There is a lot of conversation about taxes lately, perhaps
not strange since taxes are due to both the federal and state governments
today. But, the tax chatter is about potential new taxes that some or all citizens
will have to pay if certain politicians or interest groups have their way.

President Barack Obama last week called for a tax on the
wealthy, which he described as tax filers making over $250,000 a year. Governor
Jerry Brown continues his campaign to re-start the state income, sales, and car
taxes the legislature and Governor Schwarzenegger put in place in 2009. And, as
noted by Steve Harmon in yesterday’s Contra
Costa Times
, labor unions are organizing a number of approaches to tax
increases in California, including ballot measures to tax such products as oil
and tobacco.

One tax that received attention in Harmon’s article is the
California Federation of Teachers’ proposal to tax the wealthy. The president’s
proposal on taxing upper end taxpayers could put a crimp in that approach here
in California. On the other hand, should congress stall the president’s plan, the
debate to tax the rich would move front and center here if the union qualifies
a ballot measure.

As I noted
earlier this month
, there are a number of problems with "tax-the-rich"
plans. One notable issue is that the government won’t get the revenue it
expects. That is what happened in Oregon when voters agreed to an income tax increase
in January 2010 for taxpayers making more than $250,000 a year.

As the Wall Street Journal put it nearly a year later:
"Oregon raised its income tax on the richest 2% of its residents last year to
fix its budget hole, but now the state treasury admits it collected nearly
one-third less revenue than the bean counters projected. The sun also rose in
the east, and the Cubs didn’t win the World Series."

Yes, there are certain outcomes you can predict with almost
perfect certainty, and the rich changing behavior to deal with a tax increase
is one of them. A bit of odd corroborating evidence came our way in an article
in Miller-McCune
on foreign soccer players in Europe.  Three economists studied the actions of these
mobile soccer players and their decisions on where to play and concluded "that
tax rates do indeed affect the decision of top-paid players on where to live."

But, the tax proposals will not be on just an income tax
increase for upper-income earners. No one should be surprised about all the
different approaches to raise taxes. Remember, the public
unions marched on the state capitol
one year ago this month with a list of tax
increase proposals that would supposedly raise $40-billion in new taxes.

As you pay your taxes today, don’t think this will be the
end of hearing about the "T" word for a while. The tax debate will heat up over
the summer and extend into the 2012 election year. That prediction is as about
as sure the one that the Cubs will not win the World Series.