When I was in the Legislature, I took a “sister state” trip to the region of Umbria, Italy. While touring the city of Perugia, an Etruscan city, the Mayor of the City pointed out a brass plaque above the Mayor’s chair. It turns out that the plaque was written in 300 or 400 B.C. by the King of Perugia to relieve the peasants of that period of their taxes for 10 years. That King became so popular that his “generous” act was remembered 2400 years later. Upon hearing that story, I said to one of my Democrat colleagues with me “See, people remember politicians like me, that is, those who cut taxes, for ages, they kill politicians like you, that is, the ones who raise their taxes.” He got this blank look on his face, and said, “You’re right, I never thought of it that way.”
I tell this story, because today, I read a blog by Joe Mathews titled “In California, Taxes Are Almost Always Temporary” and Mathews thought this to be a problem (http://www.foxandhoundsdaily.com/2016/10/california-taxes-almost-always-temporary/). His premise is absolutely incorrect. First, the taxes we pay every year have never been temporary. Second, even the tax increases over the last 30 have, by and large, not been temporary.
Let’s start with the sales tax increase of 1990, intended to take care of the 1989 earthquake, and supposed to expire in 1993. Still with us, now allegedly devoted only to law enforcement (we are still told we don’t have enough money for cops). Next, the doubling of the gas tax increase that same year intended to solve our traffic congestion issues, still making California gasoline the most expensive in the country, and still the worst traffic. Now, Pete Wilson’s tax increase on the rich in 1991, intended to get state spending through the early 90’s recession, did just that, and expired in 1994. State general fund revenue expanded from $45 billion to $79 billion over the next 6 years. No harm to state revenue from the expiration of that temporary tax, even though Democrats and bureaucrats thought the entire state budget would collapse if those taxes were not made permanent. Then, the tax increases in 2001 (intended to get state spending through the recession at that time), still with us. Of course, Schwarzenegger’s tax increase in 2009 (intended to get state spending through that recession at that time) did expire, but the ruling’s class response was to demand a different “temporary” tax increase. That tax is now on the ballot to be extended … again. Mathews seems to say that making that second tax increase “temporary” is a problem, even though it was sold as a “temporary” fix to a “temporary” budget problem caused by an economic crisis, just like every other tax increase has been sold over the last 30 years.
Here is the problem, with the tax increase of 1990, the voter imposed spending limit was repealed as well. The alleged crisis? Traffic. Then Governor Deukmejian thought he could solve the traffic problem with the initiative that raised the tax and repealed the spending limit then. He was wrong. What he did do was allow state spending to explode. State spending overall has exceeded inflation and population increases over the last 30 years. The usual pattern has been: (1) the economy explodes, driving billions of new dollars into the spending formulas (both constitutionally and legally driven), setting very high spending bases; (2) the economy slows because of government overregulation or intrusion into the private markets, and the unusually high budget baselines driven by unnecessary spending in the salad years, create massive deficits in the recession years (most recently 1991-3, 2001-4, 2008-11); (3) In these times of crisis, rather than tighten their belts like the rest of us peasants, the ruling class demands a tax increase to cover the deficits they caused, saying it will only be temporary to get the state through the crisis. Then, as soon as the crisis subsides, they say they need to the tax to be permanent. That is the problem, not temporary taxes. Massive spending increases in good times should not lead to tax increases in bad times, and then a claim that, when the crisis has subsided, the tax is still necessary.
I agree with Mathews that the “constitutionally” driven budget requirements should be eliminated. What I do not agree with is the “crisis” driven tax increase paradigm. Government cannot overspend when it is flush, and then claim that its overspending ways should be sustained when the private sector slows down. You and I have to tighten our belts, so should they. And quite frankly, they don’t.
Increased government spending leads to tax increases which leads to a loss of your freedom.
I disagree with temporary taxes in times of alleged “crises”, because government always wants to make them permanent, even though government decisions created the crisis in the first place. Since 1970, government spending per person has increased faster than population and inflation. In 1970, we had the best schools in the country, today we have among the worst. In 1970, we had a freeway system that was the envy of the country. Today, it is the butt of late night jokes. In 1970, we had 183,000 bureaucrats in state government. Today, it is over 353,000. In 1970, general fund spending was $4.8 billion, today is $122 billion. Our government keeps costing more, and delivering less. Sacrificing freedom for a government that is collapsing is insanity. From this point forward, until government brings its spending under control, no temporary, no permanent, no fee increases, nothing for the rulers. Set the peasants free, just like the King of Perugia did 2400 years ago.