Raking in Millions? State Should Raise Your Taxes

Two months after hearing the renowned civics lecturer Shaquille O’Neal, his words still ring in my ear. You may also recall his comment:

“This is what I want you to teach your children today: Sacramento will never be the capital of California. Los Angeles is the new capital of California.”

The L.A. Lakers center, of course, was referring to the state of basketball, which he dominates.

The Lakers had just three-peated as NBA champs. Their crucial win had been over the upstart Sacramento Kings in the Western Conference finals.

O’Neal’s little joke at the L.A. victory celebration got me thinking: The real Capitol of California should tutor Shaq in civics by raising his taxes.

OK, let’s also raise the state income tax of Kings’ forward Chris Webber.

And home-run king Barry Bonds of the San Francisco Giants.

In fact, all big-bucks earners should be paying more. That includes investor Bill Simon, the Republican candidate for governor. And actor Arnold Schwarzenegger, who might be the GOP candidate in four years.

This simply is because it’s a bad system that taxes a struggling schoolteacher or a nurse at the same rate as a super-rich athlete.

The state’s hurting--suffering a revenue shortfall of about $24 billion--and everybody should be required to help. Not just hapless nicotine addicts, as Assembly Democrats propose.

Teachers already have been forced to surrender their unique tax credit. The six-and-seven-figure guys also should give up a little.

Senate leader John Burton (D-San Francisco) had a plan: For two years only, raise the top income tax rates on roughly 2.3% of the richest Californians. That would generate up to $3.3 billion annually.

The current top rate is 9.3%. This kicks in on all taxable income above $37,725 for a single filer and $75,450 for married couples.

Burton wanted to add two higher brackets: 10% for singles’ income exceeding $130,000 and for couples’ of more than $260,000; and 11% at $260,000 and $520,000 respectively.

It’s not as if this is unprecedented, Burton noted. Gov. Ronald Reagan, the conservative icon, imposed the 10% rate in 1967 and boosted it to 11% in 1973. Gov. George Deukmejian dropped it to 9.3% in good times. But Gov. Pete Wilson, balancing the books during a recession, raised rates again to 11% between 1991 and 1996.

“I don’t believe this is going to lead to a mass exodus out of the state,” Burton asserted during Senate debate.

Indeed, it’s impossible to envision Shaq demanding a trade to, say, the Memphis Grizzlies to avoid paying a higher tax.

But anti-tax Republicans would hear none of it. Cut spending, they cried, without specifying which spending. The bill stalled on the Senate floor for lack of even one GOP vote.

Gov. Gray Davis also opposed it, claiming that California already is too dependent on the volatile income tax.

Davis never has been a tax-the-rich populist.

He has been running from Gov. Jerry Brown’s tax-and-spend image ever since serving as Brown’s top aide back in the ‘70s.

Moreover, Davis has been convinced by his chief of staff, former U.S. Rep. Lynn Schenk of San Diego, that tax hikes are political killers. Schenk is convinced that voters bounced her from Congress in 1994 because she supported President Clinton’s tax increase.

But, come on, Shaquille O’Neal! He made $21.4 million last season and is working on a 10-year, $208-million deal, according to USA Today.

Lakers guard Koby Bryant got $11.3 million. Webber: $12.8 million.

Baseball’s Bonds: $15 million.

Bill Simon: $7.1 million in taxable income in 2000. He still hasn’t reported for 2001.

Schwarzenegger: $30 million for “Terminator 3.”

Higher tax brackets would not just nail players for California teams. The state has a “jock tax”--so named by economist David Hoffman of the Tax Foundation--which taps all major league players in basketball, baseball, football and hockey when they compete in California.

When Texas Rangers shortstop Alex Rodriquez plays in Anaheim Stadium, the state tax collector grabs part of his $22-million salary.

Which is how it should be.

Many stadiums and arenas are partially subsidized by the public. And that helps push up athletes’ salaries.

The Legislature and the governor tremble at taxing these rich folks. But after the November election, as tax revenues continue to fall short, the politicians will need to summon up some Reagan-and Wilson-like courage. They’ll need to rethink this. Now, all they can think about is slinking through the election.

Shaq actually may be onto something.

Rather than the capital of California, Sacramento is acting like the capital of cowardice.