California: Paradise Lost

In the wee hours this morning,in an egregious act of irresponsibility,the California Legislature imposed new taxes on the People of California to the extent of a minimum of $70 Billion.

Rather than doing the hard work of reducing spending, lawmakers felt it was easier to solve the problem mostly by raising new taxes. The legislators voting to impose these additional taxes on Californians were 100% of the Democrats in the Assembly, 100% of the Democrats in the State Senate, three Republican Senators, Maldonado, Cogdill and Ashburn and three Republican Assemblymen, Niello, Villines and Adams, all of whom broke their word because they signed a “no new taxes” pledge. No other Republicans supported the tax increase proposal. I want to congratulate those Republicans who stood strong and tried to defend the people of California against these taxes. In particular, Assemblyman Chuck Devore, candidate for U.S. Senate, and State Senator Dennis Hollingsworth, new Minority Leader, although all Republicans who chose not to vote for the measure should be commended.

It is, in my view, unconscionable for Republicans to have supported the imposition of this huge additional tax burden on the residents of California. I know that those who voted for it thought that it was the only way that anything was going to get passed that would close the budget gap and prevent the State from having to go bankrupt, and I also know that they were strongly pressured by the Governor. I think they chose the easy way out rather than doing the hard work.

What were the alternatives, you ask? Well, let me say that one possibility was going back to the 2003 budget, which was the year we recalled Gray Davis and Arnold came in, and increase each line item in that budget by two factors: 1) the increase in population since 2003, and 2) the inflation rate for those years. The other possibility was to start over. Do Zero-based budgeting. That is you start with each line of the budget and decide what is necessary and what isn’t. Each line starts out at zero and then you justify each addition.

Let me give you some examples of why the budget is out of whack (a professional term). In 2003 the population of California was approximately 35 Million. Today the population of California is about 38.5 Million. An increase in population of approximately 10% in five years, or roughly 2% per year.

The State spent a total of $78 Billion in the 2002-2003 fiscal year. The State spent a total of $105 Billion in the 2007-2008 fiscal year. That is an increase of 35% in spending in 5 years, or roughly 7% increase in spending every year. The population is increasing at the rate of 2% per year and spending is increasing at the rate of 7% per year. Is something wrong here?

The number of employees of the State of California in 2003 was approximately 321,000. The number of employees of the State of California today is approximately 360,000. An increase of 40,000 employees in five years, or an increase of an average of 8,000 new State employees per year, or roughly 30 new employees on the State payroll added EVERY DAY. Is the legislature saying that the State can’t run without adding 30 new employees every day? Is the legislature saying that the State can’t run if we lay off 20,000 of the new employees that we have added since 2003? Why not? The state ran with 40,000 fewer employees in 2003.

Are you telling me that the only way to make up the budget deficit is by raising taxes? Is reducing spending not an option?

The special interests in California who have Democratic legislators in their pocket are running the state and driving it into bankruptcy, and driving businesses out of California. California was the sixth highest taxed state in the nation before this bill was passed. We will soon have the distinction of being the highest taxed state in the nation.

Here are just a few of the new taxes Californians can look forward to:

* You will pay a state income tax “surcharge” of 5.25%
* Your sales tax on most everything you buy will boosted a full 1.00%
* Your car tax (Vehicle License Fee) will mushroom to 77% higher than now.
* Your dependent tax credit will be slashed by two-thirds, in effect, costing you $200 per child

I don’t understand why any Republican would vote for a bill that will cost the average family between $1,000 and $2,000 per year in additional taxes. If you want to get an idea of what this new bill will cost your family, you can calculate it here.

But wait, there’s more.

This tax increase will not solve the problem. I can almost guarantee that the projected tax revenues will not be received. There will be another shortfall within a few months and they will be back to take more money out of your pocket. This is not the end of your being over-taxed by a Democratic legislature that wants to take your money, because they feel they know how to spend it better than you do, and because they would rather take more money from you than make the difficult choices about cutting spending. More to come.

Because Abel Maldonado knew that he could not win a statewide election in the future where there were only Republicans voting, he made, as a condition of his agreeing to the tax increase bill, that there be open primaries in the State of California. That will be on your ballot soon. What does that mean? It means that Democrats will be able to vote in Republican primaries, and vice versa. That means that, if the measure passes, from now on, Democrats will choose who the Republican candidates are.

This bill is going to cause severe economic problems in the State of California, along with AB32 which places impossible burdens on businesses in California. Business are already moving out of state. California is now ranked as one of the most business-unfriendly states in the union.

This tax increase bill, coming on top of the huge devaluation in our currency (inflation) which will result from the gigantic federal stimulus spending package, will mean much economic pain for Californians over the next five or six years.

The car tax increase will not generate the revenue that the legislature and the Governor think it will. I heard two people today tell me that they are now going to postpone buying a new car because of the car tax. How does that help the auto industry? There are always unintended consequences of raising taxes.

What can we do about it? There is only one answer. Elect fiscally conservative honorable Republicans to the State legislature to replace profligate Democrats. California Democrats, as well as Republicans, will be hurt by this bill, and they may be more willing to listen in the future to candidates who care about their financial well-being and who will take a stand for them in the legislature.

My daughter and son-in-law left Los Angeles to move to Nevada in 2008. While I personally hadn’t considered leaving the State before, I feel it is now something to think about. Nevada has no state income tax.

The Intellectual Challenge of Republican Ideas by the Democratic Underground

The wonderful experience of reading the Democratic Underground discussion groups is the level of intellectual socratic discourse one encounters while hearing the ideas that conservatives expound challenged. Political differences are resolved by setting up each Republican idea and then presenting reasoned arguments why the Democratic path is the better one for the country.

Examples:

We have the votes in the House of Representatives.
We have the vote in the Senate.
We have the Executive Branch.
We don’t need the Republicans to Govern.
It is time to remove the Republicans from play and implement full progressive policies in this country.

I can’t stand to even watch a Republican or read any of their lying shit anymore. They make me too angry.
They are such evil, small people.

We don’t need people with no conscience or empathy having a political party.We don’t have the government for greedy bullies to destroy and pillage.If the rethugs don’t have the sense to shut up and go away,if they keep that selfish bullshit going,the people who already hate the psychopath party won’t tolerate the robber baron, fundie cultie bully loudmouth ,ignorant assholes on the right much longer. And if they go too far one day it will become open season on bigots.

Republicans should be eliminated with extreme prejudice by any means necessary

I don’t believe in this American experiment either. Parties with different ideas about how to get things done are terrible for a country. Why should there be a debate about anything? We all know what will work!

The Republican Party needs to be eliminated. They serve no useful purpose. There’s no reasoning with them. They’ll gladly destroy the country if they think it will return them to power. May they all rot in pieces. I hate to say I hate anyone, but I hate them all. …..

You can find these statements and many more here.

An Open Letter to the Congress and the President

This is an open letter sent out today by the Heritage Foundation.

An Open Letter to the Congress and the President of the United States: For the last 35 years, educators and analysts at The Heritage Foundation have been intimately involved in the nation’s great public policy debates. In all that time, we have never encountered legislation with such far-reaching and revolutionary policy implications as the American Recovery and Reinvestment Act currently before Congress. And never have we seen a bill more cloaked in secrecy or more withdrawn from open public exposure and honest debate.

In addition to being the single most expensive bill ever proposed, this measure calls for a massive expansion of the federal government’s reach into the day-to-day life of virtually every citizen, business and civic organization in the nation. That, in itself, should be the subject of an extensive public conversation and thoughtful debate. Instead, we have seen Congressional leaders schedule snap votes on a 1,434-page bill that no one—repeat, no one—has had a chance to read in its entirety, much less digest and deliberate.

This bill has been advertised as an economic stimulus bill—despite the fact that the Congressional Budget Office estimates it will actually weaken our nation’s long-term economic growth. While the stimulative utility of the bill is, at best, questionable, it would unquestionably rewrite the social contract between the American people and their government. For example:

  • The bill reverses the bipartisan and highly successful welfare reforms of 1996 and drastically expands the welfare state. For instance, it will start rewarding states for adding people to their welfare rolls, rather than for helping them find gainful employment. And contrary to long-established practice, it will entitle able-bodied adults without children to receive cash assistance.
  • It does extreme violence to the concept of federalism—bailing out states that have spent irresponsibly at the expense of taxpayers in states that have been fiscally prudent.
  • It greatly shifts the responsibility and power over health care delivery and decision making from individuals to government. Among other things, it would create a new federal health board to decide which medical services are “effective” in America, paving the way for government effectively to overrule the clinical decisions of private physicians.
  • It deliberately censors religious speech and worship on school campuses by prohibiting use of any “stimulus” funds for facilities that are used for sectarian instruction, religious worship, or a school of divinity.

The list goes on. These and similar provisions will mean fundamental changes in our society. In many instances, the bill would establish policies that directly challenge widely held American values.

We are appalled that Congress is even contemplating such profound changes with so little openness and due diligence. In the past, major policy changes in our welfare system, or health care, or trade policies, etc., were always, quite properly, preceded by extensive public conversation and full debate. That is how a democracy should make important decisions.

The failure of Congress and the Administration to allow that debate is damaging to our democracy. Both chambers of Congress suspended their budget rules to push it along. And both the President and the leaders of the House and Senate have violated their solemn promises that the bill would be available for several days of public review prior to voting, so that the American people might have a chance to learn what is in the bill and to make their views known to their elected officials.

This reckless approach to governance can only undermine public faith in our elected officials and our government as a whole. We call on Congress and the Administration to live up to their promises and stated ideals, and give the democratic process a chance to work.

Sincerely,

Edwin J. Feulner, Ph.D.
President
The Heritage Foundation

No Non-Union Labor Need Apply for Federal Construction Contracts

Barack Obama has paid back his union campaign supporters by signing an Executive Order requiring governmental agencies to only enter into contracts for large-scale Federal construction with contractors who are union shops. No non-union labor can now work on federal construction projects.

EXECUTIVE ORDER: USE OF PROJECT LABOR AGREEMENTS FOR FEDERAL CONSTRUCTION PROJECTS

Obama’s First Tax Increase

Today President Obama signed into law the first tax increase of his administration. From Amanda Carpenter at Townhall:

President Obama approved his first tax hike today.

The bill he signed to expand the State Children’s Health Insurance Program contains a provision to increase taxes on tobacco by a whopping 155 percent. That means the federal taxes on cigarettes have gone up an additional 61 cents a pack. This brings federal taxes on a pack of cigarettes to $1 per pack total.

(It also means the nation will need to maintain a steady level of smokers to subsidize kids health care, an unlikely outcome in light of a fledgling economy and increased taxes on the tobacco.)

Despite his pledges not to tax low-income Americans, Obama’s tax increase on tobacco will disproportionately punish the poor, who are more likely to become addicted to cigarettes.

55 percent of smokers are considered “working poor” and one in four live below the poverty line.

This will be the first of many new taxes or tax increases. Many of those will adversely impact the poor. Raising taxes, we all know, has a depressive affect on tax revenue, so the funding of the SCHIP program will have a funding source that should diminish over time. New sources of funding will have to be found for this new bureaucracy for this new law that will not achieve what it is intended to achieve.