We’re seeing more and more rhetoric, both in our state and nationally, about the worthiness of raising taxes, particularly on those that aren’t currently paying their “fair share.” Let’s take a look at this concept and see how it plays out in the real world.
In our wonderful Golden State, it’s playing out in the practical reality of literally dozens of proposals to raise taxes at the state and local level. Water taxes, soda taxes, higher property taxes – these are only a few of the proposals floating around out there. A well-circulated cartoon shows the California Legislature writing on a white board with a marker all the possible taxes that could be imposed. At the end of the long list are ‘white boards’ and ‘markers.’
Funny but sad.
Why? Because we know from experience that money is always taken from people (consumers). The politicians then spend it pretty wastefully, rarely delivering on their promises.
The reason is that our one-party state government isn’t ruled by the same desires to be efficient as you and I. If a bureaucracy saves money, it doesn’t go into the pocket (usually or legally) of the politician or government decision-maker – there is no reward for saving that dollar. Thus, little self-interest is involved. Equally, that same government decision-maker doesn’t benefit from productivity – in fact, the opposite is almost always true. These government systems often benefit from waste – look no further than the DMV for a great case in point. The more money they control, the more power they have.
If this didn’t have real-world impacts, we might not care. But it does, so we should care. These impacts are often the difference between success and failure, and even life and death.
How so? Look at education and health care.
Since 2010, education spending has gone up about 60 percent in California to about $100 billion. This was powered by the “tax the rich” Proposition 30. Did that money get to the classroom? Not really; it paid for pensions and healthcare previously neglected by the government decision-makers and politicians. Meanwhile, we are now seeing teacher strikes all over the state as exploding housing costs make teachers’ salaries less capable of meeting living expenses. At the same time, the state is working overtime to kill charter schools, which is a whole other issue affecting parental choices and quality.
The point is, taxing the rich hasn’t improved matters in education but it has centralized more power in the bureaucratic system and failed to materially improve results, which is the difference between success and failure. Doing more things like that doesn’t appear to be a good idea.
Same with healthcare. Medicaid and other health care costs now consume almost another $110 billion in California. Has care gotten better? Not hardly. It’s documented all over the place that doctors are rejecting Medicaid, moving out of state or just giving up on the profession. We are down to fewer insurers and fewer providers while evidence about fraud and abuse of the system is increasing.
Thus, centralizing power in government isn’t exactly increasing quality or access to health care, either.
What would? What has always increased quality and efficiency? Consumer choice and competition.
That answer doesn’t sit well with our politicians or our government, again because it doesn’t fit their model of more centralized control and power.
The Democrat presidential candidates, as well as our own state politicians, are all about raising tax rates and soaking the wealthy – but that doesn’t actually help the people that need help the most. It’s long past time to truly examine what will work better for our quality of life. Giving more money to an inefficient and unproductive bureaucracy is definitely NOT one of the ideas that will succeed.
John Cox is a Republican businessman who ran for governor in November.