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Jon Coupal- Columnist

Jon Coupal is an attorney and president of the Howard Jarvis Taxpayers Association -- California's largest taxpayer organization with offices in Los Angeles and Sacramento. [go to website] [go to Coupal index]

The Unholy Trinity of Special Interest Tax Increases
Propositions 63, 67, 72
[Jon Coupal] 10/30/04

Any observer of California public policy knows that "ballot box budgeting" (BBB) is an insidious trend occurring in virtually every election cycle. In whatever its form, BBB directs scarce public dollars and dedicates them toward a favored program or service benefiting a narrow special interest. Whether it takes a slice of existing revenue or is accompanied by a new tax or fee scheme, ballot box budgeting has created a patchwork of special taxes, carve outs, funds, and programs across the California public finance landscape.

The problems with ballot box budgeting go beyond the harm associated with California's growing public debt load. (Two of the measures on the upcoming ballot are special interest bond proposals, one for "children's hospitals" and one for "stem cell" research). Any responsible California citizen should be very skeptical about taking on new debt adding to the "house of cards" financing our elected leaders have constructed over our heads.

As bad as additional debt is, at least -- theoretically -- it will be paid off in the future. Even more insidious are the BBB proposals which create permanent programs with permanent tax increases.

The statewide ballot we face in just two weeks is a prime example. Three major special interest tax increases are on the November ballot that seek to fund one public policy goal at the expense of all others, each funded by a large tax increase that is not necessarily tied to the program. Collectively, these three propositions raise taxes by nearly $10 billion per year, each to create a new government bureaucracy and not one penny of the revenue to reduce our existing debt.

Proposition 63 -- A tax increase on high income earners and S-chapter corporations to fund mental health services, this multi-billion dollar tax increase over five years exacerbates our state's volatile reliance on the upper tax brackets, with no rhyme or reason why this revenue source should pay for this program.

Proposition 67 -- The Phone Tax. This half-billion tax increase on telephone services to pay for emergency services is a head-scratcher, leaving you wondering why this tax should pay for this service? Moreover, there are no limits on this tax as it is applied to businesses and to cell phones. Think about that every time you use your cell phone to make a call!

Proposition 72 -- This $7 billion tax on employment, funded by employers and workers, funds a government-run health care scheme that could cost hundreds of thousands of jobs without addressing the underlying cause of a national health care problem.

In response to these three BBB proposals, two of California's leading advocacy groups, the Howard Jarvis Taxpayers Association and the Small Business Action Committee, have created the No New Taxes Committee (NNTC).

All Californian must stand up to the temptation of higher taxes and ballot box budgeting. Individuals who are not millionaires or business owners need to step back and look at the bigger picture. Does the state government need to be bigger? If businesses leave, what will that do to California's employment outlook? If millionaires are taxed today, will the tax-raisers look to extend those schemes to lower paid employees later?

For businesses, even if your particular industry or clients are not directly impacted by these measures, if policy makers are not shown that BBB measures will be rejected, then on the next ballot, your industry may very well be the next target of a special interest tax increase to fund some other program. Furthermore, it is ALWAYS in the interest of California's business community to strengthen and nurture California's long record of opposition to tax increases.

The bedrock principle is simple: All taxpayers are in the same boat together and we either float or sink together.

This column is rarely used for a shameless plea, but these proposals are so dangerous, we're making an exception. Please help us defeat these three dangerous tax measures on the November ballot and join the No New Taxes coalition today. Visit our website at to see how you can help. CRO

copyright 2004 Howard Jarvis Taxpayers association


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