The Schwarzenegger campaign opened the general election with a low-key but potentially destructive television commercial charging that Phil Angelides would raise taxes by ten billion dollars. Angelides’ people fought back by arguing that their man will only raise taxes by $5 billion. Something tells me that this is a debate that Team Arnold is willing to have over the next several months.
However, the ad was framed as a question of taking California "backwards". It referred specifically to "a time we never want to see again . when soaring taxes forced jobs and businesses to flee our state…" The reporters covering the announcement immediately began pressing to find out when this particular time existed, pointing out that Gray Davis’ only significant tax increase had been the $4 billion vehicle license fee that Schwarzeneger repealed several weeks after it was implemented.
Schwarzenegger campaign manager Steve Schmidt denied that the ad was referring to former Pete Wilson’s tax increase in 1991. Since Wilson has been a strong supporter of Arnold’s political career from the very beginning, Schmidt was clearly trying to avoid offending the former Republican governor. An admirable sentiment, but probably misplaced.
Because Wilson’s tax increase is an excellent example of what Schwarzenegger’s ad warns about. I should know. I was there, working for Wilson at the time of that tax increase and over the next two years when the state’s recession deepened and jobs did leave the state. Wilson [pictured to the right] himself has admitted that the tax increase was a mistake that had a negative effect on the state’s economy. Peter Ueberroth, who chaired California’s Council on Competitiveness, referred to the state’s tax and regulatory climate as a "lethal job killing machine". It wasn’t until Wilson took on the state’s overly burdensome regulatory apparatus, reformed workers compensation, and began to bring state spending back in line that the economy began to recover. And the boom that Davis later inherited was spurred in large part by the repeal of that ’91 tax hike and subsequent tax cuts.
Schwarzenegger’s greatest joy — and greatest political benefit — comes when he plays the bipartisan. So why not admit the obvious and criticize a fellow Republican and close friend who made a wrong decision? Wilson would certainly weigh in against that tax increase and talk about the importance of its repeal. And Angelides can then defend his own tax increase — and Wilson’s too.