Tax reform: Not now, but maybe later
In his recent and provocative post, Joel Fox suggested that the
time may be approaching for a "big deal to solve California’s budget problems."
The big deal would include both tax and budget reform, although Fox cautioned
that voters may not look kindly on a complicated measure rushed to the ballot.
I would add another caution. Like Spring, the coming
of a new Administration breeds hope and optimism – which is a good thing. But
tax reform can be nasty business, and should only be attempted during
propitious circumstances. Governor Schwarzenegger’s experience with his Tax Commission
showed that even the best minds producing a creative and worthy proposal were
doomed to failure. Why? The environment lacked two key preconditions for
success.
First, the state was broke. Tax reform should never
be attempted when the budget is seriously out of balance, otherwise every
proposal will be viewed as a way to get well, rather than promoting equity,
efficiency or growth. The temptation to use a legitimate reform effort as a
smokescreen for more net revenues becomes too great, and opponents of reform
can too easily make that accusation, even if not true.
If California Is Doing So Great, Why Are So Many Leaving?
Cross-posted at New Geography
Superficially at least, California’s problems are well known. Are they well understood? Apparently not.
About a year ago Time ran an article, "Why California is Still America’s future," touting California’s future, a future that includes gold-rush-like prosperity in an environmentally pure little piece of heaven, brought to us by "public-sector foresight."
More recently, Brett Arends’ piece at Market Watch, "The Truth About California," is more of the same. California’s governor elect, Jerry Brown, liked this piece so much that he tweeted a link to it.
The optimist’s argument about California’s future ultimately hinges on the creativity of the state’s vaunted tech sector, in large part driven by regulation promulgated by an enlightened political class and funded by a powerful venture capital sector.
No fundamentalist evangelical speaks with more conviction or faith than a California cheerleader expounding on the economic benefits of environmental purity brought about by command and control regulation.
VA Federal District Judge Holds Obamacare Unconstitutional, In Part
Monday morning’s news started this
week, the last full one before the year-end holidays end this year, off with a
bang. The 42-page Memorandum Opinion of
USDC Judge Henry E. Hudson, sitting in the Eastern District of Virginia,
Richmond Division, was issued and filed Monday morning.
In what can only be called a
stunning blow to the Obama Administration, Judge Hudson’s Memorandum Opinion
holds only a portion of the massive Health Care Legislation (officially titled
the "Patient Protection and Affordable Care Act," but known by many simply as
"Obamacare") to be unconstitutional – the essential, and controversial,
ingredient in the legislation which requires millions to buy health
insurance. Judge Hudson’s Opinion calls
this the "pivotal enforcement mechanism" of this "health care scheme," (again,
known officially as the "Minimum Essential Coverage Provision," or simply,
Section 1501 of the Act.)
Virginia, there might be a Santa Clause: Judge Strikes Health Care Mandate
Yesterday, Virginia Judge Henry Hudson found the individual health care mandate – a key part of national health care reform proposed by President Obama – unconstitutional. Putting the kibosh on this mandate, namely the provision that says Americans without health coverage must purchase their own insurance starting in 2014, may be the first in a line of rulings on the constitutionality of the Obama-care law and its impact on states.
A proud Ken Cuccinelli, Virginia’s Attorney General, claimed victory saying the ruling was the right thing for Virginians who now won’t be forced to buy health insurance. He said Congress had gone too far and that it was unfair to require individuals to purchase a product from a private entity – in this case – an insurance company.
Judge Hudson agreed, ruling that the health care mandate exceeds the federal government’s authority under the “Commerce Clause” and that it was beyond Congressional power under the Constitution.