Frank: KEVIN FAULCONER TAX PLAN: Proves he is an Economic Illiterate

KEVIN FAULCONER TAX PLAN:Proves he is an Economic Illiterate.

Stephen Frank, OP-ED, Exclusive to the California Political News and Views, 5/18/21

From Politico:  ‘Faulconer strategist @stephenpuetz: “Newsom’s lead strategist with a bizarre rant the morning after Mayor @Kevin_Faulconer releases the largest middle class tax cut plan in CA history & set himself apart as the only candidate with experience & real substantive solutions to CA’s problems. Clear who concerns them.”

What is this plan to “save” the poor and middle class?  Kevin Faulconer, the Arnold Schwarzenegger/Meg Whitman candidate for California Governor wants a tax cut for the poor and middle class.  Under his plan, if you earn less than $50,000 or as a couple, less than $100,000, you will not have to pay income tax on those earnings.

Then, up to one million dollars the first $50,000 or $100,000 is not taxable.  But he does not say how he will replace the revenues of the money not taxed.  Also, it should tell us about THE TAX INCREASES HE WANTS, TO IMPLEMENT HIS PLAN.

The Sacramento Bee, April 21, 2021 had this:

“Joshua Rauh, professor of finance at Stanford Graduate School of Business, co-authored an extensive study of the impact of California’s higher tax rates for the nonpartisan National Bureau of Economic Research.

The report found not only migration of the wealthy since California raised its income taxes in 2012, but less taxable income from those who stay. People change their financial behavior to adjust to the new tax laws.

“There was a pretty big erosion of taxable income relative to what would have happened had those people not changed their behavior,” Rauh said. “They’re reporting less taxable income. Maybe they’re shifting business activity to other states. Maybe earning less overall. Maybe they’re going offshore.”

There are three effects of the Faulconer plan:

  1.  Less Revenue
  2. Less revenue means higher taxes on the wealthy
  3. That means more wealthy to leave the State
  4. More rich leaving, less revenue for the Sate
  5. Those NOT paying taxes have no problem supporting bigger, more expenesivr government—they are not paying.
  6. That will cause more people to leave the State.
  7. Even if the poor and middle class do not pay income taxes on the first $100,000 the cost of goods, services and food will go up, to pay the higher corporate and personal income taxes.

All of this Kevin Faulconer could have learned if he took, and passed, an Economics 1 class.

Instead, Faulconer thinks the voters are not smart enough to understand what he is doing.  Newsom is using tax dollars to buy votes to stop the Recall.  Faulconer wants to buy votes to get elected Governor—in his case, if he has his unpaid tax cut, he will create more joblessness, less revenues, more business for U-Haul and a bigger, more abusive government.

Reagan and Trump created tax cuts that built the economy—Faulconer is using Democrat economics, to kill jobs and the economy of California.  Under Faulconer and Newsom we will have more of the very rich and the very poor—the middle class will be forced to flee to save themselves economically.

Faulconer calls his plan a “tax cut”, while not telling about the tax increases and loss of investment funds in the private sector to create jobs.  Of course he believes in government, not privately run utilities—so government can control cost and use.  Under his utilities plan if government does not like your business, you get no energy or very, very expensive energy—because it is controlled by government not the free market.

The good news is that the people of San Diego voted down the tax increases he proposed—I expect the people of California will be as smart.

On the Recall ballot there will be TWO candidates proposing higher taxes—Gavin Newsom and Kevin Faulconer.  Guess I have to send him the Stanford report noted above—maybe Faulconer can be educated on the matter of taxes.

(Full disclosure:  I have not endorsed a candidate for Governor)

About Stephen Frank

Stephen Frank is the publisher and editor of California Political News and Views. He speaks all over California and appears as a guest on several radio shows each week. He has also served as a guest host on radio talk shows. He is a fulltime political consultant.

Comments

  1. str8talk says

    Since Gavin Newsom is also an economic illiterate being one should not hurt Faulconer much.

    • kellog64 says

      Its practically a prerequisite to be an economic illiterate to attain leadership in any office in CA.

  2. The plan to “save” the poor and middle class must be focused on reducing the cost of electricity and fuels as it affects the continuous price increase of everything and is the prime driving force for increasing homelessness.

    California has the among the highest cost for both electricity and fuels, which is an embarrassment for a state that pretends to be a trend setter.

    Only by reducing rather than increasing the cost of energy, can we restore broad upward mobility potential for the underclass and hope to maintain a healthy democratic society.

    Newsom is giving away a lot of money these days but doing nothing to effectively and forever resolve the causes of the high energy costs that severely limit the state’s economic base and its potential for improvement. Lower electricity and fuel prices would benefit the poor and middle class in perpetuity.

  3. Really??? says

    Mr. Stein is correct. Reduction of energy costs across the boards has been proven throughout history to a) help the working poor and lower middle classes, and b) made business profitable that then allowed them to hire more people.

    But Marxist theory (regardless what you call it) does not get human nature nor does it understand multiplier effects of rational Capitalism.

    The icon of the Democrat Party John Kennedy stated, contrary to popular belief cutting taxes increases revenue to government. Understand today he would be a left of center Republican.

  4. Californians waste millions for state tax preparation services. The state wastes millions running the FranchiseTax Board. Thousands of Public and Private sector unproductive computation hours spent playing a very complex and shifting Tax Game. Let’s say the average that everyone pays Sacramento is 5% of their federal tax bill. Why not simplify and send Californians a card that requires that average of their federal tax. The power to tax is necessary for government it exist. The need to make it convoluted and onerous is not.

  5. Stephanie says

    Ron Stein is correct. Energy prices are killing us. Neither the Brylcreem Boy or Hepatitis Kev know what they are talking about. What about water storage? Roads? Nothing gets done in this State anymore.

  6. David Blacker says

    Mr. Frank may not have endorsed a candidate for governor yet, but he is making it clear it won’t be Kevin Faulconer. In fact I think Mr. Frank is the first Conservative I can remember that is against cutting taxes. I will admit I don’t think pitching a tax cut was very original, it’s standard for every Republican to want to cut taxes. However it is a once in a blue moon moment to have a “Republican” come out against it. Maybe Mr. Frank should just come out and endorse someone, so we can see what side he is on.

  7. Whoa Hans, you don’t want to put all those CPAs and tax advisors out of business, to say nothing of the lobbyists that claim a share of the State revenue?

  8. I think the problem lies in the fact that neither party can find a candidate with a brain. If someone could only come up with a plan that would make all the poor people leave the state the problem would be solved. But wait!!! if all the poor people left the state then the rich people wouldn’t have anyone to do their shit for them and this would put them in a snit and they would probably up and leave also. It very well could be that this is one of those situations of where if you turn around too fast, you will run into your own ass, and nobody wants to do that.

  9. Cut spending, eliminate the state income tax, enforce the law and Constitution and, kick the enviro-nazis to the curb. These are the items that would produce real positive change.

  10. Edgar Struble says

    I’m with Hans!

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