Taxpayers have cause for worry about the upcoming legislative sessions
“No person’s life, liberty or property is safe while the legislature is in session,” is a quote attributed to Mark Twain. For that reason, taxpayers breathed a sigh of relief when the legislature adjourned on August 31st of this year.
That’s the good news. The bad news is that legislators return this week and, at the direction of Governor Newsom, will conduct a “special session” to consider another tax hike even before the new legislature officially convenes in January.
For those who believe the concern over even higher taxes is nothing more than conservative hyperbole from “declinists” (Jerry Brown’s grumpy label for the Howard Jarvis Taxpayers Association) consider the extent to which the legislature sought to increase taxes last year. California lawmakers considered almost $200 billion in new taxes, fees, and other exactions. These included various taxes to run a massive new single-payer health care program, a carbon tax, a “wealth tax,” and many more.
To emphasize the point made repeatedly in this column, California has the highest income tax rate, highest state sales tax rate and highest gas tax in America. And despite claims that Proposition 13 has decimated property tax revenue, California ranks high, 14th out of 50 states, in per capita property tax collections.
One must wonder with this endless litany of proposed tax hikes whether progressives have a fiscal death wish. What was once a huge surplus is now projected to be a $25 billion deficit.
A big problem with the California legislature is that fewer and fewer of its members have ever run a business. Their lack of sympathy for both individual taxpayers and businesses is reflected in various legislative scorecards, including the non-partisan Legislative Report Card issued by the Howard Jarvis Taxpayers Association, on which the majority of legislators received D’s or F’s based on their votes on critical legislation of interest to taxpayers.
As noted at the beginning of this column, California’s political leadership doesn’t want to wait until next year to consider tax increases. Gov. Gavin Newsom announced in October that he is calling for a special session of the state legislature to pass a new tax on oil company profits to punish them for what he called “rank price gouging.”
For Newsom and his progressive allies to blame the oil industry for high gas prices is the worst form of projection imaginable. “Projection” in politics means blaming others for the problems you’ve created. How can politicians blame the oil companies when it is now the express policy in California to limit petroleum extraction in the state and to punish all aspects of the industry, including imposing the highest gas tax in the nation?
Newsom’s “remedy” for high gas prices is to impose a windfall profits tax on oil companies. But this tax will do nothing to lower gas prices and, in fact, will be counterproductive by increasing costs that will ultimately be paid by California drivers.
The only thing that is clear now is that Newsom and the progressives in the legislature need to take Economics 101. It is the simplest of economic principles that when the supply of something is limited, the price goes up. Prices also increase when the cost to produce something goes up and, included in the cost of a product, is the cost of regulations and taxes.
Taxpayers are right to be concerned about the pending legislative session as evidenced by progressives’ rush to consider a punishing tax hike before year’s end. Even more frightening is that we’re facing two full years of playing defense against an endless parade of tax increase proposals. Again.
Jon Coupal is president of the Howard Jarvis Taxpayers Association.