Tag Archives: Cal Chamber

Right-Wing Tax Solutions

We have become so used to the rabid anti-tax politics of the right-wing, in thrall to the Club for Growth and the Howard Jarvis Association, that we might have forgotten that they have other ways to use the budget to destroy working Californians and the public services they depend on.

Such is the case with a recent op-ed from the California Foundation for Commerce and Education which is, as Shane Goldmacher notes, the California Chamber of Commerce’s think tank. The op-ed ever so gingerly floats the idea of raising taxes to close the budget deficit:

Yet, as with the securities markets, common sense must prevail against principle if critical public services are at risk.

It is simply implausible that we can solve in a single year a deficit problem unaddressed for years without devastating important education, public safety and safety net programs.

But this comes at a price:

Any budget solution – but especially one purchased with new taxes – must unshackle elected officials to set priorities: repeal automatic inflation adjustments, cap guaranteed benefit programs, reopen union contracts that automatically boost wages (including in school districts) and at long last control future public employee health care and retirement obligations.

And a budget solution that includes tax increases must be accompanied by education reforms that improve performance of programs that spend half of state revenues and are critical to California’s economy.

Any tax increase should be legislated as a stop-gap measure that would be temporary. Taxpayers should be made whole during the upside of an economic cycle if they have been tapped for help during the downturn.

In other words, we can have some temporary tax increases to help close the budget but ONLY if we tie this to yet another attack on those public workers we hate. Accomplish Grover Norquist’s anti-government agenda by cleverly tying it to desperately needed new revenues.

For example – repeal inflation adjustments and cost of living increases? That is not a very smart solution in this age of increasing inflation. It would set public workers even further behind the cost of living and push them out of the middle class entirely, thereby hurting the state’s economy. The “control health care costs” language is code for “cut health benefits,” as is “cap guaranteed benefit programs.”

In this scenario, public services would be impacted anyway, as they would be locked into a downward spiral, prevented from catching up to real-world costs and real-world needs. It might stave off collapse of some of the public services threatened in this year’s budget, but only by a few years – this concept would accomplish the same goal over a slightly longer timeframe.

And “taxpayers should be made whole?” This sounds like a recipe for sending checks to taxpayers when the budget picture recovers – which would simply continue the real problem with the state budget, which is a decades-long hollowing out of our revenue streams by ill-advised tax giveaways during the good years.

Unfortunately this plan may not be limited to a think tank op-ed. Goldmacher again:

That position — advocating new, if temporary, taxes in return for budget reforms — is where many are speculating the governor is headed, especially with his shifting rhetoric about taxes, loopholes and fees.

That would not surprise me in the least, and would complicate the budget fight even further.