
SHAKEDOWNS
I’ve received a number of calls from reporters over the last few weeks seeking my reaction to the fact that many tax hike bills have stalled in the Legislature. Despite the passage of Prop 30 giving California both the highest marginal income tax rate and the highest state sales tax rate in America, the sheer number of legislative proposals seeking even more revenue is staggering. Especially common are proposals to hit unpopular products or industries like cigarettes, soda, and oil extraction. But, for now, it appears that most of these tax hikes have lost traction.
When I was younger and more naïve, I would have shared the reporters’ assumption that the Legislature isn’t as enthusiastic to raise taxes as we originally feared once the Democrats achieved their super-majority status. But I’m older, wiser and far more cynical than I used to be and, more importantly, I’ve worked within two blocks of the Capitol and have observed what really motivates its inhabitants. In a word, it’s money. And the interests targeted by these bills have lots of it.
For example, not long ago soft drink manufacturers rushed to contribute millions to Jerry Brown’s… Read More