Monday, December 17, 2012

'Oooh, The Taxes We'll Raise' - Democrats In California Salivate Over Their 2/3 Majority

Democrats have controlled California's legislature for some time, but the election last November saw Democrats in California's legislature get something they've been lusting after for decades - a two thirds, veto-proof supermajority in both the Assembly and the State Senate.

The Republicans, who have been able to block at least some of the more outlandish proposals might as well not even show up in Sacramento anymore.

The linked article farcically talks about California 'emerging from a prolonged recession'. The writer, Adam Nagourney obviously considers a U-1 10.1 unemployment rate (more like 14.7 in real U-6 unemployment terms), a $16 billion deficit, a large exodus of the state's companies, entrepreneurs and skilled professionals fleeing the high taxes in the country and massive over regulation to be signs of an emerging recovery.

And it's about to get far worse.

Aside from the new, higher sales and income taxes the voters approved after a massive campaign mostly funded by California's public employee unions, the next target is California's Proposition 13, a law passed back in the 1970's that requires a 2/3 majority to raise property taxes beyond a certain level:

Many Democrats said a top priority was figuring out a way to remove deep spending cuts made to education and other state services, which could mean finding new revenue.

“We do need to take stock,” said Ellen M. Corbett, the Senate Democratic leader. “We do need to take a look at things we have cut that may impact our ability to grow the economy.”

Senator Mark Leno, a Democrat, proposed putting on the ballot an initiative that would allow school districts and cities to pass a parcel tax increase with 55 percent of voters, down from the two-thirds requirement in Proposition 13. Lawmakers said they were also reviewing business tax exemptions they agreed to in order to win Republican votes.

Another Democrat, Assemblywoman Nancy Skinner, said, “What we want is to look carefully to see what kind of tax do we have like that, that are costing our schools, costing our taxpayers and not benefiting our economy.” {...}

Now that the Democrats have a supermajority, there has been a growing call for lawmakers to put an initiative before voters to revise Proposition 13, either by eliminating the two-thirds requirement or creating a split tax roll, which would protect residential property owners but remove protection from commercial and industrial properties.

Given the state's current demographics, getting 55% of the voters to approve massive taxation on those who own property would not be a very difficult bar to get over.

Proposition 13 came about because the Democrat-dominated legislature arbitrarily raised property taxes through the roof back in the 1970's, devastating the housing market as people decided not to buy and kicking existing homeowners, especially retirees, out of their homes because they could no longer afford the taxes. Most people are smart enough to realize that once the firewall of proposition 13 is breached, it's only going to be a matter of time until we return to those days, especially with a Democrat supermajority.

California's already devastated real estate market would collapse as people rush to sell their homes while they still might be able to find a buyer...not an easy thing as it is today with the Obama economy. Corporations will simply sell their commercial property and move out adding to the already prevalent 'for rent' signs.

The Golden State, happily killing the goose that lays the golden egg.

1 comment:

louielouie said...

the article said:

which would protect residential property owners but remove protection from commercial and industrial properties.

and i suppose the new motto will be something in the vein of, "california, the business friendly state."

enjoy the weather you and ms. J/P.