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10.01.2008 0

Tax-hike disarray

  • On: 10/15/2008 10:39:08
  • In: Taxes
  • ALG Editor’s note: The following featured editorial covers an issue that ALG News has referenced on several occasions. If the California legislature would simply take ALG’s advice, and cut spending, they could balance the budget without raising taxes.

    Perata, Bass can’t even persuade fellow Dems


    July 1, 2008

    For four months, Democrats from Senate President Don Perata on down have said the time for budget gimmicks is over and that the state needs higher taxes to pay for vital programs. In a May interview shortly after taking over as Assembly speaker, Los Angeles Democrat Karen Bass spoke matter-of-factly about a wide variety of tax increases – including ending some of Proposition 13’s protections against huge property tax hikes on commercial parcels during housing bubbles. Perata and Bass scoffed at talk the public would oppose such new “investments.”

    Now, however, it is the first day of fiscal 2008-09 – and Californians not only don’t have a state budget in place, we’re still waiting on Perata and Bass to actually offer specifics on what taxes they want to hike to cover the $11 billion gap this fiscal year between Democrats’ proposed spending and anticipated state revenue.

    How does this make the slightest sense? If Perata and Bass truly are confident the public can be convinced that the time has come for higher taxes, then why aren’t they specifying which taxes and then vigorously making their case? Fiscal 2008-09 is under way – don’t they understand that the sooner the tax debate gets into gear, the better the chances are that the state will have a budget in place by Labor Day?

    We can only come up with one explanation for this baffling indecision: Perata and Bass can’t even persuade Democrats in the Legislature to agree to a tax-hike plan.

    “I think that’s what we’re seeing,” Assembly Republican Leader Mike Villines of Clovis said in an interview yesterday. Villines noted some Democrats don’t like raising the state sales tax – considered by some to be a less difficult sell to the public – because its regressive effects would most hurt low-income households. But he said even Democrats ready to sock it to the wealthy understood “you cannot tax the rich enough to cover” most of the $11 billion gap.

    So the obstacle to raising taxes doesn’t just lie with picking up enough Republican votes to pass the two-thirds threshold in the Legislature. Majority Democrats apparently can’t even agree among themselves on what taxes should be raised.

    This disarray must infuriate the public employee unions that fund Democratic candidates and that have reflexively called for higher taxes for almost as long as they have been in existence. But for most Californians, it’s great news. It suggests that even union-beholden Democrats realize that most voters believe Sacramento’s problem is overspending, not under-taxation.

    It also suggests that a surprising number of Democrats just might go along with constitutional reforms proposed by Villines and by Gov. Arnold Schwarzenegger to limit future spending growth.

    Such a measure would reduce the perennial pressure Democrats feel to raise taxes. It’s a pressure that a growing number appear to resent.

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