Tuesday, April 25, 2006

No matter what the bill number is, tax hypocrites are still tax hypocrites

In recent days, SVLG and State Senator Elaine Alquist launched a counter-attack defending SB1291, a bill that would exempt corporations from state sales taxes, as well as Measure A this June. Patrick Moore offered an analysis of SB1291 and how the corporations would benefit from this bill.

John Ambroseo, speaking on behalf of SVLG, argued that supporting SB1291 and Measure A is not hypocritical because they are "somewhat separate issues." Supporters of SB1291, which also supported SB552, claims that SB1291 is not a tax shift because local sales taxes would not be exempted. A close look shows otherwise.

One of the arguments used by the Measure A proponents is that the county needs extra funds due to the reduction of subsidy from the state and federal government. In the county's presentation to the Board of Supervisors, the county claims that "State support for local services, specifically, health and human services has dropped by 16.5% over the past 4 years."

Currently, over a quarter of the state general fund supports local health and human services, with most of that funding transferred to local counties to implement various social programs. If SB1291 passes, the state government would lose $2.1 billion annually, and therefore would reduce its ability to support services provided by the county, and increase the need for local counties to identify other funding source to support its programs. In addition, SB1291 would reduce the state's ability to fund for K-12 along with higher education, which more than half of the state general fund goes to.

Although Alquist and SVLG can claim their move from supporting SB552 to SB1291 as a pragmatic move not to reduce local tax revenues, both SB1291 and Measure A would still mean a shift of the tax burden from corporations to small businesses and families. No matter what the bill number is, tax hypocrites are still tax hypocrites.

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