George Skelton is the dean of the Capitol Press Corps — the left-of-center columnist for the Los Angeles Times started writing about the politics of the Golden State well before my parents even thought about conceiving my older brother, and I’m in my forties.  To say that I often disagree with George would be an understatement — but that’s okay, he’ll tell you that it is mutual.  Still, I have enjoyed a positive relationship with him going back to my rabble-rousing days back in the late 80’s and early 90’s as a conservative youth activist.  As both an observer and a participant in the California political scene, I always read George’s columns — which are always well written, and fit well with the ideological “leftness” of his employer.

George’s column today is focused on state budget politics, and is mostly devoted to a political and policy play by Senate President Darrell Steinberg to put pressure on Republicans to agree to re-hiking all of the income, sales, and car taxes which end on June 30th (technically the income tax ended on December 31st of last year).  Steinberg has introduced a particularly odious bill that would basically grant to local government jurisdictions the authority to place any tax increase they like, on just about anything, on the local ballot for approval (so, for example, a school district could place a local income tax or corporate tax before voters).   This is Steinberg being Steinberg.  He’s a smart as he is liberal, and will use any means at his disposal to try and tempt, cajole, threaten or assault Republican legislators that stand between him and his goal of preserving California’s extensive welfare programs, and preserving the high paying jobs and benefits for the public employee union members — whose union dues go to elect more people like Steinberg.  My issue is with the actions and rhetoric of Allan Zaremberg, who is President and CEO of the California Chamber of Commerce.  Here is an excerpt from the column today…

Fact is, Zaremberg and other business leaders have been working behind the scenes to prod Republicans into voting for Gov. Jerry Brown’s proposed tax extensions — just not aggressively enough for Steinberg.

“We’ve told Republicans,” Zaremberg says, “that a budget solution is good for the economy long run. And if they get criticized by antitax groups, we’ll be there to back them up.”

The chamber and other business interests prefer broad-based taxes — such as Brown’s proposed levies on income, sales and vehicles —rather than narrower hits on the super-rich or oil companies.

CalChamber President Allen Zaremberg is advocating a budget deal that includes massive tax increases.

Let’s be clear here — a big part of the reason why Californians the last two years have been paying billions in additional income, sales and car taxes (and also taking a hit in the child tax credit) is due to the “fine works” of Zaremberg and the California Chamber of Commerce.  In 2009 when there was an opportunity to force the kinds of deep cuts in state government spending that we are seeing this year, Zaremberg was a “ring leader” for a budget deal that was absolutely terrible for taxpayers.  But worse, in the same deal where broad-based taxes hit every taxpayer in the state, big-business interests got tax breaks in the billions.  It was a terrible time, and the only silver lining was that a two year extension of those same taxes (again, supported by Zaremberg and the Chamber of Commerce) was resoundingly rejected by voters in a special election.  There is no doubt that these additional taxes were defeated, in large part, due to the coalition of anti-tax groups that out-organized the left, and had the popular sentiment of the people on their side, as they do now.

All of that having been said, politics is a sport that often times finds the teams changing quite a bit based on the issues involved and the timing.   Two years later, in 2011, we have seen a tremendous coalition of both taxpayer protection organizations and business groups large and small come together to oppose any more new taxes, including the current proposal by Governor Brown and Capitol Democrats to hike the income, sales and car taxes once again, starting the day after they are due to expire.  Yet, just at the time when tax relief (the kind that helps to spur economic growth) is about to occur, Democrats want to smack taxpayers again.  Well, apparently Democrats, Allan Zaremberg and the California Chamber of Commerce.

The good news is that the business community is not monolithic and bad actors like Zaremberg, who apparently can’t actually play team ball with a coalition against higher taxes if his life depended on it, are not calling all of the shots.  The disturbing part of Zaremberg’s not-so-behind-the-scenes efforts to put together a budget deal that would include massive tax increases is that, again, he is supporting broad-based taxes on all Californians.  How much do you want to bet the Chamber of Commerce would be all up in arms if instead of income, sales and car taxes, the proposal on the table was big taxes on large corporations?

Well, guess what?  Next year the public employee unions are preparing a number of tax increase proposals to take to the voters — which include a bevy of levies that will cause many of the companies who pay big dues to the California Chamber to cough up a lung.  Some of those that are being seriously discussed include raising property taxes on businesses (the so-called “split roll” tax), oil severance taxes, taxes on alcohol, and (of particular interest to the highly compensated CEO’s that populate the CalChamber Board), and a big hike in the income tax for those making the most money.

It is very short-sighted of Zaremberg and the Chamber to work contrary to the efforts of a broad coalition to oppose increases in broad-based taxes this year.  Because next year, Zaremberg is going to want — no, he will expect groups like the Howard Jarvis Taxpayers Association and the National Taxpayer Limitation Committee, the National Federation of Independent Business, California, Americans for Prosperity, Americans for Tax Reform, to name only a few, to rally to his side to oppose these taxes that hit his parochial constituency the hardest.  Well, I can tell you that the “buzz” going around the taxpayer protection community this morning is very critical of the Chamber, specifically because of their efforts to facilitate Brown’s tax-increase proposal.  Zaremberg should stop playing checkers, and play a little chess.  Instead of being part of a coalition this year to raise taxes on all Californians, the Chamber should be a part of a coalition for 2012 to protect all taxpayers, from the large-scale assault coming from the unions.

The good news is that even in the time I have spent writing the column, I have heard from business-community leaders by email and phone distancing themselves from Zaremberg’s statements.  So there is a strong coalition to protect taxpayers that includes many in the business community.  The California Chamber’s Board of Directors has to decide if they are going to be a part of it.  If Zaremberg’s quotes today are any sign, I’m not optimistic.

This entry was posted on Thursday, May 12th, 2011 at 9:32 am and is filed under Blog Posts.