Several items on my Christmas political wish list never got delivered. Maybe next year. But probably not.
Some of the items are just too expensive politically for the legislative elves to package up and give out.
• One thing all Californians need is a new, modern state tax system to mesh with the federal tax law passed last week by Congress. But we’ve actually needed it for decades.
The old-fashioned system we have is like one of those 1950s model train sets that keeps running off the track. It’s too volatile. The revenue flow is five times as volatile as the state’s personal income itself, nonpartisan analysts say.
It leans too heavily on the state income tax. When the economy is good, that produces strong revenue flow. When it’s bad, the flow slows to a trickle. So it’s either boom or bust for state services such as educating kids and fighting wildfires.
The state income tax produces 70% of state general fund revenue and the sales tax less than 20%. In the 1950s, it was the opposite.
California has the nation’s highest state income tax. That burden has been softened until now because we’ve been allowed to deduct state taxes on our federal tax returns. But not so much starting next year.
State income and local property tax deductions will be capped at $10,000 total. That’s only roughly half of what average tax itemizers have been deducting. So the state income tax is going to hit many Californians much harder.
A nice late Christmas present the Legislature and Gov. Jerry Brown could deliver would be a new system that substantially lowers income tax rates while broadening the sales tax to include services such as auto repairs and legal fees. While at it, also lower the sales tax rate.
“Democrats are whining and whining” about limiting the federal deduction for state and local taxes, says Republican consultant Wayne Johnson. “Why don’t they recognize that the state income tax is an anachronism. We’re going to have to find other ways to fund government. This is an urgent need. Let’s have a revenue-neutral tax reform.”
But the governor and lawmakers of both parties aren’t interested. Too tough. Too politically risky.
Instead, state Senate leader Kevin de León (D-Los Angeles) announced Friday that there will be legislation to “mitigate the damage” of the new federal tax law. “The Republican tax scam disproportionately harms California taxpayers,” he asserted.
No details. But one idea, according to his office, is to reduce state personal income taxes and replace the revenue by charging businesses a “payroll tax” for each employee. Unlike individual taxpayers, businesses could write off the payroll tax on their federal returns.
But that seems like a headache for business and a sure way to discourage it from hiring new workers.
Another idea is to allow individuals to voluntarily donate money to the state. Then they could deduct it on their federal return as a charitable contribution. That really sounds cockamamie.
Back to my Christmas list. These are the other things that should be filling California’s stocking.
• A clearly written rule book on sexual harassment in the state Capitol. A guide that spells out what’s forbidden and the consequences for harassers, predators and plain pigs.
Sure, this is tricky. But, come on, there are basics: Hands off. Shut up about sex. Be professional. “No” means no.
Remember what our mothers taught us.
Whistleblowers must be protected. Investigations need to be conducted by trained outsiders, not foxes in the henhouse. Punishments range from losing committee posts to being booted from the Legislature.
And culprits must always be publicly exposed, not hidden behind confidential settlements funded by taxpayers.
• Along with that, we need a more efficient, less expensive system of replacing legislators who resign.
Two assemblymen accused of harassment — Raul Bocanegra (D-Pacoima) and Matt Dababneh (D-Woodland Hills) — have announced their resignations while denying the charges. Special elections will be needed to replace them.
A special election costs taxpayers up to $1 million or more. In the last 12 years, there have been 46, including some runoff contests, to replace 30 state lawmakers who quit for various reasons. Most ran for higher office and won. Some took high-paying jobs with special interests.
It takes months for a resigning lawmaker to be replaced so the district’s citizens can again be represented in Sacramento.
The solution is to allow the governor to fill the vacancy. He already does that for vacancies in the U.S. Senate, any statewide office or a county supervisor.
Legislators resist this idea. They fear the governor’s power. But that could be crimped by requiring a governor to replace the resigning lawmaker with someone from the same party. Also allow the affected legislative house to veto the selection.
My idea would be quicker and cheaper.
• Lastly, I coveted a California-relevant Rose Bowl game on New Year’s Day. Instead, Santa delivered Oklahoma vs. Georgia, a real gift-return item.
That game doesn’t cut it for those of us who aren’t college football addicts, but simply desire a family-oriented, traditional match between champions of the Pac-12 and Big Ten conferences.
Yes, I know, the Sooners and Bulldogs are playing for a spot in the college championship game. They’re ranked Nos. 2 and 3, respectively. So what?
No. 8 USC and No. 5 Ohio State should be playing in Pasadena. Instead, they’re competing in the Cotton Bowl in far off Arlington, Texas. And it’s not even on New Year’s Day.
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