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Terminating the Tax Phobia June 22, 2009

Posted by Dwight and Lynn Furrow in Current Events, Dwight Furrow's Posts, politics.
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I don’t often praise the San Diego Union-Tribune. Its radical, right-wing editorial stance is partly responsible for the disastrous political climate that has generated California’s budget deficit.

But on Sunday, Dean Calbreath’s column was a breath of fresh air:

Gov. Arnold Schwarzenegger’s proposal before the Legislature is to rely on cuts alone to fix the budget: $5.5 billion from health and human services, $5.1 billion from education and $1.3 billion from the court and prison systems. The rest of the money would come from one-time sales of state assets; borrowing from cities and counties (an idea that infuriates local officials); furloughs, pay cuts and layoffs of state employees; fee increases and cuts in other services.

Schwarzenegger pledged last week to veto any budget that includes new taxes beyond what he has already proposed, which largely consist of increases to the state sales and income taxes.

“To do another tax increase is irresponsible,” Schwarzenegger said.

But Calbreath describes the minor tax increases that Democrats in the legislature have put on the table that will help avoid approximately 5 billion dollars of those cuts.

 

Tax Oil Extraction

[…]California is the fourth-largest oil-producing state in the country behind Louisiana, Texas and Alaska. But despite our reputation as a high-tax area, California has never imposed severance taxes for pulling gas or oil out of the ground.

That’s a stark contrast to the other oil-and gas-producing states, most of which have double-digit severance taxes […]

Repeal Corporate Tax Breaks

[…] During the budget negotiations in February, the Legislature inserted three corporate tax breaks that resulted in a total gap of $2 billion to $2.5 billion.

Data from the state Franchise Tax Board show that one of the proposals – to allow companies to choose between two ways of being taxed in the state – would largely benefit the 0.1 percent of companies in California that make more than $1 billion per year. Much of the benefit would go to just nine companies, saving them an average of $33 million a year. […]

Another proposal, which would allow corporations to transfer taxes among related companies, would benefit just 0.03 percent of corporations, with the top six companies saving an average of $23.5 million a year.

 

Increase the auto license fee.

Schwarzenegger’s first action as governor was to roll back California’s fee on automobile licenses, which put a $4 billion hole in the budget. As the budget problems mounted last year, Schwarzenegger was forced to increase the license fee. And now the Legislature is proposing to raise it an additional $15. […]

Cigarette taxes.

The committee is proposing to increase excise taxes on cigarettes and other tobacco products by $1.50 per pack, nearly tripling the tax on a pack of cigarettes from 87 cents to $2.37. This proposal would increase revenue by an estimated $1 billion next year.

Schwarzenegger claims it would be irresponsible to increase taxes, despite the fact that they will affect very few Californians. Somehow slashing public health and safety programs, plundering local government, gutting K-12 and higher education, and laying off thousands of state workers is responsible?

It is ironic that Schwarzenegger at the end of his political career is reprising the film role that launched his career as a celebrity—the predator in Terminator 1.

 

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