This morning there we be a press conference held by legislative Democrats, where they announce a "compromise" plan between Senate and Assembly Democrats in terms of how big of a tax increase they want to enact. FR readers will recall that Perata and his left-wing Senate colleagues were calling for around 12 billion dollars in "new revenue" (taxes) while over in the Assembly, Karen Bass and her fellow Democrats in the lower hours were looking at shy of 7 billion dollars in higher taxes. You will be "pleased" to know that after much wrangling, horse trading, and "hating" on those who create economic opportunity in California, Democrats have come to an agreement: They want taxes in California to be hiked by a staggering $9 billion + dollars.
Courtesy of the San Diego Union Tribune, (most of) their proposed tax hikes are broken out thusly:
PROPOSED NEW TAXES
- $5.6 billion: Impose a 10 percent rate for taxpayers with joint returns above $321,000 and an 11 percent rate above $642,000
- $1.1 billion: Suspend for three years businesses’ ability to carry a portion of their tax-deductible losses into following fiscal years.
- $815 million: Decline to adjust tax brackets for inflation, proportionally hitting hardest taxpayers with joint incomes of $97,000 or more.
- $470 million: Increase corporate tax rate to 9.3 percent.
- $215 million: Reduce the dependent income tax credit for taxpayers with adjusted gross income exceeding $150,000.
Fortunately for California taxpayers, the California Constitution requires a two-thirds vote to pass both tax increases and a budget. I spoke with several Republican legislators from both chambers last night, and there is no interest whatsoever in supporting this proposal. It is dead in the water. Not to mention the fact that Governor Schwarzenegger has reiterated over and over again that he is opposed to raising taxes to resolve this year’s budget challenge.
I guess, at some point, legislative Democrats are going to have to understand, especially with a bad economy out there, that if government can grow so quickly over a short period of time, that state government can also shrink as necessary to "live within its means" — because that is what Republicans are saying. State government, as a percentage of the economy, is big enough.
Then again, maybe Democrats will never get it — and we’ll go without a budget in perpetuity. That certainly is a more likely outcome than Capitol Republicans voting to raise taxes like those outlined above.
At some point, the spend-a-holics that are Capitol Democrats are going to have to acknowledge their over-spending addiction, as a first step towards dealing with it. As long as their prevailing attitude is to continue to expand the welfare state and increase wealth redistribution by government, we’re going to be in for a long, long, budget divide.
In the meantime, the only two songs in the Democrat juke box continue to be "Tax More" and "Spend More" – how tiring, and how unfortunate for the taxpayers of California.
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