.11 @ 09:28 PM

Lou, you missed my point. CA pays more than it receives. CA pays more because CA produces more. Almost all the Blue States do. Those Red States, on the other hand…

Makes one wonder.

As far as gratitude goes, yeah thanks for paying your taxes. I pay mine, too, and they have never been chopped liver. Also, I’ve never been able to list my income as capital gains and get the 15% rate, but that’s a subject for another day.

I’d like to know what you guys do for work. None of you seem to have a notion, or you are too embarrassed to share. Why?

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» SummerlandMom on 07.08.11 @ 09:36 PM

Ah ha ha! I go away for a few days and return to see that there are 36 posts on this article! Andy Clarke, looks like you’ve hit a nerve! You’ve got these guys jumping! They’re posting with fury. I can almost see the slathering saliva that they’re flinging as they tap away on their keyboards. How DARE you question Colonel Watson! ? I also see that Noozhawk editors severely edited my last post - even though the “facts” I cited about Daniel Petry were previously published by Noozhawk… interesting.

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» AN50 on 07.08.11 @ 10:47 PM

How in the hell can you say a state as deep in the red as California pulls its own weight? That buster is about as delusional as you can get. If we pulled our own weight, produced more than we consumed then how is it we are in debt? My God how in the hell do you stay in business with math skills like that?
Yes it is true we contribute more to the fed than we get back in bennies, but why is that good? Why does that mean we are more productive and why is it our own state government is broke?
I believe in a strong society, one that rewards good and productive behavior and discourages bad and wasteful unproductive behavior. It’s not real hard and those of us who have raised children are well practiced at the philosophy. When you have kids of your own (if you are not to self absorbed to do so), please don’t coddle and spoil them and raise them to be nanny state parasites dependant on a government for everything they do, we have enough already as evidenced by Willie.
As for paying our way we actually had higher tax rates before and many public works projects being done here many decades ago. So why do you think we cannot do those things now? I will give you a hint, we actually produced way more than we consumed back then, want to know why?

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» lou segal on 07.08.11 @ 11:15 PM

This is my last post tonight. Regarding all the anger and fury, it seems to be coming from you guys on the left. I keep giving you facts and statistics, which as of yet no one has refuted.

As for what I do for living, it is no mystery. I haven’t disclosed it because heretofore no one has asked. Also, I am not sure how good an idea it is to reveal too much information on a forum where I don’t know the readers. However, to satisfy your curiosity Andy, I owned a company for many years in a real estate finance-related field. I am now semi-retired, although to young to collect SS or Medicare. I don’t have a govt pension and have never received a nickel from the govt. If you look at what I have contributed to our govt in taxes over the years as opposed to any benefits I may have received from our munificent big brother, trust me I am a big loser.

I am not sure you understand my point regarding the distorted numbers comparing taxes paid by California residents and federal spending received by the state. Yes, Ca contributed more than it received, but only if you don’t count the deficits of the US and the increased federal spending since 2009. Remember, 42 cents of every dollar spent by the federal govt is borrowed. This money did not not come from the citizens of this state or any other. So when you include the $1.6 trillion of annual deficits in the formula, every state in the country has received far more than they have contributed to the federal treasury.

As I understand it, you sold a very small company a few years ago and received stock in the acquiring company. I would think if you sold the stock at the right time, you would have paid the capital gains tax of 15%. Is it possible you may have benefited from the Bush tax cuts? Did you recompense the Treasury Dept. for those illegitimate tax savings?

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» sandflea on 07.09.11 @ 05:38 AM

“...the Bush tax cuts…”

Now they are the “Obama tax cuts”.

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» Rambler on 07.09.11 @ 04:10 PM

Oh, Bishop ANchove, if it were not for your Ability to get Down and Dirty, I fear these Heretics would not take you Seriously. That was a good point you made about CA being in the red even though we contribute more than we take from Uncle Sam!

And that point you made about the Good Old Days, when we paid higher state taxes and did more Public Works! Hah, That was Brilliant! And reminding them that the Past Generation was MORE PRODUCTIVE!!! I must confess, my milk came out my nose!

These Heretics don’t Understand you! They Don’t Get It! (Neither do I, but I Pray.)

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» Andy Clarke on 07.10.11 @ 07:00 PM

Lou,

The facts and statistics you have cited, like our 12.5% unemployment rate? Yes, I agree with you that it’s closer to 20%. CA’s business regulations are not the reason for this - otherwise, how do you explain past growth and employment cycles? Many of these regulations have been in force a long time.

Companies aren’t hiring because the market is not providing demand. Discretionary spending is down, because consumers are uncertain about their financial future. The idea that a tax break for corporations (which already pay less than 1/4 the share they paid in 1948) or the wealthy, will allay this uncertainty is like giving the church a big check and thinking that will keep your kid off drugs.

American jobs have evaporated mainly by emigrating off shore. As soon as off-shoring was made easier, you had to off-shore or lose to a competitor who did. Off-shoring drove prices down, and big surprise, profits followed. The crash of 2008 (another topic) added the energy to produce a perfect storm of uncertainty among consumers.

Put in place an incentive structure for keeping manufacturing jobs here, and people will begin to feel more secure. Demand will rise, and more people will be hired. That’s called a positive feedback response.

Regarding CA’s contribution to Fed revenues: if the Fed dishes out services to CA paid for with borrowed money, the fact still remains that CA paid ONE DOLLAR for every $0.79 the FED sends back. What it means is that CA makes a net payment of $0.21 into the pool, (Texas pay $0.06) while many states GET paid. Mostly, and amazingly to me, these are Red States. I find that hilarious.

Finally, my point regarding capital gains treatment of income from investing. Yes, I received cap gains treatment on the sale of my stock. I understand that investment managers regularly receive their salary as management fees, and that money is given cap gains treatment. That means they pay less than half the “income” taxes of anyone else earning the same. That’s unfair and unsustainable.

You can grieve about the big tax checks you’ve written, but it only means the financial benefit to you of operating in this state and this country was especially good. Am I right?

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» lou segal on 07.11.11 @ 01:35 AM

Andy,

You say the high unemployment in Ca. can be explained by business cycles and outsourcing of jobs overseas, but it doesn’t necessarily explain why Ca. has the second highest unemployment rate in the country. You can say this is pure coincidence, but I think it can be attributed to the inhospitable climate for businesses in Ca. and having the second highest state income tax in the country.

During the Clinton Administration I was paying approximately 55% of my income in federal, state and payroll taxes. I felt like I had one arm tied behind my back as I was trying to nurture my company while forking over half my income to the govt. As you know, it is hard enough to start a business, it is doubly hard to hire people when you lose half your income to taxes. Remember, most small business owners pay tax at the individual personal rate and an increase in the marginal rate is another obstacle for them to overcome.

We need to junk the tax code and start over. Eliminate all the deductions/loopholes and lower the rates. Besides making US corporations more competitive with their overseas counterparts, the simplification of our tax laws would save everyone considerable expense and time dealing with this byzantine system.

You indicated that you did pay the 15% capital gains rate on the appreciation of your stock. Are you suggesting that you are okay with this, but don’t want private equity and hedge fund mangers to pay the capital gains rate on carried interest. As you may be aware, they pay this rate only on the gains from their carried (general partner) interest in the investments in their funds. Personally, I think it would be a better solution to lower the marginal rates for everyone and eliminate this dual rate structure for earned and investment income.

I would have a much easier time paying taxes if I thought the govt was spending the money wisely. However, we both know there is incredible waste, fraud and abuse in the mostly unaccountable bureaucratic labyrinth that our govt has become. I worked too hard to have bureaucrats cavalierly spend my tax dollars without regard to the most efficient and effective use of this money. Anyone who has visited the motor vehicle office or the post office knows what I mean.

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» GeeWillikersWally on 07.11.11 @ 04:23 AM

Lou , if you really paid 55% of your income in taxes under Clinton and still have the same accountant, I suggest you start looking for a new one. The number you you cite was an inordinate figure to have paid, regardless of income level, and is either inaccurate or a result of poor accounting advice.

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» someguyinsb on 07.11.11 @ 12:12 PM

I found no record of Lou’s company or him registered with the SEC. There were two CA entities named Pacific Equity Investments and both are were registered to other individuals and appear to be shut completely.

Lou, you claim a lot of things but the public records indicate that you were not an owner of an investment company nor does it appear that you personally experienced with starting and operating a small business. Your experience and knowledge appears to be anecdotal. That’s rather pathetic especially when you try and bully others with personal attacks and unsubstantiated, broad statistics with no direct correlation to your argument.

Until you prove otherwise you’re just a charlatan with way too much time on his hands.

Dan, you’re even worse. If you are really the owner of a Marketing and Content company you should quit for you really, really suck at marketing. Your company has zero presence online. That’s really pathetic.

You two use your names next to your opinions but you may want to reconsider that path for your professional lives are neither impressive nor worthy of the respect you guys are so desperately seeking.

SomeGuy

PS - the speculation on who I am is laughable.

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» lou segal on 07.11.11 @ 12:43 PM

GeeW,

I was talking about income at the marginal rate. Trust me, in the 1990’s if you owned a business in Ca. and had net income greater than $250,000, it was very easy to pay more than half of your income in taxes in the top bracket. Although the tax rates for income below the top bracket were lower, it was still much higher than today. Remember, the brackets are indexed for inflation and, therefore, the rates for all income brackets were higher then. I would have to look it up, but I would have been paying a much higher average rate than today. The Bush tax cuts not only lowered the top rate, but also lowered the rates all the way down the income scale.

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» lou segal on 07.11.11 @ 02:06 PM

someguyinsb,

Nice try, but I am not going to get into a pissing contest with you. Think whatever you want, I don’t have to prove anything to you. Isn’t it hypocritical for you to remain anonymous and attack people who are willing to reveal their identities. Your ad hominem attacks say much more about you than anything else. I try to make my arguments without needlessly personally attacking anyone unless I have been subject to them. If you revealed you real name, I bet you would be a bit more civil.

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» Simone on 07.11.11 @ 03:23 PM

I have been reading this someguyinsb posts and it is obvious that we are watching a person that was raised by interacting thru a computer and not responsible parents. If you are not represented on the web you do not exist. Remember that these kinds of people have some computer skills but an emotional maturity level of a 6 year old. Quite evident by their comments. But to his comments on Mr. Petry. It took me all of 4 minutes to find quite a number of his business relationships plus I see he is strongly presented on CEO sites, business networking and advisory sites and what not. Plus he is on two boards right here in Santa Barbara. And if he wasn’t? Who cares. Some people who grew up before 1996 don’t want their lives plastered all over the place. But if you just want to use these chat rooms to post ranting attacks or poorly written immature religious BS that attempt to be cute on people that have the strength of character to use their own names then I can only imagine that your existence is empty sad and lonely with a great deal of anger at your lot in life. In other words a loser

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» GeeWillikersWally on 07.11.11 @ 06:30 PM

Lou , I am even more convinced than before that a 55% tax rate in the 90’s was either a blunder by your accountant ,the result of poor tax planning, or memory error. So convinced, in fact , that I propose a wager . You produce a convincing corroboration and I will refrain from posting comments for 2 weeks. A lack of convincing proof that such tax rates existed in the 90’s and you are gone for 2 weeks . Interested ? I’m sure lot of your Noozhawk rightwing brethren would love for you to shut me up for a couple of weeks. Whaddya say?

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» lou segal on 07.11.11 @ 07:41 PM

GeeW,

I corrected it in my last post. I meant to say at the top bracket. All marginal income for a single person in excess of $115,000 was taxed at 36% and income in excess of $250,000 was taxed at 39.6% in the early 1990’s. The CA state tax rate was 9.3% for all income in excess of $35,000 to $40,0000 (not 100% sure of the state bracket, but I know I am in the ballpark). In addition, the FICA tax was 15.3% for the first $60,000 in income. Remember, self-employed workers had to pay both the employer and employee share of FICA. Back in those years the personal exemption and itemized deductions were phased-out for high income taxpayers, which, in effect, increased the top marginal rate. When you add it all up the top marginal rate was close to 55% and for income in excess of $115,000 it was over 50%. If you don’t believe me, look it up.

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» lou segal on 07.11.11 @ 08:53 PM

GeeW,

I stand corrected - I did more research on the Ca. state tax rates in the early 1990’s, and it is worse than I thought. The highest tax rate for Ca. was 11% not 9.3%. So the combined top marginal rate for federal and state was actually higher than the numbers I cited in my last post.

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» someguyinsb on 07.12.11 @ 10:41 AM

You guys are hilarious. Armchair analysis by clairvoyant posters without a clue.

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» Wireless on 08.14.11 @ 10:26 PM

Geez, wish I would have noticed the article sooner. What a bunch of Psychcobabble and the supportive comments are even worse. Andy can rationalize our job losses all he wants but the fact of the matter is CA is pretty much last in business friendliness, near the bottom in tax and regulatory environment and near the bottom in K-12 education nationally. The numbers don’t lie, you can delude yourselves into believing otherwise but we are cutting our own throats in this state. There are some pockets of activity but nothing like it used to be, that isn’t even arguable. We’re bleeding many of our productive citizens to more business friendly places.

We have way above average unemployment which was never the case in previous recessions and the rate of companies leaving CA is disturbing and is accelerating. We used to lead the country in pretty much everything and now we lag and it is because of this “progressive” agenda of radical environmental, no growth, high regulatory, high tax and high cost policies. AB-32 anyone?

We do have tremendous advantages here in CA including great universities, huge capital and investor base, great technology centers, agricultural abundance and great weather and natural beauty and some of the best ports on the planet, we should be doing much, much better than we are right now.

So Andy, if its so great here why are we lagging so much? Why do we still have 12%+ unemployment in this state with no end in sight. Why are so so badly underperforming our past performance and also many other areas of the country? Many parts of CA are effectively in a depression. Drive up I-5 sometime.

Let me guess, its all George Bush’s fault.

Lois has vision? Please. That pretty much disqualifies anything else said. Here is a couple Lois blasts from the past, sure to impress:

Health, Liberty and Happiness:
http://www.youtube.com/watch?v=tdKlqMxdFKU

ObamaCare is a big Gamble:
http://www.youtube.com/watch?v=L7d7c225mE0&NR=1

Makes you proud of our congressional represenatative! Can’t believe all the “vision” I see exhibited here.

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» Wireless on 08.28.11 @ 10:51 AM

Andy,

So things are just great here in CA? Please explain this:

http://articles.latimes.com/2011/aug/24/business/la-fi-state-new-businesses-20110824#.Tlg2Sq20fYM.email

CA plunges to bottom in job creation.

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» lou segal on 08.28.11 @ 02:43 PM

Wireless,

I couldn’t believe this guy was suggesting the state was doing so well. Anybody with a half a brain, who has lived here for a while, knows the economy in Ca. is a mess. The tragedy is that it doesn’t have to be this way; the economic mess has been created by the knucklehead politicians in Sacramento and the localities.

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» Wireless on 08.28.11 @ 03:57 PM

The lefties are in total denial. The fruits of their handiwork are becoming more and more evident and they keep trying to explain/wish it all away. The big government, big spending, high tax and high regulation policies they have put in place are killing this state and they want to pretend its not.

The evidence is overwhelming that we are badly underperforming but they want blame it on anything other than their failed policies. Sad. Like our disaster of a President, they seem incapable of learning.

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» Wireless on 08.31.11 @ 10:31 AM

Right on cue, yet another example of this failed effort to prop up all this clean energy. Here’s a company that Obama touted just last year and today they shut the doors after over $500M in taxpayer investment:

http://www.nbcbayarea.com/news/local/Solyndra-Shutting-Down-128802718.html

Oh, and it was in CA. So Andy, we’re still waiting for some defense here about how these policies you and Capps support are working?

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» David on 08.31.11 @ 10:47 AM

Hot air. That is all you will ever get from progressives. All hat and no cattle. Clarke is doing his own part for adding CO2 to the air. Our own global warming source.

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