Poll Question Reflects a Concern for Business

Joel Fox
Editor and Co-Publisher of Fox and Hounds Daily

The USC Dornsife/Los Angeles Times poll asked how voters
felt about giving more taxing authority to local governments. Curiously,
however, the question asked in the poll did not reflect the proposal being discussed
in Sacramento.

The question dealt with a
number of areas that local governments currently do not have the power to tax
that the state does: alcoholic beverages, sweetened beverages, tobacco products and oil
extraction.

The bill authored by Senate President Pro Tem Darrell Steinberg granting
new taxing authority to local governments casts a much wider net. The bill
would extend taxing authority over some very big items: transaction and use
tax, vehicle license tax, and personal income tax.

Do you suppose if the poll question included these items – especially
giving local government power to establish a personal income tax – the results
would be the same? Highly unlikely.

The poll result showed voters support for the narrower proposal at 58%
to 38%, slipping to a 55%-39% edge when some pro and con arguments are made.
The con arguments focused on job creation and business being hurt by the taxes.

Of course, in a campaign over such a proposal, the con arguments would
be more sophisticated, from a hard push on the cost of government, including
pensions eating into the funding for local services, to the effects local
taxing authority could have on a fragile economy.

Narrowing the poll question to taxing products does focus the tax issue
on business. Businesses are concerned when voters who do not use products and
feel the tax would not affect them can tax those products. In a larger economic
view, taxing the products likely would reduce transactions and cut down on
sales, or in the case of an oil extraction tax, reduce production, which could
have a negative ripple effect on the economy.

Steinberg has indicated he will not push his bill, which has already
passed the Senate in its broad form that includes the income tax and vehicle
license fee provisions. He told
the Los Angeles Times
he was "acutely aware" that the business community
dislikes the bill. He hopes to work on a wider tax reform for next year.

Still, the poll question might be considered a forerunner for narrowing
the bill with a focus on business items and away from the explosive issue of
personal income tax. A campaign against the bill would center on job loss in
any referendum campaign. With multiple referendum proposals already floated
following actions in this legislative session, assuredly a referendum would be
filed if the local tax measure were signed into law.

Business has opposed the Steinberg bill SBX123
from its introduction. If the bill narrows so that business feels it is a
target of the bill, opposition to the measure would be fierce.

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