It may be time for California Republicans to revisit the “no new tax” pledge if the tax reform plan out of D.C. makes the grade. While it may numerically cut U.S. revenues by $1.7 trillion, it definitely passes the burden of the “cuts” on to hardworking people in California.
As a lifelong Republican and an elected official, I do believe that taxes are too high, people will spend their money more wisely than a government bureaucracy, and market principles of supply and demand really work when not crippled by government interventions distorting market forces.
Living in California, I have witnessed centralized top-down planning, heavily skewed incentives to reconfigure the economy, and how government redistribution of assets and wealth is disguised as creating fairness. Robbing Peter to pay Paul does not “grow” the economy nor, as we have witnessed in California, does dependency on government largess rescue the poor from poverty. But it does attract more to government programs, while providing barriers to self-sufficiency and upward mobility.
Unfortunately, the Republican plan in D.C. is mimicking the California model by penalizing professionals, businesses and homeownership for those of us in states with an already high cost of living. It encourages retooling of industries and skewing tax refunds toward less-populated, smaller states with a lower cost of living. The plan reduces tax rates by eliminating worthy incentives to homeownership, which is for most Americans their largest investment and pathway to financial security.
Reductions in corporate tax rates and repatriation of offshore dollars are worthy goals that will stimulate job growth, but our politicians in D.C. seem to be getting lost in ideological warfare to prove that they are not robbing the poor. Transferring benefits to beleaguered states attempting to rekindle manufacturing jobs and allowing “refunds” for taxes that many did not pay is not tax reform.
Elimination of the State and Local Tax deduction will harm the people of California who have worked hard to save and build equity in their homes and communities. Estimates are that property values will drop precipitously, affecting all as the market readjusts. While our state income tax is the highest in the nation, we do, thanks to Proposition 13, have the benefit of relatively low property taxes. If property values and assessments drop, communities will be impacted, prodding our Legislature to fill the gap by demanding…