I have recounted how ideas coming from California’s progressive politicians are not just destructive, but also how most result in outcomes diametrically opposite of what the left actually thinks they will have. Examples of this phenomenon are legion.
Take high speed rail (please). It was sold as a “climate change” project because, in theory, it would reduce greenhouse gas emissions by getting cars off the road.
But it turns out that the construction of the project — a massive endeavor requiring thousands of trucks, destruction of farmland and millions of tons of concrete — has been spewing massive amounts of CO2 into the air.
Even the independent Legislative Analyst has concluded that the project will be a net GHG producer for the foreseeable future. If, as predicted, the project is never completed, think of the environmental harm that will have been inflicted — all in the name of saving the planet.
Another example of counterproductive policies is the “recording tax” enacted a couple of years ago. In 2017, the Legislature passed a new $75 tax on real estate documents filed with each county’s clerk recorder. The revenue generated by the tax — over $250 million annually — is supposed to be dedicated to low-income housing programs. But the biggest irony of the tax is that it ignores basic economics. A tax imposed on real estate transactions to pay for programs to make housing more affordable is like prescribing leeches as a treatment for anemia.
Vacancy Tax
The latest example of a progressive policy that will do more harm than good involves the levying of “vacancy taxes.” The idea here is to somehow punish … er … “incentivize” property owners who, for whatever reason, are unable to rent their properties. The economic theory is that a tax will spur the owners into lowering rents so their properties do not remain vacant.
Not surprisingly, San Francisco jumped on the vacancy tax bandwagon early on. You see, the city has a huge problem with ground-level retail shops being vacant. We’re not sure, but we strongly suspect that the human feces and hypodermic needles which litter the sidewalk might have something to do with the fact that retail shopping in the city has become somewhat less than pleasant.
Another bastion of economic foolishness, the city of Oakland, has already passed a $6,000 annual tax per “unused” parcel, whether residential, commercial or even empty lots. Because securing a development permit in Oakland is next to impossible, an owner is now damned if they do, damned if they don’t.
In all fairness to California, it’s not just our state that has embraced “vacancy taxes.” Bill de Blasio, mayor of the ever-declining city of New York, has said, “Let’s pass a smart, targeted tax to stop landlords from leaving their properties empty.”
Let’s be blunt. Vacancy taxes are, more often than not, counterproductive to economic growth. Do progressives who push this idea think that property owners really want their properties to be vacant? Do they even understand that investors generally hate “non-performing assets?” Apparently not.
A recent article quotes Joan Youngman, a senior fellow with the Lincoln Institute of Land Policy who states, “In a hot market, the landlord might wait for a high-end renter. If the market is soft, the vacant land might force the landowner to allow it to fall into disrepair.” That is right. But there is also a broader economic force at play here.
Are investors more apt to invest in jurisdictions that impose vacancy taxes or those that do not? Real estate investment is risky enough, and investors will certainly take into account potential tax liability in their decisions of where to put their money.
A New Water Tax? California Has a $21 Billion Surplus, Use That Instead!
By Jon Coupal and Phillip Chen
California has a record $21.5 billion surplus. That’s the good news. The bad news is that we have all that money because you are being overtaxed.
In May, Gov. Gavin Newsom released his revised budget proposal, the largest in California history. At a staggering $214 billion dollars, the budget is larger than that of most nations and every other state.
The budget also includes a new $140 million tax on water customers to help all Californians have access to clean water. Clean water is important, and there are a million people in the Central Valley without access to it. But do we need a new tax to pay for it? Maybe we don’t.
Just recently, a state Senate budget subcommittee eliminated Gov. Newsom’s recommendation for a water tax and replaced it with a $150 million continuous appropriation from the General Fund. This ensures reliable funding for years to come without increasing taxes. Obviously, we will be watching carefully to ensure that these dollars are in the state budget expected to be signed into law next month.
A General Fund solution makes sense, especially considering that the state surplus is 1,529 times what is needed to cover the costs to ensure everyone has access to clean water. But even if this proposal doesn’t make the final budget, there are other alternative sources of revenue.
Over the last four years, voters have approved two separate statewide water bonds, each of which designate hundreds of millions of dollars specifically for clean water projects.
Why can’t the governor direct some of that money to clean water?
Why wasn’t that done already by previous administrations?
Why is it that, whenever the state misallocates our tax money, the taxpayers get hit again?
The tax could cost some Californians an additional $10 a month, at a time when families statewide are struggling to pay record-high gas prices and other costs for goods just to survive.
Californians are drowning in taxes and high costs.
It’s no wonder many are looking at moving to more affordable states such as Texas and Arizona.
A Quinnipiac University Poll from February 16 found 43 percent of California’s voters felt they couldn’t afford to live in the Golden State. Among voters 18 to 34 years old, 61 percent said they couldn’t afford to live here.
The great California exodus to other states is already underway and many experts are predicting the Golden State will lose one congressional seat after the 2020 U.S. Census.
This means lower representation for our state in Congress and fewer federal dollars to help pay for infrastructure projects, education and public safety.
Additionally, if we lose younger generations to other states due to high costs, there will be a “brain drain” that will impact every sector of industry in California.
We can, however, start changing course today by saying “no” to new taxes like the water tax, and instead work together to make the Golden State more affordable for all Californians.
If you are fed up with high taxes, we implore you to take a stand and contact your state legislators and Gov. Newsom to let them know that enough is enough.
Say “No” to the new water tax and say “Yes” to using the General Fund to ensure that all Californians have access to clean water.
Jon Coupal is President of the Howard Jarvis Taxpayers Association – California’s largest grass-roots taxpayer organization dedicated to the protection of Proposition 13 and the advancement of taxpayers’ rights. For more information, visit www.hjta.org. Phillip Chen, R-Brea, represents the 55th District in the California State Assembly.