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

Comments

  1. …and the State’s Middle Class, in an outbreak of rational thinking, is abandoning CA.

    • addendum….
      Having moved to rural NV, I have availed myself of a diesel pick-up with a substantial aux. fuel tank, and can now make round trips to L.A. without having to refuel.

  2. Sebra Leaves says

    Plan Bay Area anticipates the loss of 40% of the middle class in their 2040 plan. Don’t know where they will go or if they will become richer or poorer, but that is the plan.

  3. CaliExpat says

    And we, as the target market of this initiative (middle class DINK’s making $100-150k annually) wised up and moved to where the jobs are… (Colorado)

    Hated to leave many great friends and a church we loved behind, but the current & future economic prospects made staying too risky a proposition….

    Factor in the long overdue seismic risk & potential economic & societal upheaval associated with a big earthquake, and the move became much more palatable…

    We can always vacation there…but then we can LEAVE AGAIN….

  4. CaliExpat says

    Biggest risk that I’ve experienced yet, is the San Francisco tech companies that are expanding HERE, not there, and sending their liberal employee base here to vote liberal in downtown Denver…
    Add downtown Denver hipsters together with the traditional liberal Boulder People’s Republic & you have a potential problem, but it’s at least fairer than the rigged system in California…
    Time to fight to turn Colorado red again…Cali is toast…

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