It would appear that the Governor is prepared to draw a line in the sand over whether the payroll and income tax increases that he proposes as part of his government-mandated healthcare proposal are, in fact, taxes!

 The plan, in an of itself, is a repudiation of a lot of rhetoric that we have heard from Arnold Schwarzenegger going back to well before his election as Governor, as he has touted himself as a strong advocate of the free-market system. You can ask any of the centers of free-market thought from around the United States — the Cato Institute, the Foundation on Economic Education, the Heritage Foundation, the Reason Foundation, the Pacific Research Institute, the Claremont Foundation, and even our friends at the Wall Street Journal — I have personally spoken with or corresponded with folks from all of these bastions of free-market thought — and they are consistent with their opposition to the Governor’s proposal.

That said, the Governor apparently seems intent to refuse to allow the tax increases that would pull in billions of dollars in coerced revenue into state coffers to actually be called taxes. Governor, we have news for you. Since the beginning of time, liberals have been advocating tax increases under that same argument — but by and large they don’t have the moxie to try and say they are not a tax increase. Central to the plan is a proposed 4% PAYROLL TAX on businesses with ten or more employees that do not provide healthcare insurance to their workers. Also integral to the plan is an INCOME TAX on healthcare professionals (doctors and nurses).

Now the logic, according to the Governor, is that a tax is ‘technically’ not a tax, if the money that government is coercing from someone is going right back to help that person. Well, guess what, that is the entire mandra of socialism — that the government can provide better than the individual. Using the Governors own argument, you could go out there and impose a $5000 per child tax on every family in California, and as long as that money is put into a big fund that goes back to help children — education, healthcare, etcetera — well, than this is not a tax, it is a fee.

I supported and endorsed Governor Schwarzenegger for re-election last year. My Republican Governor ran on a firm pledge to not raise taxes. But I missed the small asterisk that must have appeared every time that pledge was made in writing, with the footnote that he will have such a narrow definition of what constitutes a tax increase so that the promise doesn’t mean much.

Last year, we worked overtime with Team Arnold — especially the Communications Team — helping to bracket Phil Angelides as "The Tax Man" — detailing his $18 billion in proposed tax increases. And we were right to do that — Angelides truly does want to tax everything that moves. But at least he speaks in English — calling a tax what it is — a tax! As we look back at that $18 billion, I suspect that under the Governor’s narrow definition, he may owe Angelides an apology. Angelides should have probably been called the "Tax and Fee Man" by Team Arnold.

I know there are two very real issues at stake for the Governor — the first being that if the proposed tax increases are actually acknowledged to be tax increases, they would require a 2/3 vote in each house of the legislature to be law, and Republicans would never sign off on that. And also the Governor does not want to acknowledge that he is breaking the most solumn vow of his political career – to not raise taxes.

But there is one more very real issue at hand for the Governor to consider — by staking out the ludicrous position that billions of dollars in proposed new taxes actually are not taxes at all, he is quickly losing credibility with a whole lot of people — not only those of us that worked hard for his re-election, but many, such as veteran political writers and columnists, who are all snickering, sighing, and rolling their eyes at this preposterous situation.

This entry was posted on Friday, January 19th, 2007 at 12:00 am and is filed under Blog Posts.