When the California Legislature passes “resolutions” — as distinct from actual legislation, it is a meaningless exercise. Sure, it makes people feel better about some issue or crisis de jour, but because resolutions lack any force or effect of actual law, they are quickly forgotten.
Most resolutions are just silly, having to do with “fluff” issues like, “Resolved, we recognize National Puppy Day,” or a resolution establishing another country, such as Cambodia, as a “sister state” to California. Nice gesture, but substantively trivial.
In the last year, resolutions from our decidedly left-of-center legislature have been used to vent against the Trump administration, from establishing a separate immigration policy to whining about the Electoral College. At the beginning of last year’s session, so many days were spent on angry venting that almost no work got done, which for taxpayers may actually have been a good thing.
While those of us who are focused on actual law normally gloss over resolutions, one was recently introduced that caught our eye. Senate Joint Resolution 21 from Sen. Jeff Stone, R-Temecula, would encourage any individual taxpayer in California who disapproves of the federal Tax Cuts and Jobs Act to donate their tax savings to the state of California’s General Fund.
Democrats throughout the nation — and particularly California Democrats — have thundered for months that the tax reform bill is just a tax cut for the rich and would hurt the poor and middle class. Actually, for California, the opposite is true: The middle class is better off but, because of the loss of certain deductions, California’s wealthiest 11-12 percent will likely pay higher federal taxes.
SJR21 correctly points out that while “Californians are struggling with the rising costs of living due to high personal income tax rates and high housing rates due to burdensome regulations … the Republicans in Congress and the President have passed and signed significant tax reform legislation to ease the pain inflicted on California taxpayers.”
The resolution also lauds the new law’s positive effect on economic growth, noting that “leading tax experts have stated the Tax Cuts and Jobs Act will significantly lower marginal tax rates and the cost of capital, which would lead to a 1.7 percent increase in gross domestic product over the long term, in addition to a 1.5 percent increase in wages, and produce an additional 339,000 full-time jobs.”
SRJ21 acknowledges that “the Republican Tax Cuts and Jobs Act limits the amount of state and local taxes that can be deducted on individual income tax returns” but notes that “placing limits on the state and local tax deduction allows individuals in high-tax states like California to finally recognize the true amount of their state tax liability.”
The resolution lists the many benefits of the tax reform law for Californians, including the doubling of the federal standard deduction, doubling of the child tax credit, and reduction of individual tax rates and number of tax brackets.
On the business side, SJR21 recognizes that “the lowering of the corporate tax rate has already resulted in at least one million employees receiving significant bonuses, salary increases, and benefit increases” as well as a massive repatriation of billions of dollars from overseas. Other beneficial economic impacts include a marked increase in GDP and record employment levels for African-Americans, Hispanics, and minorities across the United States.
Yet despite the proven benefits of tax relief, “the California Legislature has considered no fewer than 89 proposals in the current legislative session that would cost taxpayers more than $373 billion annually in higher taxes and fees, including taxes on gasoline, diesel fuel, sodas, candy, groceries, and services, among others.”
After listing examples of questionable spending in California — “the High-Speed Rail Program, which has already cost more than $20 billion, and free college tuition for undocumented immigrants while legal residents are subject to tuition rate increases” — SJR21 comes to the real point, declaring that “the Legislature encourages any individual taxpayer in California who disapproves of the Tax Cuts and Jobs Act to donate their tax savings to the State of California’s General Fund, which pays for programs including, but not limited to, the bullet train that has already cost the state tens of billions of dollars.”
This resolution, of course, has no chance of passing. But it exposes the hypocrisy of the high-tax crowd in a most entertaining way.
Jon Coupal is president of the Howard Jarvis Taxpayers Association. This column appeared in the Orange County Register.