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.


“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 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.


“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.



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  1. Rex the Wonder Dog!
    Rex the Wonder Dog! 15 August, 2012, 14:28

    They should raise taxes on the TV production companies still doing business here in So Cal. Lets see now….23 new shows, only 2 filming locally….on second thought that won’t work either, the final 2 series may leave for greener pastures too 😉

    Reply this comment
  2. Rex the Wonder Dog!
    Rex the Wonder Dog! 15 August, 2012, 14:29

    Steve comments here sometimes maybe today he will make his annual comment.

    Reply this comment
  3. Steven Maviglio
    Steven Maviglio 15 August, 2012, 15:08

    Thanks for the compliment (I think) but I fail to see where I’ve been misleading.

    These are corporations based out of state. Unlike California companies, they get to pick and choose the tax rate they pay. And to no one’s surprise, they pick the lowest rate. So they pay fewer taxes than a California company that might do the exact same thing. You can this fair?

    There isn’t “new spending” here — it’s funds that will go back in the state treasury many times over by providing scholarships for low- and middle-class kids. How is our going to state going to succeed if we have fewer kids going to college?

    Again, not a single California taxpayer will pay more taxes under this, nor will any California-based companies. And for those out of state companies — many of them argued for this very same tax treatment in their own states.

    Reply this comment
  4. Dyspeptic
    Dyspeptic 15 August, 2012, 15:19

    Fletcher and Nestande are good examples of a certain wing of the Tweedledumb party who’s political loyalty is purely self serving and opportunistic. Fletcher loses a party endorsement for mayor and then gets all whiney and petulant like a spoiled child. He knows his political career is over. Now he’s just angling for a cushy appointment to some California Commission For Useless Former Politicians, like the detestable Anthony Adams. Nestande should know better and has absolutely no excuse for licking John Perez boots. I hope they left an awful taste in his hypocritical backstabbing mouth. Knowing where Johnny’s boots are likely to have travelled, Nestande should get tested for STD’s ASAP.

    The Republican party is so marginalized in Commiefornia that any defections at all reduce it to political irrelevance. Sure would be nice if Republicans in this state would get a clue and find some way to increase their effectiveness if only to present a facade of political opposition.

    About Steve “The Mouth” Maviglio, the quip about you know he’s lying because his lips are moving seems most appropriate. Everything that comes out of that slugs pie hole is pure spin. He must need a lifetime supply of dramamine just to get out of bed.

    Reply this comment
  5. CalWatchdog
    CalWatchdog Author 15 August, 2012, 16:19

    Steve: I changed the headline from “misleads” to “wrong.”

    As to the tax, the state economy still will be hit because these companies will be doing less business here, and creating fewer jobs. The money has to come from somewhere. It’s not just grabbed from Indiana, Michigan, New York, etc. So the kids supposedly helped will graduate but be unable to find jobs here. Many will leave California for states with better tax climates, and therefore more jobs.

    — John Seiler

    Reply this comment
  6. Rex the Wonder Dog!
    Rex the Wonder Dog! 15 August, 2012, 16:34

    Steven Maviglio says:
    How is our going to state going to succeed if we have fewer kids going to college?

    The ONLY reason we need scholarships, and why kids cannot AFFORD college, is because the money that used to go to CC, CSU and UC is now going into the pockets of GED edcuated prison guards, who now make more than a medical doctor. 1980 CC, CSU and UC % of budget 12%, today7%, prison budget 1980 3%, today 11%. So there is the problem Steve, has nothing to do with scholarships or out of state businesses, and everything to do with comping GED gov dorks $200K per year.

    Nice try. looking forward to seeing your talking points again next year.

    Reply this comment
  7. Ulysses Uhaul
    Ulysses Uhaul 15 August, 2012, 18:24

    Posters: reality is before your eyes. Taxes must rise…you know it too. In the near future the legislature will have fewer and fewer Republicans, Rinos and hurt feeling tax vote betrayers…there will be Illinois- style Democrats… and spend!

    Services will improve, schools will flourish and the bullet train will be a boon to California.

    Reply this comment
  8. Rex the Wonder Dog!
    Rex the Wonder Dog! 15 August, 2012, 18:33

    Teddy, I was wondering when you were going to brinbg back Uhaul 🙂

    Reply this comment
  9. us citizen
    us citizen 15 August, 2012, 19:06

    Yeah, ANY company wants to be taxed more. That is why they are LEAVING.

    What is wrong with CA? Why dont you just tax Everybody in the world, and have it all sent here….oh wait….the state will STILL be in a mess because you CANT spend more than you bring in.

    And who are the dems going to blame this on? Bush?

    We are the laughing stock of the US.

    Reply this comment
  10. Donkey
    Donkey 15 August, 2012, 22:28

    [email protected]#6, don’t expect a RAGWUS feeder to understand the facts Rex!!! 🙂

    Reply this comment
  11. Dyspeptic
    Dyspeptic 15 August, 2012, 23:20

    Rex, nice smack down of the lowlife spin doctor Maviglio. About Uhaul, I think he resurfaces when Teddy is off his psych. meds 🙂

    Reply this comment
  12. Sean Morham
    Sean Morham 16 August, 2012, 09:58

    California will (if it hasn t already) have a significant brain drain in the future. The educated(funded by the scholarships?) will learn what a cesspool the state has become, ideal for for deadbeats, such as disabilty frauds, breeding whores, mooching civil servants. There will continue to be pockets of innovation, but it will steadily decline. Bozo the Brown will leave a legacy of a Complete Incompetent, Aho. Nice summary in the history books of his life. Well , he wanted the job and the state’s ignorant, dangerously misinformed(washed and unwashed) masses elected him.

    Reply this comment
  13. stevefromsacto
    stevefromsacto 16 August, 2012, 10:37

    Nice try, John, implying that only Democratic and union activists support Mr. Nestande’s courageous stand. Wrong as usual.

    Here’s what the California BUSINESS Roundtable said about Nestande: “On behalf of our members, we appreciate Assemblyman Nestande’s leadership and the bi-partisan support that opens the door for continued discussion with members from both parties to develop those critically needed reforms,” said Rob Lapsley, President of the California Business Roundtable. “THIS IS THE WAY THE LEGISLATIVE PROCESS IS SUPPOSED TO WORK. If the discussions are successful, we firmly believe there will be additional bi-partisan support from members who will join Assemblyman Nestande in voting for potential reform measures in this session.”

    And here’s an editorial from the Redding Record-Searchlight:

    Reply this comment
  14. CalWatchdog
    CalWatchdog Author 16 August, 2012, 16:33

    The California Business Roundtable is hardly a bastion of free enterprise supporters. Their support of Perez’s AB 1500 is nothing more than crony capitalism at its ugliest.

    This bill is a disaster and will result in less revenue to the state, as the businesses that are able to, pull out of the state and expand elsewhere. Others will just close down. The burden placed on business in CA is untenable.

    And the big lie that Perez keeps using is that the businesses he is targeting for the tax increase received a tax break in 2009 – they did not.

    I’ll be reporting on the latest AB 1500 hearing held today – even Dems are leery of it.


    Reply this comment
  15. Ulysses Uhaul
    Ulysses Uhaul 16 August, 2012, 20:45

    Who can you trust?


    Reply this comment

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