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Opinion: Stopping the tax tantrum will take all the governor’s strength

Instead of spending his last months as a lame duck, Gov. Arnold Schwarzenegger is marshalling the full power of his office to make a last stand for budget and pension reform and against new and higher taxes.

Californians should be grateful.

Last year, taxes were raised by $18 billion, a move that undermined an already reeling state economy.

This year, with California’s unemployment rate stuck at a stratospheric 12.3% and our economic recovery continuing to trail badly behind the rest of the country, more tax hikes would surely prolong the misery.

But the idea that the state has the right to an ever larger share of the private sector’s dwindling resources is trumpeted at the very highest levels of the Legislature. The Governor is practically the last line of defense for California taxpayers.

Just this week, a former legislator – in a vicious op-ed — trashed Schwarzenegger for resisting increases in corporate taxes.  

That, despite the fact that California’s business tax climate is already ranked third worst in the nation by the Tax Foundation.  You would think the tax-and-spend crowd would declare victory and go home.

Silly you.

More than 2 million Californians are out of work and the signs are all around of the width and depth of the pain caused by a recession the Golden State can’t seem to shake. This in-your-face evidence of the impact of the triple whammy of high business taxes, high individual taxes and the endless threat that they will be pushed even higher does nothing to dull the roar of those calling for the taxpayer’s head.

The budget plan under consideration in the Legislature would increase personal income taxes, increase taxes on multi-state companies and small businesses, increase the tax on home insurance, create a new tax on soda, create a new tax on grocery bags, tax parking subsidies by employers, create a new tax on oil production and – to add insult to injury – create a new tax on parking tickets!

The impact of all this would be similar to the greeting a San Francisco Giants player once got in a game against the Mets in New York. Announcer Hank Greenwald said Will Clark was getting a mixed reception. Some of the fans were booing, and others were booing louder.

Should this latest budget proposal become law, there would be a mixed impact. Some Californians would take a hit in the wallet and others would flat out lose their jobs.

The proposal for a new severance tax on oil production alone would cost almost 10,000 jobs. Forget the devastation to families, lives and careers. Just pulling the rug out from underneath the many tax-paying workers and forcing them to seek assistance is the wrong equation for solving the state’s budget problems.

Gov. Schwarzenegger has proposed a tough budget that makes the hard decisions required to bring state spending in line with revenue. He has vowed to fight for what he wants even if it requires him to leave office without signing a budget.

The consequences of losing this budget battle would be horrible. Those pushing debilitating tax increases are loud, powerful and incessant.
As he makes his last stand for fiscal sanity, the value of having a governor strong in muscles and resolve should be apparent.


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