BUDGETS:

FAIR taxes for a change

Whether we're sitting at the kitchen table balancing our family budget, or in the legislature balancing the state budget, we cannot do it without INCOME. In California, we've been told too often that we cannot tax the rich mega-corporations and billionaires because they'll leave the state and take the jobs with them. Well, they've already taken our jobs overseas, and many of their headquarters to the Cayman Islands, and even their official residences to states without income tax like Florida. The Wall Street bailout and the bankers' bonuses opened our eyes.

More details will be forthcoming as the campaign progresses. For now, here's a quick list of two taxes that are needed to make things more FAIR.

(1) Oil severance tax. California is the only oil-producing state that does not levy a tax on oil taken from California. Alaska and Texas have this tax, why not California?

(2) Sales tax on Wall Street transactions. Also called a Tobin Tax, it's a financial transaction tax that focuses especially on speculative trading. We pay a high sales tax all the time on things we buy, why not pay at least a small sales tax when we buy Wall Street derivatives?

These taxes make sense, but let's step back a moment, and see why we need to address our old friend, Prop 13, in order to implement FAIR taxes for a change.

Old Prop 13: Keep the good. Fix the bad.

There is a wonderful part of Prop 13 that deserves to be kept. Voters approved Proposition 13 in 1978 to allow residents, especially seniors on fixed incomes, to stay in their homes rather than lose them due to rising property taxes. Let's keep that good part!

Behind the scenes, however, that old Prop 13 rigged the game to set up tax giveaways for mega-corporations and billionaires. Here are 13 ways Prop 13 has been unlucky for California:

1. Corporations benefit. Two-thirds (2/3) of the total benefit of flattening property tax went to commercial/corporate properties.
2. New homeowners get hurt. They pay more than long term neighbors.
3. Disparity grows. Prop 13 requires a 2/3 vote to raise taxes, but maintains a simple majority to lower taxes. So the legislature lowered tax rates in boom years, benefiting primarily the richest of the rich individuals and corporations – and now we’re stuck since 67% is needed to get fair taxes back.
4. Minority rule. Just 34 of 100 legislators can stall any budget until their districts get greater benefits – and lower taxes.
5. Safeguard for the super-rich. Not the rest of us.
6. Income tax swings. State budgets depend more on income tax, which is less stable.
7. Sales tax grows. Now almost 10%, it hits middle class, lower income, and even the affluent harder than the richest of the rich.
8. Housing market tightens. Long-timers stay put, and localities, in their rush to increase sales tax and decrease expenses, focus on retail malls and big box stores, not housing.
9. Goodbye services. City budgets are squeezed, and all residents feel the effects, on fire and police departments, libraries, parks, schools.
10. Parking fees and potholes. Both increase – as cities scramble for sources of revenue.
11. Opportunity shrinks. California’s schools went from being best in the nation to 47^th out of 50 in terms of per-pupil spending – and in educational opportunities offered.
12. Tuition hikes. Tuition fees have gone beyond the reach of many would-be college students – 32% hike this past year alone.
13. Kids and grandkids pay. The “no new taxes” mantra led to bonds funding everything from water quality and transportation to hospitals and schools – inadvertently promoting the philosophy, “We want it, but we don’t want to pay for it, so let’s put it on credit, and have our children and grandchildren pay!”

When we stop playing the game where most of us lose, and start paying FAIR taxes for a change, we can face our problems, and solve them.