Atkins Proposes $1.8 Billion Tax on CA Drivers

For the second time in as many weeks Californians got the news that Sacramento politicians are proposing yet another big tax hike.  The truth is that new taxes would never be required were it not for Sacramento’s mismanagement of existing tax dollars.

Last week, it was the proposal to deal with the very real problem of “revenue volatility” in California’s tax structure with the very unreal “solution” of a $10 billion tax on services.

But the latest proposal comes from new Senate leader Toni Atkins who proposes a brand new tax on drivers to pay for highway and road repairs in California.  This new “fee” would take $1.8 billion dollars out of the pockets of hard working California citizens over the next five years.

Now, most Californians would wholeheartedly agree that our roads are in terrible shape.  Years of neglect have resulted in a highway system that, according to a recent state report, requires a massive infusion of $59 billion.  But taxpayers have a very good question that has yet to be answered:  How is it that California has the highest gas tax in the nation and yet cannot keep its roads in decent condition?

Moreover, although the exact nature of this new “fee” has yet to be determined, Senator Atkins’ comments in proposing the new revenue source can only be described as foolish and insulting. Here is what she said:  “California cannot have a strong middle class or a thriving economy if our roadways are congested and people and goods cannot move efficiently.”

Really?  A left-wing politician now claims that this new tax is needed to protect the middle class?  She is simply blind to the truth that the progressive policies of heavy taxation and over regulation are crushing the middle class in California.  As is so common now in California, statements from politicians such as Atkins reveal a profound disconnect between their pampered lives and the lives of ordinary citizens.

So, instead of slamming Californians with another tax hike, what is a better way to meet the funding needs for our crumbling highway system?  Glad you asked.

First, let’s demand that gas tax revenues pay for roads, not bike lanes, environmental mitigation programs and mass transit.  The latter programs are all well and good, but gas taxes should go for roads.  (For purposes of full disclosure, as a cyclist I support bike lanes.  But I don’t want my gas taxes paying for them).

Second, how much of our transportation dollars are wasted on burdensome labor restrictions?  So-called “Project Labor Agreements” add between 25 to 35% to the cost of highway construction. Let’s get rid of PLA’s and, while we’re at it, “prevailing wage” laws which also add to the cost of construction unnecessarily.

Third, let’s direct valuable transportation dollars to those systems that actually work.  This would mean abandoning the doomed-to-fail High Speed Rail Project that is sucking up tax dollars in a way that voters never approved.

Fourth, we can agree that gas tax revenue has fallen a bit short of expectations because cars are now more fuel efficient.  But if that is the case, why does the state still subsidize electric vehicles? Shouldn’t we abandon those subsidies and direct those dollars to filling potholes?

Instead of reflexively demanding higher taxes, our elected officials should do what other states seem to do without controversy – prioritize spending.  Now there’s a novel concept.

Jon Coupal is president of the Howard Jarvis Taxpayers Association — California’s largest grass-roots taxpayer organization dedicated to the protection of Proposition 13 and the advancement of taxpayers’ rights.

Originally published at HJTA.org

Taxing Services a Bad Move For CA

There is a clamor in Sacramento for “tax reform.” But for every political pundit, politician and bureaucrat in the room, there is a different definition of “tax reform.”

For fiscal conservatives, tax reform means tax cuts. The state of California takes too much of our money now and this heavy tax burden unquestionably hurts working families and hinders economic growth.

But for self-styled “progressives,” tax reform means even more tax hikes to feed an ever growing government and the demands of tax hungry special interests.

Because these two visions of “tax reform” are polar opposites, is it even possible to agree on anything related to changing California’s tax system?  Surprisingly, the answer is yes.

Both conservatives and liberals have at least acknowledged that California government is too reliant on revenue that fluctuates wildly.  In other words, there is some agreement that the mix of things that are taxed might be altered so that tax revenue is more predictable.

The desire to address revenue volatility is understandable.  Indeed, a commission was created by former Governor Schwarzenegger to address this very issue.  Unfortunately, the commissioners themselves could not agree on a solution.

Now, newly elected state Senator Robert Hertzberg has proposed that California start taxing services, not just sales of physical goods.  The reasoning behind Senate Bill 8 is that services make up a much larger slice of today’s economy than in the past and in order to have a “balanced” tax system, we should consider expanding the tax base to things like car repair, legal services, kids piano lessons and dry cleaning.

But taxing services is a bad idea for California.  First, such a levy would have a depressing effect on California’s service economy.  It is a simple fact of economics that when you tax something you get less of it.

Second, and somewhat related to the first, is the ability to avoid the tax by exporting the service.  For example, one can avoid California’s tax on accounting services simply by hiring an out of state accounting firm.  And speaking of avoiding the tax, unlike a sales tax where there is an inventory of physical goods that can be tracked, it is much more difficult to ensure compliance with a tax on services.  California already has a massive problem with tax avoidance due to the huge percentage of the economy that is “underground.”  A tax on services would drive even more economic activity into the shadows.

Some respected tax experts have not rejected out of hand the notion of extending a tax to services but only if done incrementally and in a manner that does not result in a net tax increase.  And here is where the Hertzberg proposal is especially flawed.  Rather than extend the tax to services and lowering the tax rate on both sales and services so the proposal is “revenue neutral,” SB 8 has no provision for lowering the rate.  So what is the tax hit on Californians?  It is estimated to be $10 billion annually.

Last week, a Wall Street Journal article noted how several states in America are now cutting taxes to stimulate economic growth and provide needed relief to their citizens. But the ruling class in California apparently wants to head in the opposite direction.

Taxpayer advocates should always be prepared to discuss legitimate tax reform. But, at this point, Senate Bill 8 doesn’t qualify.

Jon Coupal is president of the Howard Jarvis Taxpayers Association — California’s largest grass-roots taxpayer organization dedicated to the protection of Proposition 13 and the advancement of taxpayers’ rights.

Originally published by the HJTA

Public Sector Pay: Transparency and Perspective

Public sector labor leaders in California would rather that the public remain relatively ignorant about how well their members are compensated. But they are fighting a losing battle.

Because of California’s massive unfunded pension liability and other scandals, the public is demanding answers. Interests as diverse as taxpayer groups, business organizations, the media and some elected officials have moved aggressively, not only to address these problems, but also to ensure that there is much greater transparency about public sector compensation than we have seen in the past. For example, attorneys at Howard Jarvis Taxpayers Association won several Public Records Act lawsuits against government interests — mostly at the local level — who were attempting to shield their compensation data from the public. And PensionTsunami.com is a website which for years has been a clearinghouse for articles on pension abuses.

california spending transparencyBut it is not just conservative interests who are shining the light. Left of center newspapers like the Sacramento Bee and San Jose Mercury News, have fought very hard to expose the truth on employee compensation. Self-styled progressive John Chiang developed a powerful data base open to the public about state worker pay when he was California’s Controller. He is now the State Treasurer and we hope he continues his efforts.

Public sector labor is pushing back against all this disclosure asserting that compensation is not excessive in California. For example, they recently claimed that pension benefits are comparable to Social Security payouts. But a new study by Robert Fellner, Research Director for TransparentCalifornia.com, shows that some retired public employees are receiving five times as much in pension benefits — mostly at taxpayer expense — as comparable private sector retirees receive from Social Security. The objective here is transparency, not a war against public employment. We all know someone who works for government and many are extremely competent in their jobs and deserve the pay they get. But there are several aspects of public sector compensation that aggravate taxpayers.

First is the lack of accountability. Taxpayers would gladly pay the highly competent more if government managers were empowered to fire the incompetent, indolent and criminals. Taxpayers and parents chafe at the fact that school districts can’t even fire child molesters without jumping through bureaucratic hoops costing much in both time and money.

Second, citizens are very concerned about how much of public sector compensation will be assumed by future generations, especially pension benefits and guaranteed health care for life. This is not a legacy of which we should be proud to leave our children.

Third, the personnel practices in government are totally out of sync with the private sector.  Just last week, theCenter for Investigative Journalism reported that thousands of state workers are hoarding vacation time. Unlike the vast majority of workers in the real world, some state employees will be able to cash out their vacation time worth hundreds of thousands of dollars when they retire.

Fourth, generous compensation for public employees would be far more palatable if others were doing well. But they aren’t. California continues to have one of the highest unemployment rates in the nation and we rank number one in poverty. The economic recovery, trumpeted by political leaders in Sacramento, is shaky at best as many have simply given up looking for work. While so many Californians have seen a decrease in income and opportunity, businesses large and small continue to flee the state to escape high taxes and costly regulations.

Transparency and a more realistic perspective toward public sector compensation will be critical to California’s future. It is simply not healthy to have one segment of the citizenry treated as a protected class to the detriment of everyone else.

Jon Coupal is president of the Howard Jarvis Taxpayers Association — California’s largest grass-roots taxpayer organization dedicated to the protection of Proposition 13 and the advancement of taxpayers’ rights.

VIDEO: Jon Coupal on the California State Budget


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California state spending has increased 30 percent in the last five years, even with the recession. The Howard Jarvis Taxpayers Association is concerned about the level of spending and the level of debt.

Do Newer Technologies Threaten High Speed Rail?

So many lies were told to convince voters to approve the High Speed Rail project six years ago, that most Californians have soured on it. They are appalled that the estimated cost to build, the time to build, the time between destinations and the price of a ticket have all nearly doubled since voters approved a $10 billion bond to kick start the project.

Add to this that the private investment that backers promised would limit taxpayers’ liability is nowhere to be seen and it is little wonder that even the former Chairman of the High Speed Rail Authority, respected independent Quentin Kopp, has excoriated the project as it has morphed into something wholly unrecognizable from what the voters approved.

It is somewhat ironic that Governor Brown, who fancies himself as a futurist (as Governor in the 1970s he thought California should have its own satellite) wants to commit Californians to spending billions of dollars on what is increasingly apparent to be an aging technology. Today’s futurists and tech savvy interests are suggesting that investing in High Speed Rail might be tantamount to buying stock in a chain of blacksmith shops in 1910 just as the automobile began replacing the horse as the dominant form of personal transportation.

The first successful powered railroad trip is said to have taken place in the United Kingdom in 1804. More than two centuries later, the train remains the best way to move large quantities of heavy goods. But for moving people, is the huge amount of capital investment in equipment and track that impedes the crossing of vehicles and pedestrians, destroys neighborhoods and farmland, and degrades wildlife habitat, really essential?

Elon Musk, who heads successful high-tech companies Tesla Motors and SpaceX, believes there is a better way to move people. Musk favors the Hyperloop, or something similar, that would whisk travelers between San Francisco and Los Angeles in as little as 35 minutes. Compare this with a drive time of six hours, a bullet train time of about four hours, and an hour by air.

The Hyperloop is a hovering capsule inside a low-pressurized tube, supported by pylons, which can reach speeds of up to 760 mph. According to Hyperloop CEO Dirk Ahlborn, within about 10 years and with about $16 billion, Hyperloop could become a reality. He believes it would it would be easy to put together, the challenge is to come up with a good business model.

As with High Speed Rail, there are many unanswered questions and hurdles with Hyperloop. However, it does appear to be cheaper, faster and able to be completed more quickly than the bullet train and would be less environmentally intrusive.

Moreover, for taxpayers, it doesn’t appear that public dollars are being spent on the design of this project. Unlike High Speed Rail, the Bay Bridge and the Twin Tunnels projects, keeping this project in the private sector – at least in the concept and design stage – is resulting in some fairly notable progress in a short period of time.

In addition to the Hyperloop concept, rapid advances have been made with driverless cars. Fuel efficient personal vehicles directed by computers show great promise and the technology is no longer theoretical. Google has already built a prototype. And best of all, they can operate on an existing infrastructure project which we call roads.

High Speed Rail’s cost dwarfs all other public infrastructure projects by many factors.  Before we commit more money to this project – whose funding is very much in doubt – shouldn’t we be sure there isn’t a better and cheaper alternative?

This article was originally published on HJTA.org

Jon Coupal is president of the Howard Jarvis Taxpayers Association — California’s largest grass-roots taxpayer organization dedicated to the protection of Proposition 13 and the advancement of taxpayers’ rights.

California Comeback or Continuing Crisis?

As the California Legislature reconvenes this week for the new session, Californians will hear two decidedly different messages from both politicians and political pundits about the “state of the state.”  Governor Brown will surely tout the “California comeback” and argue that the state is in much better fiscal health than just a couple of years ago.  On the other hand, more conservative voices will argue that California remains in fiscal crisis, that our system of governance is still fundamentally flawed and that those who believe the state is on the right track are simply fooling themselves. So who is right, the “declinists” – as Governor Brown has labeled some of us in the latter group – or the “delusional” in the former?First, in the “comeback” camp, there is no denying that California is enjoying the benefits of the national economic recovery. This rebound has resulted in much more than anticipated tax revenue for state coffers. In fact, for fiscal 2014-15 the Legislative Analyst is projecting an additional $2 billion.

Second, Brown will contend that we have already made substantial progress in dealing with the vast amount of accrued government debt racked up in the last decade. To his credit, Brown has at least laid out a game plan for some – but not all – of the pension obligations by requiring that public school teachers pay more into their pension fund known as CalSTRS. Moreover, the red hot stock market has – at least temporarily – made a significant dent in the unfunded liability of the state’s pension funds

Third, while not the hard spending cap based on inflation and population that fiscal conservatives would prefer, the passage of Proposition 2 in November enhanced the efficacy of the state’s “rainy day” fund. California’s most significant fiscal problem is the over-reliance on a fraction of California’s population – the wealthy – to pay the lion’s share of tax revenue. This results in wild swings in revenue depending on how the wealthy are doing. Proposition 2 was designed to smooth out the peaks and valleys of revenue so that we might be better prepared when the next inevitable recession occurs.

The opposite of this optimistic view is the “declinists/naysayers” camp whose adherents believe that California remains in fiscal crisis.  Sure, the economic recovery is making things look better temporarily, but this is no more than putting a coat of paint on a decrepit house with a crumbling foundation.

The list of metrics supporting the naysayers is impressive.  California ranks number one in poverty out of all 50 states.  Nearly a quarter of the state’s 38 million residents (8.9 million) live in poverty.  Business flight out of California to more business friendly states like Texas, Arizona, Nevada and Utah is accelerating.  The tax hikes approved by voters via Proposition 30 slammed California’s wealthy with a huge retroactive income tax hike.  Their response has been to vote with their feet and move to more favorable climes such as Texas & Nevada which have no income tax at all.

There remains a broad consensus that California’s tax structure is irrational.  Rather than lowering taxes which would make California more competitive, the response from the political left is to propose a new tax on services.  Given that California already has the highest income tax rate in America as well as the highest state sales tax rate, any tax “reform” that seeks to generate billions in new revenue will sink California even further.

Recent reports from the Los Angeles Times, no bastion of conservatism, note that millennials – the youth we need for economic survival – can’t afford housing in California and are moving out of state to escape anti-growth regulations which unnecessarily double the cost of a home or apartment.    The Times also reported that the same out migration is occurring for the poor and middle class.  And speaking of the middle class, they are about to be hit with a one-of-a-kind gas tax – imposed only by California – that will make fuel costs even higher.

A comprehensive list of California’s governance problems would fill volumes and can’t be recounted here.  Suffice it to say, however, that those of us who have been labeled as “declinists” have a firmer grip on reality that those who believe that California’s natural beauty and weather will overcome all problems.

To be clear, those of us who possess a realistic grasp of the magnitude of challenges facing the Golden State do not believe that California is a bad place.  To the contrary – it is a great state with a great deal of potential.  The only question is whether our elected leadership will allow the citizens of California to pursue happiness as they see fit unshackled by foolish and counterproductive government policies.

This article was originally posted on HTJA.org

Jon Coupal is president of the Howard Jarvis Taxpayers Association — California’s largest grass-roots taxpayer organization dedicated to the protection of Proposition 13 and the advancement of taxpayers’ rights.

Tax Hikes Loom for 2016 Ballot

Although it may seem far in the distant future, there has been a great deal of speculation regarding what ballot propositions might appear on the 2016 General Election ballot in California.  Focusing on just those proposals having the potential for real harm to taxpayers, here is our short list:

SALES AND INCOME TAX EXTENSION — An extension of the temporary sales and income tax increase voters approved with Proposition 30 in 2012 is being advocated by public sector labor leaders.  The proponents will argue that, since Californians are accustomed to paying these higher rates, it should be more palatable to voters to make these tax increases permanent as opposed to some “new” tax.

OIL SEVERANCE TAX — An oil severance tax – taxing petroleum as it is extracted – is likely to be advanced by those who see an opportunity to soak an unpopular industry. They will count on the public not noticing that these taxes will be passed on to California drivers in the form of higher gas prices.

SPLIT ROLL PROPERTY TAX — Those on the far left are salivating over the prospect of an increase in property taxes for commercial property.  This attack on Proposition 13 would split the tax roll so that business property will pay much more. The impact on small business and jobs will be glossed over with the usual platitudes like, “It’s for the children.” They will totally ignore that higher taxes on businesses are passed through to consumers in the form of higher costs for goods and services.

TOBACCO TAX — A tobacco tax is also in the offing.  The state tax on a pack of cigarettes is 87 cents.  Those wanting more tax revenue would like to add another two dollars and will probably also claim it is a blow for public health because it will help smokers quit.  Even if one opposes smoking, it has to be acknowledged that tobacco taxes are highly regressive as well as leading to more black market commerce which, by the way, goes untaxed.

LOWERING OF THE TWO-THIRDS VOTE FOR BONDS AND/OR PARCEL TAXES – Of greatest concern to California homeowners is the possibility that the two-thirds vote requirement for local bonds and parcel taxes will be eliminated.  These levies are repaid only by property owners.  How realistic is this threat?  Considering that, for the first time since Prop 13 was passed in 1978, a house of the California legislature actually passed this anti-13 proposal (ACA 8) the threat is very real.

BAG TAX – The “bag tax” – a charge on single use bags – is actually not a tax increase proposal. Rather, this tax was enacted by the legislature but is now subject to repeal via the referendum power by those opposed to the tax. The tax reflects “nanny government” at its worst.

Here are a couple of observations about this potential tax “tsunami” at the ballot box. First, the threat from anti-taxpayer initiatives is even higher than in prior years because, for 2016, it is much easier to qualify initiative measures generally.This is due to the fact that the signature requirement is based on the most recent election’s voter turnout. 2014’s historically low turnout means that initiative measures now need far fewer signatures to qualify than in previous years.

Second, what happens if all these tax hikes appear on the ballot?  Would this be the ultimate “Dooms Day” for taxpayers?  Perhaps.   But, in an odd way, it might be a positive development. By overreaching and asking for the moon, the tax-and-spend crowd might ensure defeat of all the measures as voters begin to add up how much these proposals, in the aggregate, are going to cost.

Third, while Californians in the last election were fairly generous in passing local tax measures, this does not necessarily translate into support for state tax hikes. Voters’ recent support for Proposition 30, discussed previously, was based on a perceived crisis for education if the taxes were not approved. Plus, the hikes were sold as “temporary.” Those conditions are not currently present. Californians are increasingly aware that we live in a high tax state and resistance to higher taxes will be high for the foreseeable future.

In any event, expect to see the groundwork laid for these and other tax raising initiatives very soon.   It will be important for taxpayers to pay close attention and to keep a tight grip on their wallets.

Jon Coupal is president of the Howard Jarvis Taxpayers Association — California’s largest grass-roots taxpayer organization dedicated to the protection of Proposition 13 and the advancement of taxpayers’ rights.

This article was originally published on HJTA.org

The Ever Shrinking Homeowners Exemption

During the holidays, most Californians are focused on their homes.  This is the time when homeowners – and renters too – are decorating and extending hospitality to friends and neighbors.  But heavy taxes and fees imposed on homes by the Grinches in government make it hard for Californians to hang on to their homes .

Homeowners, who work hard to pay for and maintain a house, pay property taxes that often do not fund property related services. These revenues go into local government coffers and can be spent for any purpose.  To pay for services to property, like sewer, water and refuse collection, the homeowner pays extra through fees, assessments and other charges added to the property tax bill. Additionally, homeowners throughout California are also hit hard with bonds.  Virtually all bonds for schools that must be repaid by property owners pass due to Proposition 39 that reduced the two-thirds voter approval requirement to 55 percent.

Even now, there are lawmaker Scrooges in Sacramento who want to make it even easier to load up your property tax bill even more. They argue that because of Proposition 13’s low property tax rate, they should be allowed to squeeze more from average homeowners by making it much easier to increase local taxes.  They ignore the fact that while the property tax rate may be lower than in many states, because the median price of a California home now stands at about $450,000, while nationally it is at $208,000, what the homeowner actually pays is comparatively high.  (California is in the top third of states in per capita property tax collections).

One of the few benefits to homeowners in California – besides Prop 13 – is the Homeowners Exemption.  This exemption simply lowers the taxable value of a primary residence by $7,000, which translates into a paltry $70 reduction in a homeowner’s tax liability.  Not only is the amount of tax savings negligible, the Homeowners Exemption hasn’t been adjusted since 1972.  If the exemption had been allowed to keep up with inflation, today it would be way higher – at least $35,000 for a saving of $350.  And if inflation were based on the increase in California housing costs, it would be even higher still.

The 1972 bill — SB 90 authored by Democratic Senator Ralph Dills and signed by Republican Governor Ronald Reagan — that established this homeowners exemption amount, also included a renters tax credit that allowed the renter to deduct from $25 to $45 from their income tax.  Here, too, state government has been a piker.  Today, the income tax credit sits at $60 for single renter or $120 for head of household or married couple filing jointly.  While at least here there has been a modest increase, it does not come close to keeping up with inflation.  Had it been indexed for the CPI, the $25 credit of 1972 would be $140 today.

It’s past time for our political elites to acknowledge the high cost of owning and maintaining a home as well as the sky high rents in many communities, by addressing these human concerns with an increase in the Homeowners Exemption and the Renters Tax Credit.

The tax-and-spend lobby in the Legislature and all those who receive a check from the taxpayers will say that they cannot afford any loss of revenue.  They will confirm the old saying that taking a dollar from a bureaucrat is like taking a piece of raw meat from a hyena, a lot of shrieking ensues. But with the Sacramento politicians bragging about the increase in state revenues that is billions ahead of projections and has resulted in a surplus, they can afford to leave a few bucks in taxpayers’ and renters’ pockets, money that can improve the quality of life for average Californians, money that, when spent, will help to stimulate the economy.

It is long past time to provide some well-deserved relief to those who are struggling to keep a roof over their heads while trying to keep up with constant additions to their property tax bills, as well as to those straining to pay escalating rents.

Jon Coupal is president of the Howard Jarvis Taxpayers Association — California’s largest grass-roots taxpayer organization dedicated to the protection of Proposition 13 and the advancement of taxpayers’ rights.

This piece was originally publish by HJTA.org

The Prop. 30 Tax Hike Should Retire on Schedule

No matter how high taxes are increased, it’s never enough for public officials and bureaucrats who live off taxpayer funded paychecks.  According to these people, there is always one more dollar that is needed to make government “whole.”  And being made “whole” in California means maintaining the highest paid government employees in all 50 states.

So it should come as no surprise that the tax-and-spend interests have already begun banging the drum and shaking the tambourine on behalf of extending Proposition 30, the “temporary” tax increase approved by voters in 2012.  Proposition 30 imposed the highest income tax rate in America.  It also bumped up the sales tax – a tax that hits lower income families particularly hard — to tops in the nation.

The sales tax component of Proposition 30 is set to expire at the end of 2016 and the higher income tax rate will sunset in 2018, so those who feed off taxes are starting to panic.

During the last year, some lawmakers resisted putting Proposition 2 on the November ballot because it required the establishment of a rainy day fund to tide government over through lean times.   These Sacramento politicians were concerned that if it passed, and the state had money in the bank, it would be more difficult to make the case that the Proposition 30 taxes should be made permanent.

State schools chief Tom Torlakson came out for the extension of Proposition 30 long ago, and we are now seeing the head of one of the state’s two major teachers unions, the California Federation of Teachers, calling for its continuation while maintaining it is not enough.

Of course, it’s never enough.

Writing in the Sacramento Bee, teachers union president Joshua Pechthalt attempts to make the case that the temporary tax hike should be extended.  He justifies his position by claiming California is thriving and upper income individuals, unfazed by the higher taxes, are happy to stay and pay.

Not so fast.

While Pechthalt believes things are fine now that our economy is supposedly in a “recovery,” working families aren’t seeing it. Our unemployment rate is the third highest in the nation and the US Census puts our supplemental poverty ranking at worst in the country.

Pechthalt’s evidence that Proposition 30 has not impacted high income individuals seems to be that wealthier communities, like Beverly Hills, have not become ghost towns.

Objective real estate reports from Nevada and other low or no income tax states make it clear that California has indeed lost many upper income taxpayers because of Proposition 30.  The Wall Street Journal reported that “many Californians have arrived [in Nevada] in the wake of Proposition 30.  Passed at the end of 2012, the measure hiked personal income and sales taxes.”  The San Francisco Chronicle published a piece in January of this year entitled “State leaders closely watch migrating millionaires” noting that “whether you sympathize or not, millionaires’ migrating out of California has serious consequences to the state’s bottom line and is something state leaders are watching closely.”

The other problem with the union leader’s thesis is that we simply don’t know how many of California’s high earners decided to absorb the confiscatory tax rates for a couple of years knowing that they would eventually expire.  If made permanent, the existing millionaire out-migration could very well turn into a torrent.

So, instead of asking whether we should make Proposition 30’s temporary tax hikes permanent, a better question would be whether those tax hikes were needed at all or, better yet, did they inflict more harm than good?  There is compelling evidence that California would today be grabbing a bigger slice of the national economic recovery had it not passed Proposition 30 at all.

Jon Coupal is president of the Howard Jarvis Taxpayers Association — California’s largest grass-roots taxpayer organization dedicated to the protection of Proposition 13 and the advancement of taxpayers’ rights.

This article was originally published by the Howard Jarvis Taxpayers Association.

For What Are Taxpayers Thankful in 2014?

“In this season of Thanksgiving, please don’t blame taxpayers if they are distracted by the injuries being perpetrated against them by our political class.”  These words were the preface of this column at the beginning of the holiday season in 2008 and, sadly, little has changed.  In fact, in many ways taxpayers are worse off now than they were then.

Six years ago, California’s tax burden was ranked 6th nationally.  Today we trail only New York as the worst state for taxpayers.   We now rank first in state sales tax, first in marginal income tax rates, first in gasoline tax and, even with Proposition 13, we rank in the top third in per capita property taxes.  Because Proposition 13 makes it harder for California to overtake New York as our nation’s number one taxpayer hell, one can expect new efforts by Sacramento politicians to undermine its protections in the new legislative session.

Some of our state leaders like to chirp happily about California’s declining unemployment rate, but only three states are worse off and our 7.3 percent rate is much higher than the national rate of 5.8 percent.  Still, all these figures are suspect because they do not count the discouraged who have stopped looking for work entirely.  And even those counted include many part-time workers for whom the best holiday gift would be finding fulltime employment.

Then there is the constantly growing, and largely ignored unfunded pension liability now estimated at several hundred billion. It stood at $6.3 billion just a decade ago.  As more government workers retire, this debt will come due and will have to be addressed by either reduced public services or tax increases or both.  The pressure for new revenue to support the retired workforce will provide an additional incentive to politicians to demolish Proposition 13’s taxpayer protections.

Nonetheless, while elected officials may be planning to put coal in taxpayers’ stockings as we approach Christmas, there are a few things for which we can all be grateful.

First is Proposition 13, which limits annual increases in property taxes and forces the tax raisers in the Legislature to get a two-thirds vote of their colleagues to raise state taxes.   We at the Howard Jarvis Taxpayers Association hear daily from those who are thankful for Proposition 13 and credit its most famous feature — limiting annual property tax increases to no more than 2 percent — for allowing them to keep their homes.

While during the session just passed, those favoring new taxes dominated the Legislature, the November election has turned out some fiscally irresponsible lawmakers and replaced them with some who understand the detrimental impact of new taxes on individual taxpayers and the overall economy, and who are likely to reject new taxes.  So taxpayers are grateful not only for Proposition 13 but for lawmakers who will defend their interests against great pressure for new taxes from special interests including public employee unions.

Taxpayers are also thankful for all individuals, regardless of party affiliation, who make the personal sacrifice to run for office and present their ideas to voters.  A functioning free republic relies on individuals who are willing to step into the arena, even in those instances where their chances of prevailing are small.

Finally, complaints against government at all levels are an American birthright.  But we are mindful that billions of souls around the world risk imprisonment or death for speaking out against their despotic governments or leaders.  So, in keeping with the season, let us be thankful that we live in a country that, despite her faults, remains the last, best hope for mankind.