Push For Oil Severance Tax Ignores Consequences
The chorus is growing louder that an oil severance tax must be part of the budget solution. Proponents of the tax on extracting oil from the ground or from under the sea echo the same refrain that California is the only oil producing state that does not levy such a tax. What supporters of the tax fail to mention is that oil production is already heavily taxed in California. Adding an oil severance tax would zoom California oil producers to the top of the tax chart by a significant degree and that has consequences.
Oil companies in the Golden State pay corporate income taxes, property taxes and sales taxes on their business. Not all oil producing states assess all these taxes, nor are the tax rates the same as high income, high sales and high corporate tax California.
Budget Smoke Arrives Early
Gov. Arnold Schwarzenegger has figured out a way to jumpstart the budget debate by pumping out the fiscal smoke and setting up the financial mirrors at the beginning of the process instead of at the end.
As state law requires, the governor produced a balanced budget last Friday. But to make those numbers work, Schwarzenegger and his financial team were forced to work more magic than the faculty of Hogwarts School.
Let’s take the big stuff first. After the governor added in some new revenue and subtracted some cuts, the budget was still out of balance.
But if you just figure that the federal government owes the state some $6.9 billion –and will actually pay it – then abracadabra, the budget’s in balance.
Plan B: Parsky’s plan would keep $24 Billion from Washington Bureaucrats
Last
week, Governor Schwarzenegger set as one of the highest priorities for his last
year in office the elimination of California’s status as a "donor state." That
is, the Governor intends to end the current practice of California getting back
only 78 cents for every dollar it pays in federal taxes.
Without question, Schwarzenegger’s goal is important.
According to the Tax Foundation, between 1981 and 2005 California’s donor
status has led to a cumulative donor deficit of almost $490 billion. But as
Joel Fox and John Wildermuth pointed out in their commentaries last week, getting
the federal government to fork over more money isn’t going to be easy. The
federal government is facing its own budget problems and – as Nancy Pelosi confirmed
recently – isn’t inclined to help Californians solve ours.
What we need is a Plan B.
Paycheck Protection Measure is Back
"To compel a man to furnish contributions of money for the propagation of opinions which he disbelieves is sinful and tyrannical."
This sentiment, written over two centuries ago by Thomas Jefferson, is more applicable than ever today in the case of public -sector unions which collect mandatory dues from their membership to engage in liberal, big-spending, highly partisan politics antipathetical to many of their members who foot the bill.
In 2005 we spearheaded Proposition 75, the "Paycheck Protection Initiative," to require written consent of public employee union members before union dues could be taken from their salaries for political purposes. The unions outspent us 10-1 and only narrowly defeated Proposition 75.
In 2010 the outcome can be different — for several reasons: