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Jon Fleischman

Grover Norquist: Tax Hikers Damage The Republican Brand

In the last election, Californians elected more than enough Republicans to the state legislature to give the GOP the ability to block Democratic efforts to raise taxes in Sacramento.

Grover Norquist

This is one key job for Republican legislators in California: Stop the never-ending push from Democrats for billions in higher taxes.

California has nation’s the highest marginal income tax rate, the 8th highest corporate tax rate, and the 6th highest overall tax burden. If Republicans aren’t going to stop legislative Democrats from raising taxes at the behest of government employee unions who fund their campaigns, what purpose do they serve? Doorstops?  Organ donors?

Now Republicans in Sacramento are being put to the test. Will they stand up for taxpayers?  One worries.  

Last week the Los Angeles Times reported that Assembly Republicans are in the process of negotiating a deal in which they will provide the necessary votes to pass legislation that raises taxes on health care plans and managed care organizations. Republican votes are needed to reach the magic 2/3 vote requirement for a tax hike. The California Association of Health Plans supports the proposal, as the industry would be made whole at the end of the day. State lawmakers are notorious for raising hospital bed taxes for the same reason. The whole exercise is meant to game the federal matching fund system to draw down more federal dollars. I explained how it works in Politico:

“Step 1, state legislators raise taxes on health care providers; step 2, this activates a drawdown of as much as two to nearly three federal dollars for every dollar in tax hikes on health care providers; step 3, state officials, in turn,  give money back to the hospitals to make them whole; step 4, legislators pocket the extra federal dollars and, voila, have more money to either increase state spending or avoid necessary budgetary restraint.”

Some Assembly Republicans are reportedly interested providing the votes for this tax bill in exchange for dictating how an $800 million pot of money is spent. It would be foolish for legislative Republicans to give up the one thing that makes them relevant in Sacramento – the ability to block bills that raise taxes – in exchange for controlling how 0.003% of the budget is spent. That’s both bad policy and terrible politics.

Now is the time for California Republicans to make it clear to the GOP assembly caucus that they must stand firm against higher taxes—even when offered the bribe of being allowed to sit at the big kids table and dole out stolen tax money to their friends.  The Senate should hold firm. But that is no reason to give the assembly a pass on doing the right thing.

Republicans can and will come back to power in California.  The alternative is too horrible to contemplate.  But they must govern from the minority as they would in the majority if they are to convince all Californians they can be trusted with power.  Now is a time for Choosing.

Grover Norquist is president of Americans for Tax Reform