As tensions escalate between California and the Trump administration over immigration, another potential battlefront is emerging over taxes.
The spat began with reports that the Trump administration is considering cutting funding for California’s university system, the largest higher education system in the nation with about 12% of all U.S. enrolled students.
In response, Gov. Gavin Newsom wrote Friday afternoon in a social media post that California provides about $80 billion more in taxes to the federal government than it receives in return.
“Maybe it’s time to cut that off, @realDonaldTrump,” Newsom said.
Ok, this is an idea I had after reading numerous comments on this post. You’re all asking how this would work … hear me out.
California declares its own currency, the “California dollar”. Wages earned in California dollars wouldn’t be taxed like US Dollars.
There are some issues to work out; I think the IRS does tax your foreign assets … some … but I think that this scheme could work.
Economically, it would be an uphill battle. The US dollar is strong because it’s backed by decades of sound monetary policy (that will go right out the window when jerome powell’s tenure is up) and a AAA credit rating for treasury bonds (that will disappear when the Republicans in congress finally drive us off a cliff) . A Californian dollar would be untrustworthy for a while as its central bank would need time to build trust
What if they got into a monetary union with Canada and linked Calidollar with the Canadollar with the same value and entirely interchangeable the way the Belgian and Luxemburg franc used to work?
Could provide legitimacy, but when currencies cross borders it becomes more difficult to manage them politically. The Euro is messy because monetary policy that helps Germany may not help Italy
Soundish monetary policy. In the end it’s a fallacy that has never even been tried on a theoretical level. We just did it and people were like, ok. We’ve been kept afloat by monetary and military threats. The policy makes no sense on any level, that infinite debt is perfectly fine or normal.