Wednesday, May 4, 2011

UPDATE: Darrell Steinberg's "Local Tax" Bill Passes Committee

Last month, we wrote about SB653, Darrell Steinberg's proposal to allow California counties to impose their own taxes at the local level. Well, apparently the determination of Democrats in Sacramento to pass tax increases during a recession is unchanged: today, the Senate's Governance and Finance Committee approved the bill along party lines. It now goes up for a full vote by the Legislature.

The idea behind the bill is to ease the burden on government at all levels in California. If counties can raise their own taxes independent of Sacramento, they'll be less captive to impasses like the current one. And California, in turn, will find it easier to balance its budgets if counties demand fewer funds from Sacramento. Of course, since this is Darrell Steinberg we're talking about, the bill explicitly attacks private individuals and businesses by specifying the types of tax increases localities may levy: income taxes, use and sales taxes, vehicle license fees, and various "sin" taxes.

Our feelings about the bill haven't changed. We believe that taxation is indefensible, but if it weren't, we'd almost be tempted to defend this one. We like the idea of localities making Sacramento less relevant, because it's much harder for local politicians to avoid accountability for tax increases. And it amuses us that people like Steinberg don't seem to be considering the possibility that people will vote with their feet. We wrote yesterday about the lower Inland Empire taxes causing a hemorrhage of population from Los Angeles County, and Steinberg's bill would only exacerbate that. What's more, counties would have greater leverage to style themselves as tax havens, offering an alternative to the crushing taxation that would surely swallow places like LA and San Francisco.


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