Maviglio wrong on tax increase aftermath

Aug. 15, 2012

By John Seiler

I like Steve Maviglio, the longtime Democratic and union activist and spokesperson, because he summarizes what those he represents are thinking. So it’s worth reading what he says on the the legislative vote for AB 1500, a tax increase, a bill my colleague Katy Grimes wrote about yesterday.

It needed two non-Democratic votes to pass in the Assembly because it’s a tax increase. One came from Assemblyman Nathan Fletcher, I-San Diego, who bolted the Republican Party earlier this year; the other came from Assemblyman Brian Nestande, R-Palm Desert. After the vote, Nestande quit his post as chairman of the Republican Caucus.

Maviglio:

“And while Nestande hasn’t left the Caucus yet, some, such as San Diego Union Tribune capital reporter Mike Gardner, are speculating that he might join fellow San Diego Assemblyman Nathan Fletcher as the second member of the Republican Caucus driven from its ranks by Conway.”

In fact, as my colleague Steven Greenhut detailed, Fletcher left in a hissy fit because the party didn’t endorse his candidacy for mayor of San Diego, a race he lost on June 5.

As to Nestande, I could be wrong, but I doubt he’ll leave the party. His father, Bruce Nestande, was a longtime Republican assemblyman and Orange County supervisor.

“What was Nestande’s crime? Supporting legislation by Assembly Speaker John Perez to close a tax loophole for out-of-state corporations and use that revenue to fund scholarships for low- and middle-class kids who want to go to college.”

If we’re going to raise taxes, why isn’t the money being used to close the state’s $16 billion budget deficit? Why new spending?

University presidents

And as to high tuition, how about cutting the massive pay and perks enjoyed by university presidents, as we have detailed here on CalWatchDog.com? Do they really need salaries of $400,000-plus a year for these fat cat academic timeservers?

And by the way, how about pension reform for all state and local government workers to save money to cut tuition costs?

The 2009 tax cut wasn’t a “loophole,” but a tax break given to multistate corporations that do business here. Although these corporations are headquartered out of state, to pay the tax they have to do business here — so in that sense they’re also California companies.

Raising their taxes will just encourage these multistate companies to do business elsewhere. Moreover, this tax increase might not have been as onerous if the money raised had cut taxes elsewhere, such as on capital gains to prompt more investment in jobs and business creation. But no, the $1.2 billion estimated from the tax increase will be spent.

California companies

“Despite the fact that not a single California company will see its taxes raised nor that it won’t raise the tax of any individual in California, Conway apparently thought that helping the Speaker achieve a meaningful reform was bad for the Republicans.”

Again, although these multistate companies are not headquartered here, they’re still “California companies” because they do business here — unless they get so disgusted they leave. A really bad part of this tax increase is that it means companies will have to deal with three different tax regimes in six years (2008 to 2013). That causes uncertainty and increases costs for accountants and tax lawyers.

“Remember though that Nestande’s vote wasn’t anything radical. In fact, the California Business Roundtable issued a statement after the vote praising the San Diego Assemblyman for reaching across the aisle to support the Speaker’s bill.”

Well, in Democrat-dominated state, it’s not surprising that business groups sometimes sell out to their imperial masters.

“But Conway would have none of that. Her pledge to obstruction apparently even trumps the goals of the Republican business community — which used to be the backbone of the party. Now Conway kowtows to the Tea Party instead.”

I’m sure Steve has noticed how “the Republican business community” has been eager to throw the best interests of the state under the bus when convenient. Look at those great Republican business leaders Arnold Schwarzenegger and Meg Whitman. The Tea Party isn’t percolating all that much in California, but it gives the party its only remaining caffeination.

Obstruction

“But Conway would have none of that. Her pledge to obstruction apparently even trumps the goals of the Republican business community — which used to be the backbone of the party. Now Conway kowtows to the Tea Party instead.”

But with the passage of Proposition 25, which dropped to a majority from two-thirds the threshold for passing a budget, Republicans already are irrelevant except on one thing — raising taxes, which still requires a two-thirds vote to pass. So Democratic activist Maviglio is urging Republicans to cave on the one remaining principle they have to power to uphold.

Of course, in the end the demographics are leaning way against Republicans. Immigrants tend to vote 70 percent Democratic. And following the pattern of the past 20 years, Republicans continue to flee California’s toxic jobs and business climate for states with more freedom, such as Arizona.

Democrats now run everything. And they’re going to take the blame as, to paraphrase the late Californian Jim Morrison of the Doors, the whole outhouse goes up in flames.