Taxes not the Answer for California’s Economy
by State Senator Ted Gaines
This month marks Presidents Day, and as we celebrate Lincoln’s birthday it’s timely that we look at the tax farce troubling his home state of Illinois. Last year, in a move that must have left legislative Democrats dizzy with admiration and envy, the Illinois legislature jacked personal income tax rates up by 67 percent and corporate tax rates up by nearly 50 percent. Despite assurances that were made when the taxes were passed, the legislature still has not closed their budget gap, and they won’t until they get the political will to control their spending.
Let Illinois be a lesson to everyone who believes in the magical powers of tax increases. They do not occur in a vacuum. Unless governments have the discipline to rein in spending – which California certainly does not – tax increases just enable more extravagant spending plans and takes money away from the working families who have earned it.
California’s problem is not that the people are taxed too little, but that the government spends too much. We have to examine every possible avenue for saving money so that we can keep providing core government services, such as education and public safety, at a price we can afford.
For example, why does California have a full-time legislature? Texas and more than 40 other states do just fine with part-time legislatures that meet far less often than California’s and where the legislators make far less than we make every year.
Besides the savings, it’s a good idea to get legislators away from the Capitol cocoon more often and out in the real world, living and working under the rules they pass in Sacramento. I own a business and I’m constantly frustrated by the maze of regulations that grows and changes with every legislative session. I know how hard California makes it for businesses to succeed.
In my business I can’t just keep spending and spending and then force my clients to pay more and more to cover my spending. When times are tight, I have to cut back, find ways to save money, provide the same services more efficiently. Government should be taking that same approach, when unemployment is eleven percent and state government is running multi-billion dollar deficits. Now is not the time to be growing government.
But, incredibly, Governor Brown’s budget plan spends $6 billion more in 2012-13 than in 2011-12. And to pay for it, Governor Brown and the Democrats want to pass the bill along to their customers. The Governor is pushing for a five-year, $35-billion tax increase. Sales taxes and income taxes will go up during those five years, costing families precious dollars that they could use for groceries, vacations, school clothes and thousands of other necessities that are already hard to afford in our high-cost, highly regulated state.
Let’s take a private-sector approach before we shake down taxpayers any further. How about putting a stop to the $100 billion-plus High Speed Rail plan that will soak up billions of dollars a year for decades? How about allowing schools to contract with the private sector to provide services like transportation or food service?
I oppose Governor Brown’s call for higher taxes. State tax rates went down last year but state tax revenues are growing and are expected to continue growing for the next several years. This indicates that our economy – slowly and precariously – is moving forward. Let’s not kill that momentum by larding on even higher, unnecessary taxes.
Senator Ted Gaines represents the 1st Senate District, which includes all or parts of Alpine, Amador, Calaveras, El Dorado, Lassen, Modoc, Mono, Nevada, Placer, Plumas, Sacramento and Sierra counties.