Skip to main content

More Tax Hikes in 2017 or 2018?

Support Provided By
California Democrats and Republicans in the Balance
California Democrats and Republicans in the Balance

By John Seiler

This article originally appeared on Fox & Hounds Daily

For taxpayers, the most important issue for California this year isn’t the presidential election, which again will be won in this state by the Democrat, this time Hillary Clinton, by more than 3 million votes. Nor is it the U.S. Senate race, which Attorney General Kamala Harris is expected to win handily. Nor even the Proposition 55 tax increase on the ballot on Nov. 8, which would “extend” (or really create anew) the Proposition 30 tax increase, and also likely will pass.

The most important is whether Republicans can maintain at least one-third of the votes in at least one house of the Legislature to preclude Democrats from dishing out even more tax increases, which can be imposed by 2/3 majorities of each house. That’s also the supermajority needed to override a potential veto by Gov. Jerry Brown.

According to my Republican sources in the Legislature, there’s a good chance Democrats will grab 2/3rds in the Assembly, but less of a chance in the state Senate.

And even if they do get 2/3rds in each house, there’s the problem, as we saw four years ago, of some state legislators getting promoted to the U.S. Congress, leaving vacancies that drop the number of Democrats below the 2/3 threshold. Some might also get jobs in a Clinton Administration.

Donald Trump’s candidacy complicates matters. Given how he brought out 39 percent more Republican primary voters nationally than in 2008, will he do so again in the general election, helping all GOP candidates? Or will his stances on immigration and other issues bring out more Democrats this time, helping them in the Legislature?

Then there’s the U.S. Senate race, which features two Democrats, Harris and Rep. Loretta Sanchez. A recent PPIC poll found 28 percent of those asked won’t even pull levers on that one. The recent Top Two system precluded Republican, Constitution, Green and Peace and Freedom Party candidates from going before voters as alternatives.

Most of those disgusted voters will be Republicans. But it’s unknown if they’ll just skip that ballot “choice,” or stay home altogether. I suspect all the other issues – Trump vs. Hillary and the 17 initiatives – will keep enough GOP voters showing up at the polls, even if they boycott the Senate race.

This is really important in 2016 because, although you never know exactly, there’s a good chance of a recession hitting the next two years. They strike on average every six-seven years; the last one began in 2007, nine years ago. Which means the $6.7 billion in the rainy-day fund would be depleted rapidly and we’d be back with the horrors of $20 billion-plus deficits.

As famed investor Jim Rogers warned on August 4, “We have a strange economy. Markets look like they’re fine. But underneath the surface, most stocks are not doing well. Most stocks around the world are down. Most stocks in the United States are down…. We had a problem in 2008 because of too much debt, domestically and worldwide. Now the debt levels are staggering compared to 2008. Some countries have up to five times as much debt as they had eight years ago.”

That was seconded by Marc Faber who warned, according to CNBC, “U.S. stocks could fall some 50 percent from current levels.”

Because of Prop. 30 and its tax on wealthy incomes, California’s volatile tax receipts depend more than ever on rich people’s incomes and stock performance. So if the economy tanks, California’s deficits could be even higher than during the Great Recession, which hit before Prop. 30 was passed in 2012.

We also inevitably would see new attacks on Proposition 13’s protection of property owners. At first, it would be the usual attempt at a Split Roll, trying to peel off more revenue from businesses; which actually would hurt small businesses that rent from big businesses. But when that didn’t bring enough revenue, attacks also would begin on domestic property owners.

Things would be even worse if President Hillary Clinton is successful in enacting her promise, made this month to the Detroit Economic Club, to “restore fairness to our economy and ensure that those at the top pay their fair share of taxes.”

The Great Recession soon could be remembered as a picnic with Chablis and brie.

John Seiler is a former Editorial Writer at the Orange County Register. 

PLEASE NOTE: The information, statements and opinions expressed here are solely those of the respective authors and do not reflect the views of KCETLink. KCETLink makes no representations or warranties of any kind, express or implied, about the completeness, accuracy or reliability with respect thereto for any purpose.  Any reliance you place thereon is therefore strictly at your own risk.

Support Provided By
Read More
A row of cows stands in individual cages along a line of light-colored enclosures, placed along a dirt path under a blue sky dotted with white puffy clouds.

A Battle Is Underway Over California’s Lucrative Dairy Biogas Market

California is considering changes to a program that has incentivized dairy biogas, to transform methane emissions into a source of natural gas. Neighbors are pushing for an end to the subsidies because of its impact on air quality and possible water pollution.
A Black woman with long, black brains wears a black Chicago Bulls windbreaker jacket with red and white stripes as she stands at the top of a short staircase in a housing complex and rests her left hand on the metal railing. She smiles slightly while looking directly at the camera.

Los Angeles County Is Testing AI's Ability To Prevent Homelessness

In order to prevent people from becoming homeless before it happens, Los Angeles County officials are using artificial intelligence (AI) technology to predict who in the county is most likely to lose their housing. They would then step in to help those people with their rent, utility bills, car payments and more so they don't become unhoused.
blue themed graphic including electric vehicles are charging stations, wind turbines and trees, 2023 in reference to year

A Look Back at Climate Solutions In 2023

The U.S. may have a long way to go in its decarbonization goals, but these stories show signs of progress in climate solutions.