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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]

Pro-Tax Group Changes Name, Not Goals
Hi-tech capitalists who haven’t learned the lesson of overtaxation...

[Jon Coupal] 4/4/05

Modern plastic surgery promises to correct almost any shortcomings we may have in our self image. Women are told they will be more attractive with a breast augmentation, a facelift or a tummy tuck. Men are included, too. It is implied that they will be more likely to get a promotion or meet women if those bags under the eyes are removed, hair is transplanted or a chin implant is inserted to provide a stronger jawline.

In a similar vein a powerful Silicon Valley business association with a reputation for lobbying for higher taxes is looking to overhaul its image. The Silicon Valley Manufacturing Group, founded in 1978, has renamed itself the Silicon Valley Leadership Group.

According to the group's CEO, Carl Guardino, manufacturing is no longer as important in this era of off-shoring and the new name provides a clearer description of its function.

Perhaps the new name is a more honest approach. After all, the group has been active in addressing issues well beyond the business interests of its members. Affordable housing, traffic relief and education are all high on its agenda. So, too, are tax increases, which invariably the old Silicon Valley Manufacturing Group proposed as a solution to each and every problem faced by the community.

It was Silicon Valley dotcom millionaires and billionaires who funded much of the Proposition 39 campaign in 2000, which resulted in making it much easier to increase property taxes for school bonds.

And every Legislative session these same leaders back legislation to make it easier to raise taxes for transportation. However, the taxes they promote, like sales tax increases, are always ones that fall most heavily on others.

Traffic congestion in the Silicon Valley area is heavily aggravated by the member firms of the leadership group, yet their conversation never turns to asking those firms making major contributions to traffic gridlock to pay more to mitigate the problem.

Ironically, many of these high-tech leaders have proven themselves to have some of our best and brightest minds, yet they seem unable or unwilling to come up with solutions to societal problems that do not involve massive infusions of cash to be supplied by others. And they are not at all stingy when it comes to seeking tax breaks for themselves. Not long ago, Silicon Valley leaders were advocating a higher tax on homeowners here in California on the same day their lobbyist in Washington was advocating for an R & D tax credit for their industry.

Perhaps the problem lies with the fact that the expertise of so many Silicon Valley leaders lies in the fields of electronics and engineering, definitely not economics.

Ignorance of economics allows one to think like the majority of members of the state Legislature. They suppose the best source of additional government revenue comes from higher tax rates rather than from increasing productivity in the private sector.

A rising tide raises all boats and the best way to do this to grow the economy and to accomplish this in our high tax state, it is necessary to hold the line on tax increases. Unfortunately, this lesson is lost on most high-tech leaders.

For better or worse the Silicon Valley honchos no longer have the financial clout they once had. The dotcom bubble burst has become a synonym for financial ruin. Do these executives really believe that increasing taxes will bail the state out of its problems? Wasn't it the expense, including taxes, of maintaining manufacturing in Silicon Valley that caused their firms to outsource so many jobs overseas?

The Silicon Valley Manufacturing Group may have adopted a new name, but like the leopard, it is unable to change its spots. CRO

Jon Coupal is an attorney and President of the Howard Jarvis Taxpayers Association.

copyright 2005 Howard Jarvis Taxpayers association



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