We have a Tax and Spending Problem

Bonnie Reiss
Director of the University of Southern California's Schwarzenegger Institute

"We don’t have a tax problem , we have a spending problem!" We in California have heard this sold brilliantly from our Governor and economic and business leaders for 4 years. It makes a great "sound byte", but hoping those visiting Fox & Hounds have slightly more depth than viewers of Fox or CNN,

I would like to say that this is both wrong and wildly simplistic.

We have BOTH a tax and a spending problem. We rely on tax revenues that fluctuate and are unfair to the middle class. Yeah, remember the middle class, the largest group of working Americans neither dems or repubs seem to champion?

We offer some truly unfair tax breaks, like the yacht tax credit — other than Senator Dick Ackerman and a few hundred yacht owners, who cares! We don’t put enough revenue aside each year in our "rainy day fund", so on a big declining revenue year like now, we are royally screwed.

And our spending formulas and spend happy legislators insure ever increasing budgets with little oversight that any of these billions are going to be used effectively.

Since its budget time in Sacramento now, its hard to resist this topic. I have little hope the political system will allow true and fair reform, but maybe crisis will create opportunity for modest reform.

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