Sunday, August 2, 2009

California, Republicans and Taxes

Readers who are not from California may be only vaguely aware of the Golden State's continuing budget woes. Since Proposition 13 put a cap on property taxes back in the 1970s, many anti-tax ballot initiatives have followed and several have passed, making it more and more difficult for the state to raise money for services that help the citizens in many vital ways. Unlike the federal government, California is one of many states that forces the budget to be balanced. It is a lie agreed upon, unfortunately, and 'balanced' budgets that are finally voted on in the summer often turn out to be horribly out of balance by year's end, and the miserable process starts all over again.

California Republicans have one organizing principle, the one spoken by George Herbert Walker Bush during his first and only term as president. "Read my lips. No new taxes." They oppose raising any tax and they oppose starting new taxes. Arnold Schwarzenegger went against this idea, at least in theory, when he brought up that legalizing marijuana and taxing the newly legal business, especially the many growers in the fertile lands of Northern California, could be a way to increase revenue, but this is just a pipe dream, the Governator blowing smoke when there is a real, serious and continuing emergency in this state. This may happen in my lifetime, but I highly doubt it will happen during Schwarzenegger's tenure.

A more realistic new tax proposed and rejected during this current crisis negotiation was a tax on drilling oil in the state. It's easy to forget that the Lower 48 actually still produces a lot of petroleum. It only seems like a little or nearly nothing because Americans are such pigs when it comes to consumption.

I got an e-mail that said that California is the only petroleum producing state in the United States that doesn't tax the oil companies for drilling in the state. I was amazed at the claim, and it turns out to be substantially true. In this Los Angeles Times column from the business section, that there are 22 states that are considered major oil producers, California is third on that list and the only one that has no tax on drilling. In 2006, Proposition 86 would have imposed a tax on drilling and sent the revenue into state run programs to reduce our dependence on fossil fuels. It went down to defeat, largely because of money spent by Chevron, California's own child of the octopus that was born as Standard Oil back in the 19th Century.

Even Prop. 86 would have been a very modest measure. It capped taxes at 6%. Those rough and rugged, pro-business folks up in America's Last Frontier burden the Alaskan oil companies with a 25% tax for doing business in Alaska, and a boatload of that cash is handed to every Alaskan citizen as a yearly bribe to keep living in that distant and inhospitable land. And you betcha, Alaskans really like this government program, and have done everything they can to keep the state government away from their free money.

Maybe that's why Sarah Palin quit. She hated waking up every morning being just another cog in the socialist state machine.

I've heard several different numbers thrown around, so let me be a little vague so that I can be accurate. If California were a nation unto itself, our economy would be one the ten largest in the world. More that just a lot of money and a lot of natural resources, California as a state has a tremendously diverse economy, so downturns in value of agriculture or petroleum or high tech products can hurt parts of our economy, but not bring the whole beast crashing down. The word "ungovernable" has been thrown around a lot to describe the continuing budget mess in California, but the real problem is the modern version of the Republican Party, currently a serious minority in the state and doing everything it can to dwindle even further. There are solutions to our problems, but they will not come from the Republicans as they are constituted today.

A new and honest standard bearer for the conservative cause needs to emerge. Whether it is a reformed Republican party purged of the psychotics and plunderers or some third party that comes forward, the rotting corpse of what was once an honorable institution brings nothing forward now but pestilence wherever it goes.

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