California's Economic Mess

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California's an economic mess. The state can't pay its bills because there just aren't enough people and businesses paying taxes to pay for all the services the state supplies. Business groups blame Gov. Gray Davis (search) for increasing taxes and fees so much that thousands of small firms have relocated to neighboring states with lower taxes, thus shrinking California's tax base.

But gubernatorial candidate Arianna Huffington (search) blames businesses themselves for not paying their fair share in taxes. Now the L.A. Times reports that for the last two years, Huffington paid no individual state income tax and just $771 in federal taxes. The Times reminds its readers that she lives in an 8,000-square-foot home above Sunset Boulevard that is valued at about $7 million.

Huffington says she balanced her income against losses she incurred from the company that handles the money she makes from books and lectures. As to whether she used some of the same tax credits she blames businesses for abusing, Huffington says that any comparison between her and those whom she has criticized would be unfair.

And that's the Asman Observer.