8. California progress In May, California voters rejected an increase in taxes to close a $26 billion budget gap. To generate more tax revenues, California will have to encourage new businesses and create jobs. With 50 percent of income tax revenues coming from the richest 1 percent of residents, the state needs lower rates.

Income redistribution has gone too far.

Source: The Wall Street Journal, July 22, 2009 Does the median voter theory explain voters’ rejection? If California lowers the highest tax rate to below the current 10.5 percent and cuts some free benefits, how might California’s Lorenz curve change?