Posted on 03/13/2008 11:22:50 AM PDT by NormsRevenge
Assembly Democrats moved quickly to force a vote on a bill that would have levied new taxes on oil companies to raise money for education; however, as expected, the bill was killed on the Assembly floor without any Republican support.
The bill, AB3X9 by Assembly Speaker Fabian Núñez, was dismissed as a political stunt by Republicans, who say Democrats are more interested in embarrassing Assembly Republicans than actually solving the state’s budget problems. “It’s bad political theater masquerading as responsible tax policy,” said Assemblyman Chuck DeVore, RIrvine, the ranking Republican on the Assembly Revenue and Taxation Committee. “It’s actually bad fiscal and energy policy.”
“This is about responsibility. This is about protecting education over and above these oil companies that, by my standards, have been doing quite well,” Núñez said during a news conference at a Sacramento elementary school.
Núñez championed his proposal in a Sacramento Bee op-ed Wednesday, where he blasted Republicans who have pledged not to raise taxes this year.
“Maybe we should take every ‘no tax’ pledge signed by Republican elected officials and staple them to the layoff notices,” wrote Núñez. “It is incredible that a party that once promoted itself as a champion of personal responsibility has been reduced to looking the other way when yacht owners hide their boats out of state to dodge taxes or when oil companies stiff the people of California with one hand and gouge us with the other.
“The time for knee-jerk, no-tax rhetoric is over.”
Though the bill was defeated Wednesday, Núñez had made his point. Passing the bill was never really what this was about. It was about drawing battle lines in the budget fight this summer. Democrats chose this week to hold the vote because it is the week that many schoolteachers are receiving layoff notices from their districts in the wake of threatened budget cuts from the governor to public education.
Democrats have called for increased revenues through fees and taxes to help mitigate the need for cuts.
The bill would have created a new 2 percent oil tax for any oil company that earns more than $10 million in net income. It would also impose a new 6 percent “oil severance tax” based on the gross value of each barrel of oil produced in the state.
The bill would generate about $1.2 billion, according to the speaker’s office.
DeVore said the proposal would “devastate oil production in California if it’s passed,” and would lead to an increase in California’s gas prices, despite language in the bill that specifically prohibits oil companies from passing the cost of the new tax on to consumers.
The bill language was introduced Monday and was fast-tracked to the floor by the speaker’s office. It was rushed to a hearing in Assembly Revenue and Taxation on Wednesday, and moved to the floor later in the afternoon.
According to the bill language, all of the money raised by the bill “shall be deposited in the General Fund and allocated exclusively for the purpose of funding grades K through 14 education.”
The governor’s press office said the governor has not seen the details of the proposal but did not support the concept. “The governor doesn’t believe we can resolve our chronic budget problems by raising taxes, which is why we need budget reform,” said Schwarzenegger spokesman Aaron McLear.
“This really is a drill,” said DeVore. “I wouldn’t want to insult the Democrats’ intelligence that they actually believe in the policies they’ve advocated. Clearly, these policies would devastate California’s domestic oil production.”
schu
The state is on the verge of fiscal collapse, and yet they are still fighting about what needs to be done. Maybe they should conduct a poll to determine how many legislators are over-extended on their credit cards. They seem to have the contagion.
One underlying blind spot that I’ve seen with all leftists -
they don’t think populations react to incentives. This is why they don’t believe in free markets, nor do they believe that lower tax rates will result in higher revenues and vice versa.
Some DO see that lower rates result in higher revenues, but it isn’t about revenue for them, it’s about vindictiveness (get the rich), and power (control others’ wealth).
New taxes aren't always the answer. Perhaps Nunez would consider better management of current monies?
Maybe we should take every moving company receipt from the avalanche of high-income people leaving California due to excessive taxation and staple them to Núñez's forehead. ;)
they don’t think populations react to incentives.
Except direct cash payments to indigent Democrat voters - they are 100% certain those work. ;)
they don’t think populations react to incentives.
Except direct cash payments to indigent Democrat voters - they are 100% certain those work. ;)
“...language in the bill that specifically prohibits oil companies from passing the cost of the new tax on to consumers. “
LOLOLOLOL!!! Too bad I live in California. If this passes, it will be $6.00 gas!! Demonrats are just too filled with “revenge against the rich” that they can’t think at all.
“Democrats chose this week to hold the vote because it is the week that many schoolteachers are receiving layoff notices......”
Every time a democrat get’s a pink slip, another angel get’s it’s wings.
Californians go to school until the fourteenth grade?
Maybe they mean CA community college?
I believe the CA community college system is the one of the most heavily subsidized in the nation.
Can someone explain the “hiding boats in other states to avoid taxes” loophole?
I think I may agree with the Democrats with this one; I don’t get it.
The Dems are trying to bait the Republicans into abandoning their no tax pledge with this piece of PR, which the press uses to makes Republicans seem like they only care about rich people. Once you cave on $23M it's tough to stand on principle on bigger tax increases.
One of the laws of economics is the Law of Unintended Consequences. When the first George Bush (or was it Clinton) introduced the “luxury tax” on yatchs, the industry went into a tailspin, taking a lot of middle class boat workers with it. The rich stopped buying waiting for the tax to be repealed, which it was.
The same thing will happen if this passes.
Thanks—I did know about the luxury tax and the fact that it ended up hurting middle and lower class people too, and I’m against higher taxes on anyone, including rich people. . .
But I didn’t get this boat tax thing—I thought the deal was you could buy a boat in CA, move it out of state for a while, and move it back in and avoid taxes. It seemed like an unfair loophole.
But buying it out of state—that’s a whole different matter—I see no reason to pay CA sales tax for a boat bought elsewhere!
I used to live in WA state, and my husband and I would travel down to OR to buy big ticket items like our engagement ring, appliances, etc because there was no sales tax in OR (at least not in the early 90s).
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