Taxes, Taxes, Taxes

As the national economy declines, President Obama seeks to stimulate the economy with a plan featuring huge federal spending on programs and projects, many of which reward his contributors and ideological supporters. The stimulus package has too much pork, too little stimulus, and too much politics.

But at least Obama knows not to institute counter-productive tax increases. (Well, except for the most successful income earning Americans, the wealthy, who pay the most in taxes and deserve appreciation, not condemnation).

Sure, some of the federal tax cuts are for those not working, and so are actually welfare checks, not likely to result in much job creation or revenue to the Government. Obama is therefore cynical to label handouts to non-workers as tax cuts. But at least the Obama team suggests it understands that tax hikes are bad public policy during a recession.

Here in California, the economic and state budget crises are also coming to a head, but California's Democrats have been pushing hard for a range of tax increases.

As predicted, warned, and feared, the Budget plan negotiated by Governor Schwarzenegger and leaders in the State Senate and Assembly, under intense negotiations all weekend, after months of contentious debate, calls for some $14 -$15 billion in higher taxes.

This would be one of the largest state tax increases in American history at a time when California is suffering from high unemployment and virtually the highest income taxes, highest state sales taxes, and highest gas taxes in the nation.

The car tax (the famous vehicle license fees that helped to end the political career of previous Governor Gray Davis) would be nearly doubled, a shock to working Californians who thought the 2003 recall had resolved that issue in favor of the taxpayer.

As California Insurance Commissioner Steve Poizner (one the 2010 GOP candidates for Governor), points out:

"With car sales plummeting, dealerships closing, and unemployment rising, it is foolhardy in the extreme to think that adding $450 in new sales taxes to the price of a car, in additional to reinstating the onerous car tax, is going to be a net economic benefit to our California economy. It won't. Instead, it will make a bad situation worse and prolong the economic pain for California families".

Republicans have been pushing for a state spending cap, dependent on voter approval, but it is tied to extending these outrageous tax hikes by three more years. The politicians have once again cynically stacked the deck so that to avoid tax hikes, one has to vote against even a modest spending limit.

Poizner continues:

"With the retail sector among the hardest hit, it is equally absurd to suggest that raising sales taxes will help restore consumer confidence and help people keep their jobs. It won't. Instead, it will accelerate lay-offs and store closures, making our economy worse, not better."

With the mortgage crisis, a stagnant service economy and ailing manufacturing sector, it is foolish to think raising taxes on personal incomes or on employers will do anything other than deepen the recession and prolong the recovery. It won't.

It is simply wrong to try and balance the budget by taxing people's misery.

And a legislature that, for years, has spent money it did not have in utter disregard of the facts, and without proposing one dime in actual year-to-year cuts, shakes people's confidence in our system. The people have every right to demand fiscal accountability first".

At the other end of the political spectrum, Democrats like Assembly Speaker Karen Bass are blaming Republicans for standing on principle and opposing huge and varied tax increases. She has lobbed rhetorical bombs at "right-wing" talk show hosts, GOP activists, and those seeking to discipline their party elected officials with talk of public censure at the California Republican Party convention next weekend, or with primary fights in 2010, if they vote for tax increases.

Do party regulars, (donors, activists, opinion leaders, worker-bees) have no role other than to support elected officials? Is it truly a one way street? Give the party elected officials donations, votes, and shoe-leather district campaign support, but not your voice on matters large and small?

Speaker Bass may not want politicians to hear from their constituents, but is that not the arrogance of power that citizens repeatedly reject?

There may be some growing agreement on one point. The 2/3rds required legislative vote for any tax increases, and for the budget, has resulted in at least some difficultly for the Democrats to ram through their tax and spend, borrow and spend, and then spend-some-more budgets.

To pass the budget, just like in the U.S. Senate, the Democrats need to pick off a few elected California Republicans, specifically three in the State Senate and three in the State Assembly.

With super majorities almost in hand, Democrats are unhappy they have to negotiate at all to pass high spending / high tax budgets, year after year.

Some smart GOPers have begun arguing that the Democrats must be held accountable for their budgets, spending, and tax hikes. The cover of bi-partisanship for these liberal politicians would be removed if Democrats "owned" the budgets, and passed them without any GOP support.

Perhaps, then, when combined with fairer legislative district drawing, Republicans would finally have a brand and an argument to bring to voters. As things stand now, Republicans are irritated at their own, while the Democrats seem immune to public disgust with the never ending high spending and high taxes.

The GOP is getting the worst of this process. There is lack of clarity that Republicans are the party against profligate spending and higher taxes and many Nanny State regulations that are strangling small businesses.

And, gerrymandered safe seats continue to reward incumbents and remove political argumentation from politics. Argumentation that is the only path for Republicans who must overcome the emotion-based pandering of Democrats.

Democrats run the legislature, and, with the agreement of a few safe-seat incumbent Republicans, benefit from the "incumbent protection" district lines, rarely to face competition at the ballot box. But they are rigging more than the electoral district lines - they have avoided clear issue / ideological / idea lines as well.

How to educate voters about the consequences of decades of big government spending, promoted and supported by left-wing ideologues and special interest lobbying and politics as usual? Make politics meaningful again and give voters something to think about when they vote for state legislators whose names and political positions they currently do not know.

The fastest rising partisan group of registered voters is Decline to State. No wonder. The parties do not clearly differ yet in the minds of the voters.

Of course, voters still vote.....sometimes with their feet. They are walking away from the highest taxed state in the union. And the best and brightest are taking jobs, revenue, and the Golden State's future with them.