Undoing an “Anti-Stimulus”
Some of California’s largest and most important corporations are bracing for a larger than normal tax bill due on May 31, 2009. On that day, California companies will pay approximately $1.5 billion more in state taxes than they normally would have. I know what you are thinking, with revenues down and layoffs up for most companies, why are they paying more in taxes, further eroding their ability to keep jobs and sustain their businesses? Because a little-known bill was passed as part of the 2008-2009 budget that says they have to.
SB 1X 28 was a bill that was hastily enacted last year as part of the 2008-2009 state budget. This bill imposes a 20 percent strict liability penalty on large businesses that underpay their taxes for any reason whatsoever and will force businesses to pay a half billion dollars more in estimated taxes they do not owe in order to avoid the penalty. In simple terms, California’s most successful companies are being required to loan the state money at the tip of a spear instead of using that money to invest in jobs or bringing new products to the marketplace. SB 1X 28 was passed before it was in print and without public input or any vetting by a legislative committee. The bill was inaccurately described to lawmakers and the media as a bill to double existing penalties for tax scofflaws.
Governors Make Sense…and So Does a Member of the Board of Equalization
Last Friday, I questioned how much emergency power Governor Schwarzenegger might be able to use given the ruling in superior court that backed up his order to furlough state workers twice a month due to the budget crisis, which the court declared an emergency. Using emergency powers to streamline the regulatory process will get projects up and running faster, which is better for the economy.
Now, we hear from three former California governors that using emergency powers and streamlining environmental procedures is a way to help get us out of the fix we’re in. Former governors George Duekmejian, Pete Wilson and Gray Davis published a commentary in the Washington Times yesterday supporting the use of emergency powers to push along projects that they expect will be funded by the president’s stimulus package. You can read the Washington Times piece here.
The “Moderate Republican” Myth
As we enter a supposed “post partisan” age in Washington, politicians and pundits have begun yearning for and writing about that “pre-partisan” age – usually set during the New Deal period and following – when our political parties (Republicans particularly) were populated by “moderates,” working together for the common good. Forgotten are these words from moderate icon Harry Truman: “I don’t like bipartisans. Whenever a fellow tells me he’s bipartisan, I know he’s going to vote against me.” But this revisionist effort is not only historically inaccurate; at a time when our politics have become so complex, the linear “liberal/moderate/conservative” nomenclature has proven insufficient, further dividing us.