President Trump’s weekly address: Four principles for tax reform

Transcript:

My fellow Americans,

The American Family has always been the heart of our great nation.  In homes across this country, families teach their children to work hard, to love each other, and to make the most of their talents in pursuit of their dreams.

Yet for too long, American families have been hurt by Washington’s policies that put the interests of other countries before the interests of our country.

That is why, in my Administration, we are pursuing tax cuts and reform that create jobs in America, for American workers – not foreign workers, but American workers.

Here are my four principles for tax reform:

First, we are going to make the tax code simple and fair so that families can spend more time with their children, and less time wading through pages of paperwork.  A staggering ninety-four percent of families use professional help to do their taxes – and that’s not fair, that’s not right.  That’s why under our plan, ninety-five percent of Americans will be able to file their tax return on a single page without keeping receipts, tracking paperwork, or filling out extra schedules.

Second, we are going to cut taxes for the middle class so that hardworking Americans can finally save more for their future.  We want to help families keep more of what they earn – and to be able to afford the costs of raising a family.  Our tax code should recognize that the most important investment we can make is in our children.

Third, we are going to restore America’s competitive edge by making our tax system more attractive for investment and job creation.  Our business tax rate is the highest in the world – pushing jobs to foreign countries.  That’s not what we want, that’s not what I’ve been talking about all these years – I’ve been talking about the exact opposite.  We need to bring down our tax rate so we can create jobs, wealth, and opportunity right here, in the United States of America, so we can bring our hobs back and bring our businesses back.  We want tax reform that puts America First.  We want tax reform that makes America great again.

Finally, we are going to bring back trillions of dollars in wealth parked overseas so that it can be invested in our country, where it belongs.

We have a once-in-a-generation opportunity to reform our tax code and pave the way to unprecedented prosperity.  By doing what we’re doing, we will see results like you’ve never seen before.  It will be the largest tax cut in our country’s history.  I am asking members in both parties to come together, to put aside partisan differences, and to pass historic tax reform and tax cuts for the great citizens of our nation.  That’s how we will all succeed and thrive together – as one team, one people, and one American Family.

Thank you, God bless you, and God bless America.

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Will taxpayers trust the GOP again?

TaxesThe California GOP is rapidly approaching the edge of a black hole from which there is no escape. But rather than reverse course by appealing to the needs and aspirations of average Californians, the response by some Republicans in the Legislature is to rush forward to throw themselves into the abyss by supporting policies that punish the middle-class.

Only a quarter of California voters are registered Republicans, barely more than those declaring no party preference. In the Legislature, Republicans number less than a third of lawmakers in each house.

There was a time when even some Democrats in the Legislature supported a healthy economy, taxpayers’ rights and Proposition 13. If any still exist, they are hiding under their desks. Over the last two decades, that party has lurched to the left and those now in Sacramento are devoted to serving the interests of government (aka public sector unions), the ever-expanding entitlement class and the wealthy denizens of coastal enclaves.

For taxpayers, criticizing Democrats is almost too easy given how thoroughly they have abandoned the middle class. But Republicans have traditionally been held to a much higher standard when it comes to taxation and fiscal responsibility. The question now is the extent to which taxpayers can trust Republicans at all.

With Republican support, the California legislature passed several bills slamming California’s ever-shrinking middle class. First, there was perhaps one of the most unpopular bills in California history, Senate Bill 1, imposing $52 billion in permanent new gas taxes and user fees on California drivers. Next was the infamous “cap-and-trade” legislation, Assembly Bill 398. In a few short years, drivers could be paying a buck and a half a gallon just in taxes and climate fees when added to the already sky-high levies imposed by the state. Last, but certainly not least, is Senate Bill 2, part of the California’s ineffective and counterproductive response to the housing shortage. The bill would impose a $75 to $225 “recording fee” on all real estate transactions and generate as much as $258 million annually. Only in California and Monty Python movies would a tax on real estate be considered a rational response to a housing shortage.

Let’s be clear. Those legislators who best defend taxpayers are still Republican. But unfortunately, those faithful few are being smeared by association with those who bend with the wind, succumb to the next big campaign contribution or promise of some “juice committee” appointment or lobbying gig. Note that the reverse is true as well: Some Republican legislators who stood firm for taxpayers were punished by having their committee assignments revoked or banished to the smallest office in the Capitol.

Average taxpayers understand how painful these tax hikes are. But they probably don’t understand how politically incompetent the Republican leadership was in getting them passed. Republican support for tax hikes allowed targeted Democrats in marginal districts (those where a Republican has a chance of winning) to vote against the tax hikes. These Democrats can now seize the mantle of fiscal responsibility even though everyone knows that, had their vote for the hikes been necessary for passage, they would have voted yes. Time and time again, Republican support of tax hikes allowed the “lifeboating” of Democrats in swing districts. To use a phrase by one party leader, this was “felony stupid.”

Taxpayer advocates take no joy in the slow immolation of the Republican Party.

The loss of any effective opposition from a minority party is a loss to all Californians. A strong democratic process relies on the competition of ideas. Moreover, one party rule has led to an extraordinary abuse of power in several areas including campaign rules, shutting down debate and jerry-rigging agencies and commissions in ways to crush political opposition. The loss of a vibrant Republican Party in California will accelerate the state’s metamorphosis into a Venezuela-like banana republic.

In order to have a chance against the power and money of the Democrats, Republicans need to distinguish themselves on critical matters of policy. Unlike social issues — as important as they may be — the fiscal issues of economical government, reasonable taxation and protection of Proposition 13 have been the rock to which Republicans have wisely clung as California’s political skies have turned from purple to blue. A return to these principles is a necessary first step for the GOP to repair its damaged reputation.

Jon Coupal is president of the Howard Jarvis Taxpayers Association.

This article was originally published by the Orange County Register.

California Legislature abandons middle class

CapitolDoes anyone honestly think that the California Legislature’s complete abandonment of the middle class is unrelated to the state’s highest-in-the-nation poverty rate?

This past week presented a stark contrast in the Golden State. First, the controller reported state tax proceeds from all categories are exceeding budget projections. Specifically, the state brought in almost $9 billion in August, exceeding projections in the state budget by over $340 million. All three of the major sources of state revenue — personal and corporate income tax plus sales tax — were up over last year. While a substantial portion of this uptick in economic activity can be attributed to the Trump recovery, there is no denying that California remains an economic powerhouse in its own right.

However, about the same time as we were getting cheery news about state revenue, the U.S. Census Bureau reported that over 20 percent of Californians live in poverty. The “Supplemental Poverty Measure,” which takes into account California’s absurdly high cost of living, gives us the highest poverty rate in the country while the rest of the nation has shown improvement.

So how is it that the most economically powerful state in the union has a poverty level that would make even Mississippi blush? In large part, the answer lies in California’s toxic mix of crony capitalism with mindless pursuit of progressive policies. And both were on full display in the final week of this year’s legislative session.

Few bills moving through the last hectic hours at the Capitol could be remotely characterized as helping the middle class. For example, Assembly Bill 1250 is a complete sop to labor interests. It would prohibit counties from contracting out for services “customarily” performed by county workers unless 14 complicated requirements are met. This would drive up the costs of county government — ultimately paid by taxpayers — and would hurt nonprofits which provide low cost, effective services to county governments. Fortunately, it appears that AB1250 has been stymied this year but will be pushed into 2018.

On a more grand scale, little compares to the various bills moving through the Legislature to deal with the housing crisis. Special interests have formed a conga line outside the governor’s and legislative offices to get a slice of the public pie (baked, of course, with taxpayer dollars). First, is a massive housing bond. Keep in mind that a $4 billion dollar bond will likely incur $8 billion in taxpayer costs after interest and the cost of bond underwriting (Wall Street loves California debt). Second, labor once again wants any public dollars spent on housing to be subject to costly labor restrictions such as Project Labor Agreements or prevailing wage requirements. Who pays for the higher costs? Why, taxpayers, of course.

Overall, California’s housing policies being pursued are designed to reward special interests rather than increase housing stock in any significant way. It is totally lost on our elected leadership that the best housing policy would be for government to reduce regulations that stand in the way of housing construction rather than increase regulations. One bill, Senate Bill 35, does provide a little relief from burdensome CEQA requirements but it contains 18 separate provisions that developers must meet in order to qualify for the expedited permit process for residential development.

The only bill of which we are aware that would have significantly helped housing affordability was Assembly Bill 1100, co-authored by Assemblymen Phil Chen, R-Brea, and Matthew Harper, R-Huntington Beach, to increase both the current homeowners exemption (which provides homeowners with a scant $70 of annual tax relief) and the renters credit. This proposal would require no new government program nor impose new regulations, which probably explains why it lacked popularity in the Capitol. However, it would have put immediate cash into the pockets of all Californians who have to pay for the roof over their heads. That’s what we call middle-class tax relief.

Middle-class Californians have a choice. Stay in California and continue to be the piñatas for progressives and special interests or bail out to other states. Increasing numbers of California’s middle class are choosing the latter.

Jon Coupal is president of the Howard Jarvis Taxpayers Association.

This article was originally published by the Orange County Register

This Supreme Court ruling imperils every California taxpayer

TaxesEarlier this week the California Supreme Court issued a stunning decision which imperils every California taxpayer. At issue is whether taxes proposed by special interests using the local initiative process have to comply with taxpayer protections set forth in Proposition 218, the Right to Vote on Taxes Act, a Howard Jarvis Taxpayers Association sponsored statewide measure approved by California voters in 1996.

The case, California Cannabis Coalition v. City of Upland, at first glance seems limited to a narrow technical question: When a local initiative seeks to impose a new tax, does the issue need to be put to the voters at the next general election or can the proponents, relying on other laws, force a special election? The lower court had ruled that taxes proposed by initiative are exempt from the taxpayer protections contained in the state constitution, such as the provision dictating the timing of the election.

When the lower court in San Diego issued its decision, the Howard Jarvis Taxpayers Association was alarmed because the constitution’s taxpayer protections include the right to vote on taxes. For that reason HJTA provided legal representation to the city of Upland. Of major concern was that, if local initiatives are exempt from taxpayer protections, then public agencies could easily deny taxpayers their right to vote on taxes by colluding with outside interests to propose taxes in the form of an initiative, then submitting a tax under a lower vote threshold than that currently required. The worst case scenario would be if a local government were to rely on this case as legal authority to impose a tax without any election at all.

The import of the case was not lost on those who dislike Proposition 218’s requirement that local special taxes — those imposed for specific purposes — receive a two-thirds vote of the local electorate. For example, backers of a tax to subsidize a new sports arena in San Diego were hoping that the lower court ruling would allow them to impose a special tax with only a simple majority vote. Now that the lower court decision has received the imprimatur from the state’s highest court, these kinds of schemes are already being hatched.

The court in Upland based its decision on the view that local voters were different from the governing body when it comes to enacting legislation. But for decades courts have said that, when voters use the initiative power they are simply “stepping into the shoes” of the governing body and have the same powers and same limitations. For example, a local city council cannot seize someone’s real property without paying “just compensation,” but if local housing advocates propose an initiative to seize someone’s property, the reasoning of the court suggests that there’s no requirement to pay for it. That is surely an absurd result.

While there’s little dispute that the logic behind the majority opinion could substantially weaken the two-thirds vote requirement in Proposition 218, taxpayers are not wholly without hope.

First, the court barely mentioned the parallel two-thirds vote requirement in Proposition 13. Its vitality will surely be the subject of more litigation.

Second, while taxpayers are concerned about collusion between local governments and special interests, not all local governments are applauding the decision. In fact, some local governments filed a “friend of the court” brief in support of HJTA’s position. That’s because many local governments are concerned that special interests could usurp the governing body’s ability to tax.

Finally, the actual ruling dealt with the timing of local elections for tax increases proposed by initiative. While the dicta in the decision (verbiage in a decision not necessary for disposition of the case) is a huge threat to Propositions 13 and 218, the scope of the ruling will require years of additional litigation.

In the meantime, the decision has provided tax-and-spend interests with a roadmap of how to avoid taxpayer protections set forth in the California Constitution. When taxpayers see how they are being burned by collusion between those seeking additional tax revenue, like government employee unions and complicit local officials, it may be necessary to go back to the initiative process to close yet another court created loophole.

Jon Coupal is president of the Howard Jarvis Taxpayers Association.

This article was originally published by the Orange County Register

Milton Friedman’s Legacy Lives On

milton-friedmanMilton Friedman was a world-class economist, won the Nobel Prize for Economics in 1976, and passed away in 2006. Friedman championed repeal of the death tax (estate tax) for years. In 2001 he wrote an open letter on the subject and convinced 276 economists to sign on. This week the national Family Business Coalition, of which the Family Business Association of California (FBA) is a member, has announced the letter now has 723 economists signed on including four winners of the Nobel Prize. Here are a few excerpts from Dr. Friedman’s letter:

“Spend your money on riotous living – no tax; leave your money to your children – the tax collector gets paid first. That is the message sent by the estate tax. It is a bad message and the estate tax is a bad tax.

The basic argument against the estate tax is moral. It taxes virtue – living frugally and accumulating wealth. It discourages saving and asset accumulation and encourages wasteful spending. It wastes the talent of able people, both those engaged in enforcing the tax and the probably even greater number engaged in devising arrangements to escape the tax.

The income used to accumulate the assets left at death was taxed when it was received; the earnings on the assets were taxed year after year; so, the estate tax is a second or third layer of taxation on the same assets.

Death should not be a taxable event. The estate tax should be repealed.”

The current federal death tax comes into play when an estate is valued at over $5.49 million and is then 40% of anything over that. It doesn’t take long in California for an estate to get to that size if there is real property and equipment involved. Farmers are particularly hard-hit as many are “land rich and cash poor” meaning they have to sell some or all of the property to pay the death tax bill, saying goodbye to some or all of the family farm.

Just when California families saw some hope as the President and Congress are looking at eliminating the federal death tax in the current round of tax reform proposals, State Senator Scott Wiener of San Francisco introduced a bill that would put the creation of an equal tax, just for Californians, on the state ballot in the event the federal tax is eliminated. It must go to the voters because two initiatives passed by the voters in 1982 prohibit an estate tax in California, and that can only be changed by the voters. Family businesses vigorously oppose a death tax for Californians. FBA leads a coalition of 40 associations opposed to the bill. To again quote Dr. Friedman, “It is a bad message and a bad tax. Death shouldn’t be a taxable event.”

Executive Director of the Family Business Association.

This article was originally published by Fox and Hounds Daily

Taxpayers pay for lobbying in Sacramento

Pension moneyThe latest lobbying reports are out in Sacramento, showing how much special interests are spending to influence lawmakers. After reading the reports, you can’t blame taxpayers for feeling like the man who has been unjustly condemned to the gallows and is compelled to pay for the rope that will hang him.

When asked who spends the most currying favor with members of the Legislature, many folks will say “Big Oil” or maybe drug or insurance companies. Not even close. Those who name government employee unions as the big spenders would be wrong, too, but at least they would be getting warmer. (Unions, which thrive on involuntary “contributions,” have a huge influence on the activities of the biggest spender of all).

Far and away, the lobbying champs are California’s myriad of local governments. Through the first six months of this year, cities, counties, schools and other special districts have spent $24.3 million on influencing Sacramento lawmakers. And it is a safe bet that these governments are not spending this taxpayer money to promote tax cuts for average citizens. In fact, in many cases, they are spending tax dollars to advance their objective of wringing even more out of already beleaguered taxpayers.

Local government officials use high-sounding rhetoric to justify not spending these millions of dollars on fixing potholes, hiring first responders or addressing other pressing needs of the local community. To best serve their constituents, they will argue, it is important that they have a voice in lawmaking that may impact local jurisdictions.

Closer to the truth would be that local governments want to make sure they get a share of the “spoils” in our very high-tax state. And sometimes they seek more than a share of state revenue, they want special exemptions to allow them to increase local taxes beyond what state law allows.

A number of jurisdictions have sought and received exemptions from laws limiting the local sales tax, and in one case, nine Bay Area counties asked for, and received, an OK to create a huge taxing district to impose a parcel property tax on all residents, even though some lived many miles from the improvements for which they are being charged.

However, one of the motivators that keeps local government officials constantly scrounging for more revenue is, just like their brethren in Sacramento, so many are beholden to the most powerful political force in California, the government employee unions. Just like many state legislators, they owe their election to union support. These unions provide campaign cash and boots on the ground in election season. So, when it is time to sit down and discuss pay, the unions are represented on both sides of the table and taxpayers, if they are considered at all, are an afterthought.

With this constant pressure to raise funds for pay, benefits and pensions for local government workers, it should come as no surprise that local officials are willing to spend millions in the hope that state government will funnel more money back into local coffers and smooth the way for increasing the already exorbitant taxes locals are paying. Of course, savvy taxpayers understand that debates about where tax money comes from — be it state, local or even federal dollars — are a ruse. Every penny comes from the same location, our pockets.

The question local taxpayers must decide is whether or not money that could be used to solve local problems should continue to be spent “wining and dining” the Sacramento politicians. Certainly, the government employee unions think that this investment in Sacramento by local officials is a good deal for them.

Jon Coupal is the president of Howard Jarvis Taxpayers Association.

This article was originally published by CalWatchdog.com

Increase the homeowners exemption to improve housing affordability

http://www.dreamstime.com/-image14115451California is in a housing crisis. The cost of housing — both for purchase and rental housing — is too expensive. Ineffective public housing policies and anti-growth policies that impede even reasonable development projects have choked supply in a high-demand market. California needs to start building homes and apartments as soon as possible. Recent estimates show that California must build 180,000 units of housing a year over the next 10 years simply to keep pace with demand. Currently, only about half of that amount is being constructed.

But in the meantime, a quick and effective way to provide financial relief to everyone in California with a roof over their head is to increase the homeowners exemption which has been stuck at $7,000 since 1972. A lot has changed since then. Mark Spitz won a then-record seven gold medals in the 1972 Munich Olympics. Atari released the PONG computer game and a gallon of gas sold for 36 cents. California’s population has nearly doubled from 21 million residents to 39 million residents today. And according to the California Association of Realtors, the median price of homes in California is well over $500,000 compared to $28,000 in 1972.

Because the average Californian earns $61,000, according to the U.S. Census Bureau, most are knocked out of the market before they even start. Only one-third of California residents can afford a median priced home.

In February, Assembly members Phil Chen and Matthew Harper introduced Assembly Bill 1100, the “American Dream Act,” which would increase the existing homeowners’ exemption on their property tax from $7,000 to $25,000, as well as raising the renter’s credit by using the mandated California Franchise Tax Board inflation adjustment. This will not only help current homeowners but this will help those aspiring to own a home. One-third of renters in the state spend at least half their take-home pay in rent, a statistic driving California’s record high 20 percent poverty rate.

Californians are paying some of the highest taxes in the nation, exacerbating the ability of ordinary citizens to afford a home. Even with Proposition 13, which has proven effective in limiting the growth of homeowners’ property tax bills, California still ranks in the top third of all states in per capita property tax revenue.

Moreover, high taxes and unaffordable housing are taking their toll on the California economy. In the last decade, California has lost more than 1 million people in net domestic out migration to other states. We all know at least a few people who have moved to Nevada, Texas, Oregon, Florida or Arizona to find a less expensive place to live.

In some welcome good news, in May, AB1100 passed a major hurdle by passing the Assembly Revenue and Taxation Committee with notable bipartisan support. This was the first time legislation of this nature got out of a legislative policy committee. Many had been attempted in years past but had failed.

When the Legislature returns from its summer recess later this month, affordable housing will be the leading topic of discussion. While there are many ideas being considered, including more bonds and taxes, ideas that provide direct relief for middle-class property owners have yet to rise to the forefront. They need to. Beyond the homeowners exemption, liberalizing the rules about taking one’s Proposition 13 base-year value to a new residence, the so-called “portability” issue, should also be part of a legislative proposal.

Any reform package must articulate that government can’t tax and bond its way out of a problem where it costs over $300,000 to build one unit of affordable housing. Addressing these regulatory burdens as well as providing tax relief for homeowners and renters will not only lead to future economic prosperity for California. It is also the right thing to do.

Jon Coupal is the president of Howard Jarvis Taxpayers Association and Phillip Chen is a member of the California Assembly from the 55th Assembly District.

This article was originally published by the Orange County Register

California Legislature abandons state’s middle class

taxesCalifornia’s middle class, who pay the bulk of all taxes in California, are constantly under attack from Sacramento politicians. Already this year, the Legislature approved Senate Bill 1, to add 19 cents per gallon to the cost of fuel beginning in October and an average of a $50 increase in the car tax. This translates into at least $400 in additional taxes for the average California family.

Now, Sacramento politicians have compounded the damage by imposing another fuel cost increase by extending the state’s cap-and-trade program, a market-based regulatory system for controlling greenhouse gas emissions. Under this program, impacted industries buy credits at auction which are then used to incentivize decreases in pollution levels.

Surprisingly, many industries forced into the “cap-and-trade” auctions supported the extension because they were threatened by Gov. Brown, environmental extremists and powerful regulators with an alternative program run completely by the government bureaucrats at the California Air Resources Board. And those were not idle threats.

Be that as it may, some legislators are using the “it could have been worse” argument to claim that they’ve won some sort of victory for taxpayers. Without cap and trade, they say, your fuel costs would have increased by nearly two dollars a gallon. Even if completely true — which is doubtful — cap-and-trade advocates won’t tell you the whole story. The non-partisan Legislative Analyst’s Office has said that under the legislation just approved, fuel prices could go up by 21 cents in 2022 and 71 cents by 2030. Only in the Alice in Wonderland world of Sacramento politics does a 71 cent fuel price increase constitute a victory for taxpayers.

So what’s the ultimate impact on working Californians? If the new legislation is added into April’s gas tax increase, consumers will see their price at the pump increase as high as 40 cents per gallon by 2022 and 90 cents by 2031. Overall household fuel costs will likely eventually increase by over $1,000 a year per household. And all this is occurring so that liberal Democrats can reach an arbitrary threshold of a 40 percent reduction in greenhouse gas emission levels by 2030.

While the handful of Republicans in the California Legislature — who make up less than a third of the members in each house — are usually the reliable opposition to the punishing policies inflicted on the middle class by the majority party, that did not prove to be the case last week. Eight Republicans voted for the extension.

But could they argue they received something in return which benefits their voting constituents? Nope. The vast majority of California taxpayers will receive no direct financial relief in exchange for their thousand dollars a year they will pay for goods and services. Perhaps it would be easier to share in the cost of climate change if California wasn’t going it alone on cap-and-trade in the United States, while we emit only one percent of the world’s greenhouse gas emissions.

The extension of cap-and-trade ensures one thing, that funding for high-speed rail will continue. The legislation dictates that at least 25 percent of the new funding will be spent on a train that a majority of Californians have made it clear they would reject if given another chance on a statewide ballot. Ironically, high-speed rail has proven to be a net increaser of greenhouse gas emissions. So much for trying to save the world.

A hollow victory at best is the suspension of the infamous fire tax against those living in rural unincorporated areas of California. Some 800,000 property owners will no longer have to pay this fee, which remains the subject of a class action lawsuit commenced several years ago by Howard Jarvis Taxpayers Association lawyers. While the suspension (not repeal) of the tax is welcome relief for rural property owners, it does not include any rebates for the millions of dollars already paid. For that reason the HJTA litigation will continue over the issue of refunds.

As is common with complex legislation that ultimately hurts the middle class, special interests suffered little or no harm and, in many instances, negotiated for a financial windfall. Most got a piece of the revenue from the higher gas prices that consumers will be paying. The governor got more funding for high-speed rail and corporations got significant tax breaks. But legislators couldn’t even fight to give citizen taxpayers a rebate for the higher gas prices they’ll be paying. Will any legislator fight for them? Is there anyone left in the Capitol who will put the middle-class taxpayer before their next political deal that results in another crushing financial burden? For the sake of this once Golden State, we hope so.

Jon Coupal is president of the Howard Jarvis Taxpayers Association.

This article was originally published by the Orange County Register

Why some cities won’t be paying Los Angeles’ new homeless tax

800px-Helping_the_homelessLos Angeles County’s sky-high sales tax will rise not once, but twice, this year.

In recent elections, Angelinos voted two new tax hikes upon themselves — one to fund transportation (Measure M) and the other to fight homelessness (Measure H).

As a result, the county’s 8.75 percent tax rate jumped to 9.25 percent on July 1. It’ll rise even further — to 9.5 percent — on October 1.

Of course, some cities in Los Angeles County have even higher tax rates. Seven of them — Compton, La Mirada, Long Beach, Lynwood, Pico Rivera, Santa Monica and South Gate — have rates of 10.25 percent that are among the highest in California, if not the entire nation.

Here’s where it gets interesting: Rather than increase their tax rates another quarter cent on October 1 like the rest of the county, those seven normally tax-loving cities will get a free pass — at least for now — in funding the fight against homelessness.

The seven cities will, of course, benefit from the estimated $355 million in annual tax payments the measure will raise but they will do so only by the courtesy of taxpayers in other cities. It’s a subsidy, plain and simple.

Why was Measure H drafted this way?

It appears to have been a rather clumsy attempt to dodge a state law capping local sales taxes. The law requires localities to limit voter-approved “district” sales taxes to 2 percent (on top of the state rate of 7.25 percent) unless they obtain specific legislative authorization.

Los Angeles County has received legislative approval twice in the past to increase this limit for transportation-related taxes. For some unknown reason, Measure H proponents didn’t want to bother with this step.

But the poor planning came back to bite them. Proponents claimed the new tax would take effect July 1, at the same time as Measure M. That would have been a lot simpler for everyone, including business owners who must now go through the trouble of reprogramming their registers twice to adapt to the rate increases.

Since the Measure H language was both unprecedented and legally questionable, the Board of Equalization rightly refused to collect the tax until the Legislature specifically voted to authorize it.

These delays have pushed back the start date of Measure H, resulting in lost funding for the fight against homelessness, and more confusion and headaches for taxpayers.

Even more troubling is the dangerous precedent this sets statewide. Will other local governments soon craft tax proposals that exempt politically-favored constituencies?

We believe the cap on local sales taxes exists to protect taxpayers and should be respected. Not every good cause merits a tax increase.

Governments are hungry for more taxpayer revenue, and seem increasingly impatient to add more and more taxes. They are also becoming more creative at disguising their efforts, and using public dollars to pay for them. The Fair Political Practices Commission, for example, is conducting an investigation into whether the county of Los Angeles illegally spent taxpayer dollars for political advocacy in its campaign for Measure H.

Before asking voters to approve more and more taxes, shouldn’t local governments identify and eliminate ineffective taxes that haven’t accomplished their promised goals?

If taxpayers are concerned about how local governments spend their money, then that question is certainly worth asking. If not, how else do we ensure taxpayers receive value for the dollars they are already paying?

George Runner is vice chair of the California State Board of Equalization. Jon Coupal is president of the Howard Jarvis Taxpayers Association.

This article was originally published by the Orange County Register

How to increase transparency for local bond measures

Voting BoothsPicture yourself on Election Day at your local polling place and looking over a lengthy ballot. Or, try to recall when you were at home reviewing your mail-in ballot. In choosing your elected officials on the ballots, it is pretty straight-forward: You vote for the candidate that best matches your interests and values.

But what about tax levies and bond measures proposed by local governments and school districts? There are so many factors to consider. How will the new funds help your community or school? How long will it take for bonds to be paid off? Most importantly, what will be the actual financial impact on you and your family?

Current law requires that a “tax rate statement” be mailed out to all voters, which includes the best estimate of the highest tax rate for voters, as well as the best estimate of total debt service. While this information can be helpful, it is often insufficient in aiding voters to estimate how much their property taxes might increase.

This is why Assembly Bill 1194 (by this column’s co-author, Matt Dababneh, D-Woodland Hills) is necessary to alleviate this uncertainty and increase transparency for voters regarding the effects that local bond measures may have on property taxes. By providing information upfront, such as the best estimate of the average annual tax rate and the last year when the bond is expected to be paid, voters will have the ability to better understand the bond measures’ impact on their own personal finances.

AB1194 was approved by the state Assembly with strong, bipartisan support. It is supported by taxpayer advocacy organizations and by the very people in local government who are most affected if this bill should pass: the California Association of County Treasurers and Tax Collectors.

However, AB1194 faces more hurdles in the state Senate and has attracted some opposition. One organization fears the additional information provided to voters through the legislation “could have a chilling effect on the passage of local bond measures.”

This opposition should concern all taxpayers, as well as transparency advocates. How can providing more information about the average annual tax rates be misleading or even “chilling”? Are opponents afraid that more transparency might give voters pause and cause them to take a closer look at the consequences of the bond measure’s passage rather than blindly voting “yes” down the ballot?

Taxpayers should ask themselves if they could benefit from more clarity on these bond measures. If the answer is yes, then we need your support to ensure AB1194 wins approval in the state Senate and moves to the governor’s desk. You can help by contacting your state senator over the course of this summer to urge their support on AB1194 for better voter transparency.

Jon Coupal is the president of Howard Jarvis Taxpayers Association. Matt Dababneh is the California Assemblymember for the 45th Assembly District.

This piece was originally published by the Orange County Register.