Joe the Plumber and Jerry Brown
If you listen at about the two-minute mark of the video embedded in the N.Y. Post article
of Senator Barack Obama discussing taxes with Joe Wurzelbacher, probably now known forever as Joe the Plumber, you’ll hear Joe suggest a flat tax to the candidate.
Senator Obama replies that he is open to the flat tax idea but thought it would take too high of a tax rate to get the needed revenue.
A decade and a half ago, another Democratic presidential candidate rode the flat tax idea a long way in the nominating process, much further than most pundits thought he would go. That candidate was Jerry Brown, California’s current attorney general.
And, perhaps the once and future governor?
Is the flat tax still an idea Brown would promote in a gubernatorial campaign?
Bond Sales Give CA Time, but Action is Needed
Wall Street’s loss appears to be California’s gain. At least temporarily.
With stocks taking another nose-dive yesterday, investors gobbled up California bonds at a faster rate than anticipated. With their set interest rate, even California bonds backed by our shaky economy seemed preferable to the stock market rollercoaster.
These instruments are known as revenue anticipation notes. Given all that is going on with the state economy, can the state be sure it will receive the anticipated revenue? Yesterday, the Department of Finance revealed the state’s unemployment rate increased to 7.7% for August and the General Fund fell $923 million below expected revenue forecast in the 2008-2009 budget act. Investors are betting on the odds that governments rarely go belly up and are relying on the fact that government has the power to tax.
Dispatch from the Fire Front
I was right in the middle of the Sesnon Fire below the hills in the northern San Fernando Valley. Returning from a trip to the East, smoke billowing from the hills just north of my house. Evacuations called for just blocks away. The cars packed, pictures off the walls, reinforcements brought in … my sons and friend. Many of my walking and hiking areas burned to black. Then we waited to see the how the fires turned, flowed or jumped in the dried hills.
In the dark of the night the bright blaze on the hillside had a hypnotic effect, both strangely stunning and scary at the same time.
The fire burned down to Sesnon Blvd. I call one of my race walking courses the Sesnon Loop. I’m up there all the time. Had the fire jumped that road houses would have surely gone up in flames. The firefighters made a stand here, pushing back the flames. They were on top of the fire immediately, letting some of the dried brush burn down so they would not have to come back and fight the fire in that spot again, then applying water to the fire and putting it out.
InfraGard–The FBI and Business Teaming up to Guard Infrastructure
For the past few weeks, one evening a week, I have been attending the FBI Citizens’ Academy in Los Angeles learning about the inner workings of the FBI. Among the programs the FBI has set up is InfraGard in which the Bureau works with the business community and others to share information in hopes of thwarting attacks against physical and cyber infrastructure in the country.
InfraGard is a government/private/public sector alliance. The program is designed to allow businesses, academic institutions, local law enforcement and the Bureau to combine knowledge and share information and intelligence to prevent hostile acts against the United States. In other words, the FBI is asking members of the community to use their expertise and be the eyes and ears in protecting America.
There are four InfraGard chapters in California: San Francisco, Sacramento, Los Angeles and San Diego. Each center covers wide areas of the state. You can find info on the local chapters here.
California’s Tax Machine
The California Taxpayers’ Association has released a second edition of Dave Doerr’s California’s Tax Machine, an up-to-date history of how California taxes its citizens. Doerr, chief tax consultant at Cal-Tax since 1987, started working for the Assembly in 1959 holding many positions, including chief consultant to the Assembly Revenue and Taxation Committee. The new edition, a year in the making, includes new information on the Davis and Schwarzenegger administrations’ tax policies along with updates on some of the historical material included in the 2000 first edition.
Doerr hopes any new tax commission set up by the Legislature or the governor reads through the book before beginning work. “You can’t really begin to fix things unless you know how they went wrong and what the problems are and how they developed. Then they start to see how they can get out.”
Doerr’s 800-page volume begins with the Spanish Rule in California but quickly gets into the tax policies of today and how they developed over the years. If one tax issue has stood out over time for Doerr, it has been trouble with the property tax starting in early statehood and running right through the Proposition 13 tax revolt. Doerr noted that a referendum in 1859 to split California in two was driven in large part by the heavy property tax burden in the southern part of the state. The issue of two Californias was transferred to Congress but was lost among rising tensions of the coming Civil War.
A Third Political Party?
A majority of Californians feel that the current political parties fail to do a good job and these voters are open to the idea of a third political party. That was the result of one of the questions in the latest Public Policy Institute poll that received little attention.
By a 52% to 41% margin, Californians liked the idea of supporting a third party because the Democratic and Republican parties do not do an adequate job. As you would expect, it was the Independents who really grabbed onto the idea of a third party by 62% to 35%. But registered Democrats and Republicans apparently don’t think the third party suggestion is so crazy. Democrats said that current parties do an adequate job of representing the people by a only a narrow margin 48% to 44%, while Republicans actually were in favor of the third party idea 49% to 44%.
Poll results on the independent voters is significant because independents, or as they are known in California, Decline to State voters, are growing in number. In September, the Secretary of State revealed that Decline to State voters make up nearly 20% of California’s registered voters. That’s compared to 32.5% Republicans and 43.7% Democrats.
Blow Up the Boxes–For Real This Time
Only weeks after the state budget was signed the governor and legislative leaders are scheduled to meet today to determine whether to call a special legislative session to deal with – the budget, again! With the economy in a tail spin this budget is already out of balance by about $5-billion—if it ever were in balance in the first place when it was signed. Nobody believes it was. And huge future budget deficits are looming.
With a deficit hole and a deteriorating economy — and on top of all that a federal judge demanding money that the state doesn’t have be spent on prison medical facilities — what are the political leaders going to do?
Governor, I have a suggestion for you to help with California’s fiscal difficulties both now and in the long term. The idea is not original – in fact, I borrowed it from you. Blow Up the Boxes!
A Lesson both Modern and Ancient for the Tax Commission
Now that the legislative session is over and Speaker Karen Bass is contemplating her commission on taxation, I want to recommend a piece in the September 25th Sacramento Bee by Jason Clemens of the Pacific Research Institute.
Clemens, a Canadian, tells the tale of how Canada’s left leaning political party pursued a course of reducing spending and at the same time cutting taxes which produced more revenue and dramatically reduced Canada’s budget deficit. What makes this story intriguing is that Canada’s population size is roughly equivalent to California’s and the size of the budget deficit when the new economic policies were implemented was larger than California’s deficit.
This lesson of cutting taxes to bring in more revenue is nearly as old as history itself.
A Reluctant YES on the Rescue Bill
Too often the taxpayers are put on the hook in this country to clean up the mistakes of others. This time, the excesses of Wall Street have plunged finances into a hole and Congress is considering unprecedented and uncertain action to clean up the mess. As usual, that means the taxpayers likely will pay.
The question is if Congress does not pass a rescue plan for Wall Street, can the economy weather the hit without severe circumstances?
Some have argued that the situation we now face is the beginning of a self-correcting period. Holding tight without supporting a massive $700-billion rescue plan or bailout plan will cause pain but ultimately benefit the country. Others argue not addressing the problem on a grand scale will bring on recession and perhaps worse.
Reform…Reform…Reform
Following a frustrating and record setting period before an unsatisfactory budget was signed, the Sunday papers were full of reform ideas on how California should change its governmental process and even the structure of government itself.
Fox and Hounds Daily preceded the Sunday discussion with a piece on our site Friday
by Jim Mayer, Executive of Director of California Forward. Mayer offered readers a glimpse into the dialogue his organization hosted last week on the budget process and governance problems and setting an agenda for reform.
In the “Conversation” section, Daniel Weintraub oversees for the Sacramento Bee, Weintraub and guest writers discussed different options for reforming government in California. Weintraub also listed an array of government reforms that have gained support in some quarters during the time of the stalled budget negotiations including majority votes for the budget, open primaries, changed term limits, and an expanded legislature.