CA: Schwarzenegger announces commission to overhaul tax structure

Gov. Arnold Schwarzenegger established a new state commission Thursday to overhaul the state's tax structure after facing significant volatility tied to stock market losses that already have hamstrung this year's budget.

The Republican governor, joined in Los Angeles by Democratic Assembly Speaker Karen Bass, blamed the state's latest budget problem on a tax system that relies on the top 1 percent of earners to pay a significant share of revenues. He said changes are necessary to even out the state's revenues over time to stabilize funding for state programs.

Schwarzenegger did not specify exactly what types of different taxes he would seek, though Democrats in the past have suggested expanding taxes beyond retail and assessing services, such as lawn mowing or auto repair.

The governor signed a $103.4 billion general fund budget in September, but experts now believe the state could be $10 billion short of what was in that spending plan. The governor essentially confirmed that estimate Thursday, saying state "revenues have taken a major dive of 10 percent."

"We are paying for the price right now of this outdated revenue system," Schwarzenegger said. "Just as we have signed the budget a month and a half ago, we are now already having a major problem. The stock market has come down 20 percent since then. And, of course, our revenues have taken a major dive of 10 percent."

The new panel, formally titled the Commission on the 21st Century Economy, will have 12 members, with six appointed by the governor, three by Senate President Pro Tem Don Perata and three by Bass. Schwarzenegger expects them to begin meeting in November and report their findings by April 15.

Commissions are the tool of political pussies.

Schwarzenegger is a political jelly-fish. He has no spine.

The federal mandate is to man the defense of the nation and facilitate trade. That’s it.

The federal government should at once find a way to ween social security away from government control. It should at once find a way to ween Medicare services away from government control. Both should be swapped out to personal income savings pools. People by the time they are thirty should have enough savings to be able to self-insure for most medical emergencies. They could have a medical policy with a $15 to $25k deductible to protect themselves, and take care of that much themselves.

If folks started saving when they were in their mid-twenties, they could easily have $15 to $25k in savings by age 30. The pool would include retirement and medical, but it would be there if needed.

By the time this person was 35 to 40, they would have enough money to pool with a spouse to place a large down-payment on a home.

By fifty they would have enough funds to be thinking early retirement, with a decent income. Working to 60-65 would be a choice.

My thoughts here would have to be tweaked, but we can do much better than what the government sets up for us. Get it out of the equation. Quit letting it manipulate the public with these services, and quit letting it steal the funds to do whatever it likes. Enough already.

Shrink the federal government by 75%.

In our states, I agree with your take on education. Pull the umbilical cord on Washington, D.C. within six months. Reorganize the schools to be community based. Trim the overhead down to size. Gut middle-management. Gut the political socialization aspects of education.

Create a parent reading room in these schools. Provide copies of every book there children are going to be exposed to during the year. Let the parents drop by the school regularly, and check these books out for themselves. Hold meetings to review education materials. Hold meetings to discuss what is going to be taught in the classroom, and listen to the parents. Knock off the attitude that educators know more than parents. While that will be true in some instances and on some points, PARENTS RULE (end of subject). Of course I am talking about reasoned parents who truly do have their children’s best interests at heart.

All the environmentalist oriented whack-job funding... it’s over. All the various commissions that do nothing but cause trouble, they’re over.

The state legislature should be convened about 45 to 60 days per years. Anything more would be subject to special sessions. Salaries would forthwith eliminated. If you couldn’t afford to sit in the Legislature don’t run. Keep one foot in the real world, the other in the Legislature.

I would venture to say that 50% of California’s budget could be lopped off. I may be wrong, but I’ll tell you, I’d be carving with an ax, not a pocket knife if I had the opportunity.

CO, why don't you explain what you think would fix this situation. We already have an earned income tax credit. We also have a sliding tax scale, so that the bottom earners pay a lot less or no income tax. Don't these compensations offset the Social Security, Medicare, and SDI payments? Let's say you don't think they do. Would you favor forgiving these taxes? Up to what earned income level would you forgive them?

First of all, I’m not proposing anything specific; I'm addressing the ubiquitous Republican claim that the poor don’t pay taxes as dishonest; it is obvious that they do. It doesn’t make a good basis for discussion or teaching when we are trying to solicit support from low-income voters as the party of opportunity.

So, as to my personal policy preferences (so that you can grok on what I’ll say in a bit), I am predisposed toward sales taxes until they become so onerous that a black market develops. At that point, I’m more a fan of Friedman’s approach on a flat-tax basis. Obviously I would prefer to get rid of Social Security and MediCare entirely, but there is a floor on medical services beyond which we should not go because of the cost of communicable diseases to everyone.

The most regressive tax we have is property tax when one realizes that low-income people pay them in their rent. All of that said, my comment was not so much about what we should do as to how we should talk about what we should do to prospective voters.

Please also explain how many people you think fall into this category, that are not transitional. Do you think 10%, 20%, 50% of our workforce exists in a long-term status of working poor, which qualify for this consideration? Let's start somewhere and discuss in real world terms what you think would fix this.

Frankly, I have no clue. Nor is that germane to what I was saying:

But beyond that, I wasn't talking as much about the actual rates as much as I was addressing the way the right talks about them in the public debate. The people we are trying to recruit into an opportunity economy see right through that sort of argument,..

I honestly don't know what you want to do here? IMO, the way you help these people, is you get them a better paying job, and you tell the federal government to accept the fact that it should cut it's appetite by 75% or more. We are not going to recruit the poor, by savaging the people who are in a position to hire them. Going after the incomes of people with more money, just means they won't be hiring as many workers. You raise taxes on small businesses, they cut employees. You lower taxes on small businesses and they expand and hire more employees. This is simplistic, but it's not just blown smoke.

I am in no disagreement with you about how we treat employers, particularly small business (who get screwed more regularly than just about anybody).

I’ve written a whole booklet about all sorts of ideas about what we do for low income people, particularly as regards our failed education system, about which I would like to make a couple of points before going on. As citizens, you and I are party to an agreement with every child who enters a public school. While it is true that said product sucks pond water, the children had little to no choice about partaking of a system that is designed for them to become public dependents. These people are badly brainwashed. It is they who we need to convert to productive conservatives with their righteous anger directed at their former jailors.

You see, I am coming to the conclusion that although conservatives are very good at developing ideas about how things should be, we are very bad at conjuring doable ways of getting there. That is why it is fairly pointless to ask me about what I think should be done when what I’m about to lay out is a dynamic response on multiple fronts.

We have two challenges at building wealth. The first is converting the people sucking off our tax dollars into people who produce wealth instead of consuming it. Every such case involves a degree of capital investment.

Before the welfare state, the welfare state was churches and civic volunteer groups. They had two huge advantages over the welfare state: (1) nobody likes giving up their money, (2) nobody likes begging for money. Thus both transactants have a reason to end the relationship. The giver righteously expects a change in behavior out of the recipient.

Me: ...especially when they see executives taking vacations on corporate jets etc. Everybody knows those benefits aren't taxed, just like we all knew how Teresa Heinz sneered at the idea she should pay much of anything.

IMO, it is this kind of specious argument that allows the left to lump us in with the worst of their own malefactors where the backbone of the Republican Party is small business. Unless you want to put a lid on corporate compensation packages and perks, you are going to see things like this. CO, this is a class warfare arguement. IMO, we do a disservice to ourselves if we allow the left to use class warfare arguements without responding on point. Why would any corporate executive want to work for Kelloggs at $100k per year, if they could work for a much smaller business and make the same amount of money? There would be less headaches, the same pay. And if you think the smaller business should pay less than $100k, then why work as a CEO when you could work as a mid-level manager for the same pay? And if you think the mid-level manager should make less, then why not just work on the floor (figuratively speaking), because you wouldn't have the headaches of management without the requisite compensation. Can't you see the destructive effect this would have?

The market either sets these rates, or we jump off into a business environment with so many socialist geared regulations, that we have lost the battle without firing a single gun-shot. We will have become a socialist business environment nation.

Please show me where I suggested the government regulate executive pay. OTOH, I do think abuse of tax exempt foundations is rampant and should be looked at more closely.

Me: This "the poor don't pay taxes," crap, and that's what it is, fails to grab the opportunity to show those who might listen the way the left keeps them down. That makes me crazy. Give us honest measurements and thoughtful explanations and we'll start winning a lot more elections.

I don't have a problem with the honest measurements and thoughtful explanations, but I don't really see this quite the way you do. I spent several decades making dirt poor wages, while I raised two children, supported a wife and a home, and put my children thorough six years of parochial school in a single wage earner environment. And not once did I buy into what you are selling here. I considered my plight to be mostly of my making. I also continued to think that I would advance myself over time. And in the end, I did so.

It seems to me that the argument is that we do not explain why some compensation packages seem out of line, but they honestly aren't. It seems that we are to tell corporate executives that we are going to get their salaries in line with a socialist oversight program. We are going to tax higher wage earners more. We are going to go after corporations. Then we are going to try to get the poor to join us, because we are better than the left.

IMO, they are out of line, because the pattern of interlocking directorates as dictated by mutual fund managers is really creating a form of restraint-of-trade that is royally screwing both the customer and the stockholder. I’m pondering a law that one must voluntarily assign voting rights with stock managed by a third party. The way it is now, the cronies of mutual fund traderss are raiding corporate treasuries.

The only problem is, they won't be joining a Conservative cabal if we do this. They will be joining a socialist group, something we should be finding ways to avoid.

You are contrasting against issues I never advocated.

Bud, isn't what you are pushing simply a conversion on our part?

DO, as much as I like you personally, this is a habit you really must expunge in dealing with me. Just because I oppose something “our side” seems witlessly wont to do, doesn’t mean I support “the other side.” Unlike most folks, I am actually capable of new ideas. I live outside the box.

I thought we were supposed to be converting others to our way of thinking.

No, we are supposed to come up with BOTH ideas that work and ways of selling them. If you disagree, explain where I am going wrong. I'll listen.

LOL, to paraphrase Dan O’Neil, ‘Hear the sound of my keystrokes typing drown the sound of my postings hyping.‘

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