Yesterday the Governor announced the twelve person membership of a special state task force that is being charged with reviewing the way that the tax system works in California, with the idea of recommending an overhaul to try and move away from the current volatile system where tax revenues are very mercurial, shooting up and down depending on external factors.

We’ll be writing more next week about this Commission, but FR reached out to one of California’s leading tax policy experts, Jon Coupal of the Howard Jarvis Taxpayers Association, for his reaction to the formal formation of the panel.

Perhaps in another time, and another place, I would be more sanguine about the formation of a commission to review California’s broken tax structure.  But if there were ever a reason to be skeptical, it is on full display in the manner in which the current budget negotiations have completely fallen apart.  Can this same cast of characters actually take visionary action to reform our revenue system?  I suppose it is  possible – just like it is possible that Pee Wee Herman could master astrophysics.

There is broad agreement that California’s tax structure leaves us exposed to wild fluctuations in revenue.  A progressive income tax structure, high marginal rates and, with a greater portion of the economy driven by consumer spending, increasing reliance on sales tax revenue.

Our caution regarding this commission is based, first and foremost, on the fact that all twelve members have been appointed by politicians (the Governor, Senate Pro Tem and Assembly Speaker) who are actively advocating for higher taxes.

Yesterday, the appointments were announced and taxpayer cynicism remains.  No doubt, there are a couple of good names on this list, like John Cogan of the Hoover Institute and Curt Pringle, but I  see neither an overwhelming display of taxpayer expertise or an institution that, as a whole, will have the taxpayers’ best interests in mind.

Ultimately, the proof will be in the final recommendations.  The test for taxpayers will be whether the recommendations result in an equitable, balanced and revenue neutral proposal – with the last element being as important – if not more so – than the first two.

Does any serious observer of California politics doubt that the final product of the commission, while being labeled as revenue neutral, will actually be so?  Don’t bet the farm.

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This entry was posted on Friday, December 12th, 2008 at 12:00 am and is filed under Blog Posts.