Tax reform needs sunshine

While most of the country, including California,
is immersed in the highly controversial health care debate, we here in California
are facing our own very significant debate on key reforms that will impact everyone in the State for years to come.

 In addition to talk about a Constitutional Convention to
attack our clearly antiquated and unworkable system of governance, including the 2/3 vote for a
budget and term-limits, we are facing an equally dramatic set of issues as a
result of a commission set up to revise the tax system in our state. Ostensibly
to assure fairness and reduce volatility so we can better get through the bad times, the Commission for the 21st
Century Economy (also known as COTCE) is at work to develop a set of
proposals that the Governor wants the Legislature to vote on at a Special Session he has called for September, shortly after it adjourns for the year.

Just a few problems with this, though. The Commission is
heavily weighted with the Governor’s business-friendly folks who are seemingly desperate
to help their wealthy cohorts avoid their fair share of taxes. Indeed, among
the proposals by the Parsky faction of the Commission (Parsky is the Chair appointed by Governor Schwarzenegger), is
a “flat tax” which is an estimated $7 Billion give-away to the wealthiest
Californians, with the burden of that giveaway falling on the middle-class and
the poorest among us. In addition, the Commission’s corporate friends want to do away with all
corporate taxes and instead impose a “Business Nets Receipts Tax” also known as
the BNRT, which is a complicated and dangerously untested hybrid of a European
approach to taxation.

 These proposals are the business community’s and
Schwarzenegger’s dream wish-list.  But
the progressives on the Commission, headed by former Assemblymember Fred
Keeley,  have stepped forward with a
proposal that makes a lot more sense and is considered by all but the most
extreme anti-tax, anti-government forces, to be a very moderate proposal,. To the consternation of many solid progressives,  it even contains a spending cap. The Republican members should be loving it and jumping at the chance to compromise in order to include this as part of  a “consensus” proposal, which is the mandate of the Commission.

 Among the elements of the Keeley report is proposal to revisit real estate taxes and examine the unequal commercial property  protections that have hurt local governments for the past thirty years, preventing them from having the resources to do their jobs. Keeley also recommends retaining  the
current progressive income tax system so that the wealthiest, who have the most
money, pay the most in taxes. While still allowing them to keep the majority of
their wealth, this provides, quite logically, that those who have the most
should pay the most.


The progressive’s plan also calls for a carbon/pollution
tax. With everyone from William Clay Ford, Jr, chairman and CEO of Ford Motor
Co. to columnists Thomas Friedman and Charles Krauthammer (among many others),
calling for increasing petroleum fuel taxes, or creating an oil price floor,
the time to put this on the table and make it part of a serious and honest discussion is now.


There are several more innovative concepts involved,
including a determination of how these ideas will impact local tax revenues and
thus services. It’s interesting stuff for policy and tax wonks, but the
implications for every Californian make the discussion an important one.  For more on this proposal and the work that
the COTCE is doing, check out their very extensive website at:


But for those with less than a dissertation’s amount of time
available, the issue right now is whether Parsky and his business corporate-focused agenda will allow a meaningful discussion of the alternative Keeley plan to see the light of day. Although Chairman Parsky publicly promised to do so at the July 16th
meeting, acknowledging his responsibility to try to build consensus,  he has yet to set forth the very important process by which his
proposal and the alternative proposals will be evaluated. To date, he’s ignored
requests by Stephen Levy of the Center for Continuing Study of the California
Economy out of Stanford University
to explain the process and methodology to be used to evaluate the disparate proposals. Parsky has also refused to address the demand for
transparency in this process or even acknowledge a memo from one of his
Republican Commissioners, Becky Morgan, who wrote the Commissioners on August 5th
urging the Commission to take the request for openness and transparency very

 While Parsky has been touting his heavily business-weighted reforms, he has refused to let anyone see how he has gotten to his conclusions that his idea is the better one or that the Keeley plan is a lesser one. We know that statistics can say anything you want them to if you control the process. And Parsky is doing just that. It’s a Star Chamber claiming to be sun-light.

For those  who have lost all trust in this governor’s ability to run this state, this further refusal by his appointed chair to consider other
points of view is just another in a long list of efforts to help the
multi-national corporations to the detriment of the hard-working people who live here. If the proposals the Governor’s representative has recommended are so wonderful, then let’s see the
real proof that the numbers and data haven’t been manipulated to look like
Bernie Madoff’s phony balance sheet. If the Keeley proposals aren’t valid, then let’s
see the factual basis for dismissing them.


Without this transparency and honesty in the process, the
COTCE will be yet another failed  opportunity to help fix the mess in California. A process weighted toward corporate greed is not what we deserve or need in California right now. This disappointment falls
directly at the Governor and his appointed Chair’s feet. No excuses, Mr.
Parsky. If you’re really committed to consensus, transparency and honesty in this critical debate, and in achieving real and constructive reform, it’s time to  “tear down that wall” of secrecy and let the sun shine in.   

1 thought on “Tax reform needs sunshine

  1. Doing away with corporate taxes, cutting taxes on the rich, raising taxes on the rest of us, and doing away with government services. Right-wing heaven.

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