Con artists deceive their victims by manipulating emotions and exploiting vulnerabilities. Some con artists are so skilled, their victims are unaware they’ve been scammed. Once a con artist gains your trust, it’s highly probable you’ll be the victim of a scam.
The same is true of some politicians.
Californians pay close to the highest amount of taxes in the nation and continue to demand better roads in return. Despite being overtaxed, we continue to drive on the worst roads in the nation. Politicians tell us they can improve our transportation infrastructure if we simply pay an additional $52 billion in taxes and fees.
Another egregious example is the state’s so-called Fire Prevention Fee—an illegal tax passed by the Legislature in 2011. The name indicates that taxpayers are getting fire prevention services in order to generate widespread support. However, in reality the tax only backfills a budget cut; no new fire prevention services have materialized. Sadly, these types of political scams have become common.
Consider the elimination of California’s Enterprise Zone Program in 2013. Although not without complications, the 42 enterprise zones provided economic incentives aimed at spurring job creation and business investment in economically distressed areas of the state.
At the time, I argued it didn’t make sense to eliminate these vital economic development zones. It made more sense to make the entire state an enterprise zone by promoting policies that would spur job creation and innovation. But like most good ideas in California politics, it was ignored. The Governor replaced the enterprise zones with his “Economic Development Initiative,” consisting of:
(1) Manufacturing sales tax exemptions
(2) New hiring credits
(3) The “CalCompetes” income tax credit
Governor Brown’s plan was touted as “revenue-neutral,” meaning higher taxes paid by businesses in the former enterprise zones would be offset by the new tax incentives. The California business community as a whole would pay no more taxes than before.
Sounds fair, right?
Yet as state revenues grew, something almost predictable happened. The revenue loss from the three new programs fell far short of the revenue gained by eliminating the Enterprise Zone Program. The net result is that Californians are paying more taxes than before; the estimated additional burden to taxpayers is $1.2 billion and growing.
That’s a massive tax increase–one that Californians never had a chance to vote on, despite Governor Brown’s promise to put tax hikes on the ballot.
Although state revenues have grown nearly 50 percent since 2008, there never seems to be enough money for the priorities of liberal politicians. Time and time again taxpayers who don’t receive value for their current tax dollars are asked to pay more.
Tax-and-spend politicians often make big promises to move their political agendas, then fail to act in the people’s best interests. Like con artists, they never seem to tire of finding new ways to extract money from their victims. But if their victims realize they’ve been had, perhaps they’ll be less likely to fall for the next scam.
George Runner is Vice Chair of the California State Board of Equalization