San Francisco Chronicle writer Joe Garofoli recently wrote that California appears to be taking the lead in President Obama’s agenda to address “economic inequality.” But this is bad news for California’s middle class families because, in actually, such a foolish pursuit will put a greater burden on their pocketbooks and stunt economic recovery.
This November, California’s ballot could be crowded with anti-business initiatives, from raising the minimum wage, to capping hospital executives’ pay to possibly imposing an oil severance tax. While Californians may find the left’s rhetoric sympathetic, they also understand the consequences of raising taxes on our economy and how it will harm business because they have seen it firsthand. The notion of making the rich pay their “fair share” is spreading like wildfire, yet the implications would be detrimental to our economy.
One idea in particular would not only damage our economy, but harm both the business community and consumers. California hedge fund billionaire turned environmentalist, Tom Steyer, is proposing an oil severance tax that would tax each barrel of oil extracted in California. It is unclear if his proposal will end up on the ballot or if it will morph into a legislative push. One thing is for certain though, Governor Brown said in his State of the State address that he will not approve any new taxes this year when asked specifically about an oil severance tax.
It is easy for billionaire Tom Steyer to talk about making the rich pay their “fair share” when he has billions to spare – much of it made investing in energy companies. Steyer – the poster child for environmental crony capitalism – fails to mention the consequences of an oil severance tax on the rest of the state and how it will not only effect the rich, but also hit the poor. If we impose higher taxes on California’s oil companies we will certainly see the effects trickle down to small businesses that rely on delivered products and to any consumers of oil.
Voters just passed Proposition 30, a $6 billion per year sales and income tax increase now being spent on pay hikes state worker hires. We already have the highest state sales, income, and gas taxes in the country. The nonpartisan Tax Foundation ranked California as having the third worst business tax climate in the nation. The Small Business & Entrepreneurship Council and Chief Executive Magazine both say California is the worst place in the country to do business.
California needs to focus on how to improve our business climate instead of finding ways to send our businesses – and the citizen taxpayers they employ – out of state. Californians must resist the calls for higher taxes and urge our legislators to manage the surplus of money they have effectively instead of penalizing businesses.