COMMUNITY COMMENTARY:
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With the summer heating up, so are the discussions to resolve the enormous state deficit, which is $17.6 billion and growing. And, despite the call for a diet to government’s fiscal obesity, those in Sacramento are calling for $11.5 billion in new taxes.
Despite a softening economy, the state’s revenues are holding steady. This proves the point that Republicans have been making for a long time: The budget crisis is not the result of a revenue problem, but a spending problem. California lawmakers need to look at other pots of unused state funding. Specifically, we could redirect $2.4 billion of First 5 money to other children’s programs such as health care, use 63 (Mental Health Initiative) funding for mental health services, and sell many of the state’s surplus properties.
The weight of California’s tax burden is very clear when you compare the amount of taxes each Californian pays relative to residents of other states.
According to the most recent data available from the U.S. Census Bureau, Californians pay an average of $2,392 in state taxes, the highest per person of the eight largest states and ninth nationwide. Yet, our schools and roads rank almost last. Clearly how we spend our money needs to be reformed.
California’s employers are also feeling the pinch. This year, California’s business tax climate ranks 47th in the nation, based on 113 factors analyzed by the Tax Foundation. Increasing the high tax load businesses already bear will make employers less likely to move to, remain in, or expand operations in California. Not to mention that the cost for businesses to comply with California’s rules, regulations and bureaucracy is more than twice as high as other Western states.
Higher taxes don’t guarantee increased revenues over time because prohibitive tax rates tend to drive businesses away, limiting future revenues and taking jobs with them.
Business tax savings are one of the primary reasons for large scale job relocations from one U.S. state to another.
Driving away California’s tax base won’t solve our perpetual budget crisis; it will only weaken our economy.
Californians are paying more at the gas pump, at the grocery store and for other goods and services. At a time when government is growing and the private sector is shrinking, proposing $11.5 billion in new taxes is not the answer. Taxpayers need a break.
TOM HARMAN is the senate representative for the 35th Senate District.
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