In the Silicon Valley Political Hypocrisy Is a Way of Life

To many Americans the word "hypocrisy" is a synonym for politics. Congressman Alan Mollahan is only the latest example. Accusations that he funneled government money to supporters and business partners forced the ranking Democrat on the House Ethics Committee to step down. Will he eventually share a cell with his former colleague Randy "Duke" Cunningham a Republican lawmaker and war hero who recently pled guilty to accepting bribes to influence decisions on defense contracts? Hard to say but what is most disturbing is that this behavior is perceived to be so common that there has hardly been a murmur of public outrage.

However not all hypocritical behavior in the political arena is larcenous at least not in the traditional sense of the word.

In California we have the initiative process which was intended to make the people the legislature of last resort when lawmakers proved too indolent incompetent or corrupt to carry out the most important business of the people. Gather enough signatures and ordinary citizens can put a proposed law on the ballot for the voters to decide.

And most Californians like having the ability to use the initiative. Surveys show that nearly 80 percent support retaining this method of changing the law.

However despite the initiative process’s many positive attributes voters must be alert to its risks. Most know that periodically some narrow special interest will attempt to hijack the process to benefit themselves. Usually these measures are summarily rejected. However more insidious are the activities of well-healed individuals or small groups that misuse the process so as to enact measures that will
implement their personal vision of what is best for society while saddling taxpayers with the costs.

Actor/director Rob Reiner has been accused of hypocritically using his position as chairman of the taxpayer-supported First Five Commission – where he is supposed to be helping the development of young children – to fund a media campaign in support of his latest tax increase proposal Proposition 82 on the June ballot. But as a hypocrite he comes in a distant second to Reed Hastings and his Silicon Valley colleagues. This group sheltering under the name "EdVoice" is responsible for the latest threat to taxpayers the misleadingly named Classroom Learning and Accountability Act (CLAA) which would circumvent Proposition 13 by imposing a statewide property tax over and above any current local taxes.

So why is it hypocritical for Reed Hastings – whose company Netflix rents DVDs over the Internet – and Silicon Valley venture capitalist John Doer and their allies to back a measure to increase everyone’s property taxes? First is because if their measure is successful the tax imposed on their sizable mansions will be the same as that imposed
on the smallest of homes. And secondly the backers of this tax increase that will fall disproportionately on others are part of an industry that has striven mightily to avoid and deflect taxes on itself.

The current backing of legislation that would exempt Silicon Valley manufacturers’ equipment purchases from state sales taxes while at the same time promoting a local sales tax increase on the Santa Clara County ballot this June is only the latest example of duplicity by leaders of the high tech industry.

Back in 2000 while many Silicon Valley bosses were lining up with Reed Hastings to back Proposition 39 – a measure that made it easier to increase property taxes for school construction – they were at the same time lobbying strenuously for an extension of the research and development tax credit.

Unfortunately many atop the dot-com industry are under the illusion that there are two sets of rules one for ordinary taxpayers and one for themselves. If voters are not alert and the CLAA statewide property tax increase qualifies for the ballot and passes this fall illusion will become reality.

Jon Coupal is president of the Howard Jarvis Taxpayers Association – California’s largest taxpayer organization – which is dedicated to the protection of Proposition 13 and promoting taxpayers’ rights.

To print or download a PDF version of this commentary click here.

Permission to reproduce this commentary in any format is hereby granted.