Despite shutdowns that have devastated small businesses and caused widespread job losses, California’s wealthy elite have been doing very well during the coronavirus pandemic
According to the Associated Press, California revenues soar as the rich get richer during the pandemic.
The state is billions of dollars ahead of its tax collections projections despite many people being out of work because of covid.
And is not just in California. In the first four months of 2020, the net worths of 34 American billionaires increased by at least tens of millions of dollars each.
This weekend the AP reported
At the end of 2020, California had lost a record 1.6 million jobs during the pandemic. Nearly a half-million people stopped even trying to look for work. Business properties saw their value plummet more than 30%.
But California’s bank account is overflowing. As of January, the state’s tax collections were $10.5 billion ahead of projections. By the end of the fiscal year on July 1, Gov. Gavin Newsom and the state Legislature could have a $19 billion surplus to spend.
It’s so much money that, for just the second time ever, the state is projected to trigger a state law requiring the government to send refunds to taxpayers.
Economic downturns usually put state governments in a bind, forcing them to cut services at a time when people need them most. That’s what happened a decade ago during the Great Recession when the housing market collapsed and the stock market tanked, creating a cascade of losses from the wealthy on down.
But this time, with the pandemic forcing the closure of bars, restaurants, theme parks, sporting events and small businesses, lower-wage workers bore the brunt of the losses while the wealthier worked from home. The economic losses started at the bottom of the income ladder and so far they haven’t made their way up to the top.
Breitbart news reports: With the rich doing well, thanks to the growing dominance of Silicon Valley, the rising stock market, and the health of Hollywood’s streaming entertainment industry for a stay-at-home nation, state revenues have soared far beyond expectations.
Earlier this year, as Breitbart News and others noted, the state reported so much revenue that it is likely to be required to return some to taxpayers under a provision adopted in 1979 known as the Gann limit.