OPINION: ‘Stimulus Tax’ a contradiction in terms
By Michael M. Rosen
La Jolla resident“The difference between a taxidermist and a tax collector,” Mark Twain once quipped, “is that the taxidermist takes only your skin.” Pity nobody shared the joke with Dr. Paul Garver, who wants to represent La Jolla in the State Assembly.
In a recent op-ed in these pages, Garver laughably argued that Californians would enjoy prosperity, unicorns, and rainbows if only Sacramento would further raise our tax burden - already the highest in the nation.
The oil severance tax Garver favors would punish the remaining companies investing in California’s dwindling resources industry by piling yet another levy on top of the income taxes, regulatory fees, property taxes, and sales taxes they already shell out. In fact, by lowering the value of underground oil, economists believe that a severance tax diminishes the property taxes taken in by government.
Plus, let’s not forget it’s those same relatively unsympathetic oil companies, such as Chevron up in the Bay Area, who provide thousands of jobs to Californians and whose corporate profits underwrite the pensions of teachers and firefighters in the Golden State. Taxing them further hurts us all.
Finally, states like Texas and Alaska, with whom Garver unfavorably compares California, are indeed thriving, but not because of their oil severance taxes. Rather, the low regulatory and corporate tax burden in those states has spurred the kind of growth tax-afflicted Californians can only dream of.
And in this sense, Garver’s right about one thing: his suggestions that Californians “adopt the standard of economic practice” used elsewhere. Indeed, if the liberal Democratic club in Sacramento Garver seeks to join displayed even a modicum of fiscal common sense, welcoming businesses to the state instead of ousting them, we might turn our fortunes around. Scrapping the foolhardy oil “stimulus tax” would be a great start.