Blogocentric Formulations

Are Taxes Such A Bad Thing?

I know that talk about raising taxes is borderline blasphemy these days, especially with the economy still in the dumps... but something needs to be done about California. I just read an article in the paper about the State Legislature shooting down Gov. Schwarzenegger's plan to install speed cameras at intersections across the state, in an effort to raise $400 million and combat the state's $20 billion deficit. While it's not the out-of-the-box thinking I have a problem with... did anyone think this through first? As the article mentioned, the cameras would remotely photograph people driving more than 15 MPH over the speed limit and send them a ticket in the mail.

When did raising fines become a viable form of fundraising or debt relief? While I certainly don't condone speeding, when you depend on speeding or any other criminal act as a viable source of income that needs to be adjusted, increased, or modified, it's going to create problems for the people affected. A $400 speeding ticket is serious money to most people... and more and more people, when they do get a ticket like that, are going to be faced with the very real decision of paying the bills or complying with the law. I know the argument is "don't speed", but this is a commentary on state revenue streams, not the morality of legality of speeding. That's another blog...

And I'm not even going to go into the fact that this legislation is largely sponsored by the lobbying of Redflex... one of the major suppliers of these cameras. Did you know that in a recent report to their investors, they explained that revenue might fall below expectations this year... because of "the costs of lobbying in various key legislative contexts?" Interesting.

Anyway, the whole point of this is... when did raising taxes become such a bad thing? Especially since it seems like almost everybody is in agreement that it's not really an issue of tax hikes for everybody... but increased taxes for the wealthiest among us, who can afford to pay a more proportional share of their income. It seems that we're so afraid to utter the words "tax increase" that people like our beleaguered governor will try just about anything to find a way to raise the money some other way.

When I was working one of my first jobs out of college, I worked for a company that needed to make cuts... business was down and expenses were still sky-high (the same as during their glory days). So they brought in a guy to help them figure out where they could cut costs and adopt a more appropriate business model. The guy reported back to them that, in all honesty, the problem was the salaries of the top executives and the various perks they enjoyed (expense accounts, car allowances, etc.). He recommended that if the company was going to make it, they had to either issue pay cuts to those executives, or get rid of some of them to equalize the cash flow. Those top executives said, "Sorry, can't make any cuts here. Figure out some other way." So what could the guy do? All that was left was trying to put a Band-Aid on a severed limb... he laid off entry-level assistants and support staff, cut out the snacks in the break room, and had people share offices so they could lease out some of the office space used by the administrative staff.

It's the same problem with California. We need a tax increase for those who have for too long enjoyed the loopholes and exceptions in the tax laws that allow them to pay proportionately less than everyone else. (For the record, my tax bracket takes about 30% of my salary out for taxes... I have a friend who makes TEN TIMES what I make - or made, rather, when I was fully employed - and only pays about 15% of his salary to taxes). The tax law needs to be remedied and, yes, taxes need to increase for some people. But people are so afraid of talking about tax increases... like the guy who tried to save the company by eliminating the three grand a year spent on morning bagels versus the three hundred grand a year paid to one of ten executives... we're just going to keep coming up with ridiculous ideas for how to put Band-Aids on our severed limbs.

So please, Gov. Schwarzenegger and the legislature. Stop bickering about how to raise $20 billion in fits and spurts, and start having a serious conversation about what needs to be done to rescue the state economy. It may be painful and it may not be what people want to hear... but then again it may be time to stop telling people what they want to hear, and start telling them about what needs to be done in order to have a realistic shot at significant and enduring recovery and growth.

*end rant*