the proverbial wolf that continues to lick the knife blade because  it
enjoys the taste of its own blood, the Democrats are back with  another
huge tax increase.

At a time when the state’s economy and taxpayers are still staggering
under the burden of last year’s $12.6 billion tax increase, Democrats
are pushing a plan to raise taxes by yet another $5 billion and to
borrow an additional $8.7 billion.

Among the proposals are extensions of the increases in the sales,
income  and car tax that were approved last year by the usual suspects,
but  were due to expire after two years.  This goes to prove the adage
that  there is nothing so permanent as the temporary.  In a recent
column,  Joel Fox, the president of the Small Business Action
Committee, provided  a number of excellent examples of "temporary"
taxes that seem never to  disappear.  Among those is the federal
telephone tax established to pay  for the Spanish American War, which
remained in place for 108 years  after the war ended.

Politicians know how to play the game.  To minimize opposition to a new
tax they market it as temporary.  But once taxpayers become accustomed
to paying it, they look to extend it or make it permanent.  For a
California example, look at the 1.25% sales tax increase Pete Wilson
backed in 1991 to deal with a budget gap.   A half-cent was supposed
to  be temporary, but when it came time to expire the Legislature
placed it  on the ballot promoting it as necessary for "public safety."
Voters —  by then used to paying the higher tax — swallowed the hook
and we  continue to pay the entire 1.25% increase initiated almost
twenty years  ago.

As for the borrowing, our state’s credit is so bad, lawmakers want to
borrow money against the California Beverage Recycling Fund in an
arrangement known as securitization.  Basically, it would allow them
to  spend money on current programs by guaranteeing repayment with
future  recycling revenues. What most Californians think is a fee
designed to  make sure that beverage can and bottle litter is picked
up, and that  those resources are recycled, turns out to be just
another Ponzi scheme  by the Sacramento politicians. However, it
clearly illustrates the  contortions through which lawmakers will go to
allow themselves to  continue to spend regardless of the economic
realities or the burden it  places on ordinary taxpayers.

Average Californians do not have to be told times are tough. An
unemployment rate of 12.6% — over 21% when the underemployed are
counted –  may be just a number to most people, but  virtually
everyone  knows the real impact of our failing economy because they
have a friend  or family member who is unemployed, even if they
themselves continue to  have a job. These statistics represent real
suffering by real  California families.

Legislators should not deceive themselves. Only part of the problem is
linked to the national recession. The state’s problems pre-date the
recession and reflect a deeper policy-induced crisis.  These tax
grasping politicians would do well to review the 2010 edition of Rich
States, Poor States, an economic competitive index of states by
economist Arthur Laffer and published by the American Legislative
Exchange Council. In the category of economic outlook, California
ranks  46 out of 50 with 50 being worst.  It is no coincidence the
states  ranking near the bottom are high tax states that are suffering
a high  level of domestic out-migration, which Laffer calls the "moving
van  effect." In other words, people and businesses are mobile; they
can  leave unfriendly economic states and move to tax friendly states.
In  domestic migration, California ranks a dismal 49, meaning that
taxpayers  are fleeing our state.

However, in spite of the evidence, lawmakers move inexorably forward
toward economic collapse. In an almost cartoonish satire of their lack
of concern for the interests of average taxpayers, last week, the four
legislative ringleaders behind the 2009 tax increase blithely traveled
to Boston to accept Profiles in Courage Awards from the Kennedy
Foundation for their raising taxes in face of public opposition — and
in defiance of logic. Meanwhile, those California taxpayers who have
not  left the state, soldier on without accolades.