“There he goes again” – Governor Arnold Schwarzenegger (R-CA) has once again molted. This time, according to the LA Times, the “Terminator mutatum Vacillator” has shed his campaign pledges not to raise taxes:
“Addressing a community forum at a breakfast in downtown Los Angeles, the governor said he would like to raise as much as $2.5 billion in new revenue by closing ‘tax loopholes.’”
Of course, Schwarzenegger was not specific about which tax breaks he would eliminate, but boldly endorsed the framework put forth by Legislative Analyst Elizabeth Hill:
“…I totally agree with the Legislative Analyst’s Office when she says we should look at tax loopholes,” he said. “We should go after those tax loopholes. We need the extra $2.5 billion. This is $2.5 billion we could give straight to education. I am totally for that. We should go for it, and we should do it because everyone has to give something in order to make this work.”
Hill’s overall proposal for eliminating tax exemptions, by the way, includes reducing the dependent credit and eliminating the senior credit. In short, the one-time Last Action Hero will apparently rob the young and gouge the old!
The debate in the State House has begun anew this week in California, with Republicans seeking to hold the line on taxes:
“’We’re not going to waver on taxes,’ said Assembly Minority Leader Mike Villines, R-Clovis.”
When he ran in the recall election of 2003, Schwarzenegger assured California voters that fiscal sanity could be restored to the State without increasing the tax burden. Yet, the plan he endorsed calls for borrowing even more money and raising taxes higher than ever. Which is kind of like trying to sober up by going on a binge: it may make you feel better for a short time, but it only exasperates the true problem.
ALG Perspective: With California’s budget shortfall for 2008 already topping $16 billion, borrowing money and raising taxes to finance this year’s budget are exactly the wrong prescriptions for repairing its broken fiscal house. California is already strapped for cash and these anti-growth policies will only drive more taxpayers away from the State and steep it further into debt, robbing future generations of their inheritance. The best solution to overcome the fiscal crisis in California over the long-term is to expand the tax base by implementing pro-growth policies and paying down the debt, not by borrowing money and raising taxes on those likely to head for the nearest border.
