Tax facts -- California

Dan Walters, Sacramento Bee columnist, has a piece in today's Orange County Register that debunks arguments concerning California tax revenues made by both liberals on the left and conservatives on the right. Conservatives, including this one, argue that California's taxes are the highest anywhere. Liberals argue that California needs a tax increase both because there's a huge budget deficit and because California's taxes are only average among the states.

Walters explains that liberals have a point. Californians' overall tax burden is not the highest in the nation. Actually, California was only 6th in the nation in 2008, relative to personal income, before the recent tax increases.

But that's a little misleading. As Walters explains, Californians' overall tax burden is more volitile than most states' because of California's tax structure. In better economic times Californians' relative tax burden rises faster than other states. In poor economic times, it drops faster.

The data Walters uses comes from The Tax Foundation, which is critical of California's tax structure. The Foundation argues that California's sales tax would yield more income if the rate were lowered and the application broadened. It argues that California relies too much on revenue from high bracket individuals and businesses, whose income is more volitile than that of lower bracket taxpayers, causing the income yielded from those sources to be more volitile. Finally, the Foundation reports that expenditures from California's general fund increased by 31 percent from 2003 to 2007, a period when inflation increased 12 percent and the population grew just 5 percent.

Clearly, California's budget crises is self-imposed. Raising tax rates isn't the answer; changing the tax structure may be a partial answer. Most clearly of all, California's legislature must stop spending. Spending is out of control.

California's fiscal crisis

Everybody has a brilliant idea about how to solve California's budget crisis. Nearly every body's brilliant idea involves higher taxes. Californians are under-taxed, some argue. Proposition 13 is the real culprit, others argue. Nearly everybody ignores the geometric increases in expenditures and the unending increases in state government employees. The state has a budget deficit but is still hiring. Makes sense to some.

Cutting the state payroll is nearly impossible. Employees have unions. Unions have money to spend on elections. Candidates for legislative office need money for their campaigns. Unions provide it. Following their election, legislators are beholden to the unions who financed their campaigns. They will not buck the unions. Unions need more members. They press legislators for more hiring. Legislators comply. Taxpayers pay or the state has a deficit it must find a way to close. Brilliant idea: raise taxes.

Government ownership of GM increases

Today, the Wall Street Journal reports that the share of GM that the U.S. government will own under the latest proposal has increased from 70 percent to 72.5 percent. That's the wrong direction.

U. S. to become 70 percent owner of GM

The Wall Street Journal reports today that GM and the UAW have agreed to an arrangement under which the U. S. government would become a 70 percent owner of GM, with the union taking a 17.5 percent stake.

This is precisely the wrong outcome but it or something like it was inevitable once the government began advancing TARP funds to GM. According to the Journal, Treasury has no intention of "directly guiding" GM once it emerges from bankruptcy. Who then will guide GM?

The government has no business owning a private company and no expertise. Liquidation of GM would be a better outcome.

LAT honors Souter

LAT reporter David Savage, who covers the Supreme Court, reports today on Souter's speech yesterday before a gathering of roughly 300 lawyers and judges for the 3rd Circuit's annual conference.

Savage reports that "no one at the Supreme Court is said to work harder than Souter" and "he was known by his colleagues for carefully studying and weighing the record in each case. He has been less interested in applying broad principles to all cases than in finding the right result in each case."

If that smacks of editorializing it's because it is.

"Torture" memos

The LAT reports this morning on the "torture" memos and their authors, saying the authors, specifically John Yoo and Jay Bybee, possibly should be disbarred. The arguments used in the memos were so poorly reasoned, the LAT suggests, that the authors could not have made a serious effort to describe the applicable law and express well reasoned opinions. Instead, the LAT suggests, the authors seem to have cooked up opinions that would support the practices being followed by CIA, which amounted to torture.

Sadly, the LAT's report is based on interviews with anonymous sources who acknowledge that they weren't authorized to divulge the information to the LAT because it is classified. Accordingly, the LAT's report was based on information obtained from people who broke the law by supplying it.

The LAT report includes a paragraph claiming that "the U.S. government for decades had prosecuted and convicted people for using waterboarding" yet that fact "was given little mention" in the "torture" memos. The LAT cites no such case and fails to define "little mention" or to explain why that was insufficient.

Empathy

The LAT argues that "empathy" is key to Obama's Supreme Court pick to replace Justice Souter. Obama, the LAT says, is looking for someone who isn't so much concerned with justice as with empathy. Presumably, that means that Obama will pick someone based on how that person feels about the law and the constitution and about people who have violated one or the other.

Presumably, if an Obama nominee feels good about a precedent then he or she will follow the precedent. If not, the precedent will, presumably, be ignored.

Presumably, an Obama nominee's view of a founder's opinion will depend on how the nominee feels about the founder. A nominee, for example, might ignore whatever Jefferson may have said about an issue because Jefferson was a slave owner and may have raped Sally Hemmings multiple times. Likewise, an Obama nominee might ignore whatever Hamilton might have said or written because Hamilton was a right-winger. And old Ben Franklin was a known womanizer. An Obama nominee might properly ignore the writings of Ben Franklin.

Besides, all the founders were, presumably, straight, white men. They could not have known how women, blacks and other minorities might react to issues. Under the circumstances, an Obama nominee might legitimately ignore the opinions of all the founders.