Getting Burned by Dancing with the Devil

In a state Capitol hearing room, the taxpayer advocate waited patiently for the 37 special interest pleaders to finish speaking in favor of yet another tax increase — a last minute measure that had been jammed through in the final hours of session. He reflected on the similarity of each robotic presentation, how approval of the new tax would be tremendously beneficial and would put lawmakers on the side of the angels. When his turn finally came, he rose to the microphone and said:

“Members, it’s time now to hear from a voice that hasn’t been heard yet in this debate. It is a voice not heard often in the halls of this Legislature. It is the voice of the millions of California taxpayers who will be hit with $2 billion more in taxes if this bill passes.”

For Howard Jarvis Taxpayers Association’s former Legislative Advocate, David Wolfe, being the lone voice on behalf of citizen taxpayers was familiar territory. The bill in question was SB 1455, a seemingly sensible proposal to ease regulations on diesel truckers as well as establish hydrogen fuel stations to support cars that will — it is hoped — increase in popularity. But the proposal came with a heavy price: $2 billion in higher car taxes, including vehicle registration fees, smog abatement fees, and tire surcharges.

It was a classic example of how the Legislature works to build support for extracting more from taxpayers. By first placing overly restrictive regulations on industries like diesel truckers, they can then persuade those impacted to support new taxes by offering, in return, to reduce their regulatory burden.

Fortunately, common sense — which is California’s most endangered species — prevailed and SB 1455 went down to defeat in the closing hours of the legislative session, sparing already beleaguered taxpayers another blow.

However, taxpayers were not so fortunate when another bill, AB 1492, a one percent sales tax on consumers buying lumber products at retail stores like Home Depot and Lowe’s, was approved. This, too was a tradeoff, where loosening regulations on the timber industry was used to convince the industry to support the tax which would be borne by consumers.

Now, HJTA has nothing against the trucking or timber industries. The Washington D.C.-based Tax Foundation rates California 47th lowest out of 50 states in business climate. We’d like to see damaging and unnecessary regulations disappear just as much as anyone. So here’s a novel thought: If the regulations and restrictions were not appropriate in the first place, just repeal them. It is the Legislature that imposed them, and the Legislature can remove or modify them. Lawmakers have no business extorting more from taxpayers who want to build a home or deck, in return for their representatives doing the right thing. And even the benefits of these bills may be illusory. Once the new taxes are in place, all it takes is a majority vote to reimpose the onerous regulations.

The disturbing trend is that Republicans, who usually tout themselves as the champions of the taxpayer, are being swayed by the siren song from those who would trade regulatory reform for tax increases. This year, ten bad votes were cast by Republicans on the two bills discussed above. Another jumped ship to support a third tax increase — that ultimately failed — in the hope that he would receive in return changes to environmental regulations that were requested by developers in his district.

These bills are just two recent examples, out of many, of Sacramento insider deal making with narrow special interests that exclude consideration of the interests of taxpayers. Sadly, far too many lawmakers from both political parties have lost track of their fundamental obligation as elected officials to serve the broader public good. Until voters rise up and demand change in Sacramento, the special interests and pay-for-play politicians will continue to call the tune while taxpayers are expected to dance.

Jon Coupal is president of the Howard Jarvis Taxpayers Association — California’s largest grass-roots taxpayer organization dedicated to the protection of Proposition 13 and the advancement of taxpayers’ rights.