Faced with an overdue state budget that is simply not going to be balanced by spending cuts alone, Gov. Arnold Schwarzenegger has commendably reversed his longtime pledge of “no new taxes.” Unfortunately, he did so by choosing the most regressive form of taxes: a one-cent sales tax hike that would hit the poor far harder than the rich.
Compare that to the budget plan worked out in the California Assembly (with the help of our own Assembly member Mark Leno), which Leno said would “restore $8 billion in the most draconian cuts that the governor proposed.” How? By increasing income taxes on the wealthiest Californians, a plan that would raise about $8.2 billion per year, roughly double what the governor’s sales tax proposal would bring in.
So the Democrats want to tax the rich (who would write the increase off of their federal income taxes anyway and end up paying about the same) and Schwarzenegger wants to tax the poor. But it all may be a moot point considering it takes a few GOP legislators to reach the two-third threshold for passing a budget and all the Republican legislators have signed on to an inane “no new taxes” pledge, apparently content to just starve state government.
Stay tuned…