Sunday :: Feb 20, 2011

Why No Talk About California's Multi-Billion Dollar Tax Deficit?

by Steve

Back in August, when Governor Schwarzenegger and legislative Democrats were in the midst of another deceptive budget dance that ended up in another fraudulently "balanced" budget, I asked why state Democrats never go after the real "tax deficit" California faces. The tax deficit is compromised of prior-year individual and corporate taxes owed that haven't been paid, as well as the amount of corporate welfare handed out to California corporations in the form of tax breaks to allegedly create jobs that never materialize.

Governor Brown, to his credit, has tackled hard decisions with his first budget, and he is to be commended. Yet he also didn't tackle this issue. Why? Any why is this a big deal?

Because while the Governor is battling Republicans for doing nothing, and battling cities and redevelopment districts over his proposal to scrap redevelopment funding to save several billion dollars a year, neither he nor Senator Steinberg and Speaker Perez force a debate on $6.5 billion in uncollected taxes owed. That figure isn't some wild-assed guess from a liberal anti-corporation outfit. That figure is from the Franchise Tax Board. Why aren't Brown and the Democratic leadership forcing an honest debate about our current level of state taxation?

Brown has started taking a look at the corporate tax breaks that have been handed out to various industries over the years to allegedly create jobs, which represents unmonitored corporate welfare. Republicans continue to clamor for more and more business tax breaks to allegedly create jobs, but they fight when anyone suggests that corporations be held accountable like the GOP demands of individual recipients of government aid. Some have estimated that California's current level of unmonitored corporate welfare reaches $5 billion annually.

So if there's a potential multi-billion dollar annual tax deficit in this state, why aren't we talking about that as we talk about shredding the safety net?

Steve :: 10:42 AM :: Comments (2) :: TrackBack (0) :: Digg It!