California Bet 2% Of Its Budget On Facebook's Stock Price Remaining High

[u-Bob]

via EPJ:
http://www.economicpolicyjournal.com...budget-on.html

The state's projection for 2012 revenues is $91.3 billion, but that was made on the assumption that Facebook insider sales would bring in $1.9 billion in tax revenue. With the price of Facebook stock collapsing, tax revenues from Facebook stock sales are not going to come anywhere close to projections.

http://blogs.marketwatch.com/thetell...t-assumptions/

California state officials had been counting on a big boost to state revenues from the social networking company.

California Governor Jerry Brown?s office put the number as high as $1.9 billion, assuming that Facebook shares are trading around $35 later this year when restricted stock unit lockups end.

http://news.investors.com/article/62...k-millions.htm

A hoped-for windfall from Facebook's IPO is turning into an object lesson in the risks of soak-the-rich politics.

California has no one to blame but itself for falling short. The state is simply experiencing the extreme revenue volatility that comes naturally with its soak-the-rich tax laws.

Its top income-tax rate of 10.3% (for incomes over $1 million) puts it near the top of the scale in the U.S. It also taxes capital gains at the full income-tax rate.

Not seeming to notice that this roller-coaster revenue is a problem, Brown is pushing a November initiative that would raise the top rate to 13.3%, well above that of any other state.

The last thing California needs is more uncertainty. Brown's plan would make it even more of a slave to stock-market swings and frothy IPOs.

[xNetworx]

The Fail, it is epic

[baddog]

Jerry Brown does it again. Fucking idiots around here.

[2012]