Metropolitan News-Enterprise


Friday, December 12, 2008


Page 7



Taxpayers Have Been Compromising for Years




Another week, another special session of the Legislature.

 California faces a nearly $30 billion shortfall over the next year and a half and, to address this crisis, last month the governor leaned on the outgoing legislators to stay to the final hour in the hopes of coming up with a solution that included both spending cuts and tax increases.

 Because the special session ended in stalemate, the governor declared a “state of fiscal emergency” and has called on members of the new Legislature, who took office December 1, to try again.

 Although many lawmakers are carryovers from the previous session, Schwarzenegger is repeating his mantra that Democrats and Republicans must leave their ideology at the door. Democrats don’t want to cut spending and Republicans don’t want to raise taxes, he says, and the parties must reach a compromise.

 But let’s look at the facts. California already has the highest income and sales taxes in the nation. We have the highest business taxes west of the Mississippi. Only property taxes — we rank in the middle — are a comparative bargain because of Proposition 13. In total, we rank 6th, or higher, in tax burden.

 Since California is already a high tax state and spending has increased 39 percent since Arnold Schwarzenegger took office in 2003, it is clear that for years, it has been the taxpayers who have been doing all the compromising.

 The governor says everything is still on the table and he will consider any and all tax increases. He recommends a penny and a half sales tax increase, including an extension of the tax to currently untaxed services like auto repair. Also being considered is a cessation of income tax indexing.

This would mean that inflation would be allowed to push California income tax payers into higher brackets. (Because this would be in violation of Howard Jarvis’s Proposition 7, which indexed the income tax, if this method of increasing the burden is adopted, the state should be prepared for legal fisticuffs with the Howard Jarvis Taxpayers Association.

Initiatives may only be amended by a vote of the People and a “suspension” of indexing would be about as clear a violation of law as we have seen).

 Moreover, it is ironic that among the tax increase proposals the governor is willing to consider is a tripling of the car tax. If this gives you a feeling of déjà vu, it should. It was Gray Davis’ increasing of the car tax that was a major contribution to his being recalled and to the election of Arnold Schwarzenegger, who promised to roll back this despised levy.

 In 2003, Schwarzenegger’s Recall Express campaign stopped at the Orange County fairgrounds in Costa Mesa. In his speech, Arnold critiqued Gray Davis and the Legislature. “All they have done is spend, spend, spend, and when they realize they spend money they don’t even have, then it is tax, tax, tax” He said. “How crazy is that going to be to come up with this crazy idea to raise the car tax by 300 percent. We’re not going to let it happen. Let me tell you something ... it’s going to hurt the person who is a low income person who makes $15,000 to $20,000 a year. The person who is struggling to make ends meet. A person who is struggling to put food on the table for their family.”  Then, with a Hollywood flourish, he directed his audience’s attention to a white GM car with the words “Davis car tax” painted on the side. Above the car, suspended by a crane, was a wrecking ball, which was released to demonstrate his dedication to smashing any idea of tripling the car tax.

 If the governor is successful in his current effort to raise the car tax, we suggest that he be required to repeat this visual demonstration substituting the word “taxpayers” for “Davis car tax.” After all, his agenda — if fully implemented — will crush the very citizens he claimed to be defending five years ago.

(The writer is an attorney and president of the Howard Jarvis Taxpayers Association.)


Copyright 2008, Metropolitan News Company