Which is to say: as predicted by me. I had a feeling that California's surprisingly high tax revenues in January were due to people rushing through existing taxable transactions before that state's new rates kicked in; and lo! ...I seem to have been correct.
The surge of revenue that showed up unexpectedly in state coffers last month may well be offset by a revenue dip in coming months, according to Gov. Jerry Brown's administration.
[An official California Budget office cash] report says the extra money was "likely the result of major tax law changes at the federal and state level having a significant impact in the timing of revenue receipts."
Translation: it turns out that people - as usual - make their financial decisions via rational self-interest. Give them a choice to legally avoid paying higher taxes, and it looks like they'll take it. Also: amazingly, people are a lot more conservative about their own money than they are about everybody else's.
Not much else more to say, except of course I can't wait to see California raise taxes again in order to try to keep squeezing revenue out of its electorate. And do you know who else can't wait? That's right: Texas. Hey, it's not the Lone Star State's fault that California seems so determined to test the Blue Model to destruction...
CA budget windfall an "accounting anomaly?" j.mp/UEIaSx
— Jay Cost (@JayCostTWS) February 19, 2013
Hot Air also brought out the schadenfreude. As is only right and proper.
Moe Lane (crosspost)