Cue up John Cougar Mellencamp’s rock anthem “Hurts So Good” to pipe through speakers at the State Capitol.
It’s time to tax the wealthy again and again. And it’s all in the name of a $31.9 billion deficit.
“Progressives” — apparently so named because their progressive spending such as $21 billion annually here for full healthcare coverage for all illegal immigrants and $10 billion there for the high-speed rail rabbit hole wiped out what was a $97.5 billion budget deficit 20 months ago — want to raise taxes.
To do otherwise would be a capital crime, at least in the Land of Legislators.
Spending within the means of California taxpayers has never been considered an admirable trait in Sacramento, which is why we have Proposition 13.
The theory, of course, is that the masses would have no problem sticking it to Mark Zuckerberg et al.
We are told that upping the tax ante wouldn’t prompt many to flee California and take their wealth with them, so it can no longer be a target for Tax-ramento politicians.
But if that’s the case, why does the latest tax the wealth scheme channel “Hotel California” by the Eagles?
There is a provision to tax the recently departed Californians — as in those that fled to keep the state from mining a higher percentage of their gold.
The Eagles nailed it, at least tax wise. You can check out of California but you can never leave.
And if it’s any comfort, those who can afford a second home in California by being part-time residents here with a primary residence elsewhere, are also on the radar of the latest Tax-ramento scheme.
But there is a reason why the masses aren’t biting and manning the ramparts, demanding more taxes on the wealthy.
That excludes the usual conspirators when it comes to tax increases such as public employee unions and specialty interest groups across the economic spectrum that fair well with the spending programs that are less about general services for the common good and more about welfare transfer schemes.
The reason? Even someone who is horrible at math knows that a $97.5 billion surplus 20 months ago and a $31.9 billion deficit today doesn’t add up.
This is not new for California. We go through more boom and bust cycles than wildcatters in the Texas panhandle. It is clear there is something basically wrong with our tax system in this state. And it’s clear that the people we send to Tax-ramento don’t have the moxie to fix it.
They will make feeble efforts to do so. They usually start with attacking Proposition 13 as the root of all tax problems. But given the state budget since 1978 has exceeded gains beyond inflation and population growth, Proposition 13 clearly isn’t the problem.
Tax-ramento has done two things since Proposition 13 passed. It has managed to expand the footprint of state government significantly. And it has done so with revenue derived from taxes on things besides just property.
Then there is the inconvenient truth. The surpluses are basically the result of capital gains taxes paid primarily by the wealthy during boom times.
Upping the tax rate on them during the bust times only means the tax take will be even higher in the next boom.
More spending increases, of course, will follow. Then a bust will come. And the pressure will be on once again to increase taxes even more on the wealthy.
With each passing cycle, more and more wealthy will come to the realization they aren’t the equivalent of hamsters trapped in a caged frantically going around in circles and will shuffle off to anywhere but Buffalo given that is in an equally high tax rate state.
We are told this doesn’t happen. Then why the push this time to keep taxing Californians after they cross the state line for good. Kind of ironic, isn’t?
California is a sanctuary state that imposes no penalty on those crossing the border illegally to seek a better life. At the same time, the state wants to impose a lifelong penalty on those legally here when it comes to freedom of movement by taxing them where ever they move to another state.
Let’s say you have no qualms with the state taxing beyond its borders or raising taxes on the upper echelon of the wealthy. If that’s the case, how do you feel about having a bounty placed on your head by simply being accused of not paying your legal share of taxes by someone other than the state?
You say that would never happen as only the state can only go after you if they are sure you stiffed them? Then you have never heard of the False Claims Act.
Back a few months ago when the deficit was projected to come in at $68 billion by the end of the fiscal year instead of the finely tuned $39.1 billion deficit figure where we are today, the Legislature rolled out some tax initiatives. One was centered around the False Claims Act.
They want to use the law to basically create bounties to entice a subgroup of lawyers affectionately called “ambulance chasers” to go after alleged tax dodgers.
What could possibly go wrong? Ask some of your non-wealthy neighbors who owned small businesses targeted by those lawyers using the weaponized Americans with Disabilities Act. They employed the same basic principle to line their pockets as lawyers “deputized” to enforce the law.
In a nutshell, California’s False Claims Act rewards plaintiff attorneys who go after those who allegedly submit a false claim for payment or fraudulently avoid an obligation to pay money owed to the state of California. In exchange for doing so, the lawyers can get between 15 and 30 percent of what the state is entitled to if they are successful.
And if the state doesn’t join forces with a plaintiff attorney, if the “ambulance chaser” prevails anyway on their own in court or in a settlement process, they are entitled to between 25 and 50 percent of the amount.
That makes low-hanging fruit — the little guys — easy prey.
Just like insurance companies, it may make financial sense to “settle” to avoid ongoing legal costs even if you don’t owe the taxes the plaintiff attorney claims you do.
The ultra-big money may be going after the big guys given if you shake the tree hard and long enough you’re likely to shake something loss. But the big guys have a lot of money and resources to fight back. Not so the little guy, such as the drive-by ADA lawsuit happy lawyers targeted.
The Beatles had it wrong. The British tax system they slammed in “The Tax Man” is embarrassingly amateurish compared to Tax-ramento.
This column is the opinion of Dennis Wyatt, and does not necessarily represent the opinions of The Courier or 209 Multimedia.