With Talk of Tax Hike, Angelides Could Be Too Brave for His Own Good

You can say this about state Treasurer Phil Angelides: He’s consistent. He’s committed. He’s even courageous.

That said, he may also be crazy politically -- leading the charge, as he long has, for a tax increase to balance the state’s books and improve education.

Even if it is a “soak the rich” tax he’s pushing, a lot of upper middle-class folks are bound to get nervous, thinking government may be reaching into their pockets next.

“Beyond idiotic,” says Garry South, chief strategist for Angelides’ front-running opponent in the Democratic gubernatorial race, state Controller Steve Westly.

Westly has staked out a pain-free position, one certain to appeal to many swing voters: He’d raise taxes only as a “last resort” after going after money owed by tax cheats and making government more efficient.

Sounds good, but it’s an

eye-roller for many numbers-crunchers, including Angelides.

“My first job will be to try to get efficiencies out of government,” Angelides told me, “but no one who’s sane and sensible thinks he can close the [budget] gap with a bunch of gimmicks or efficiencies.

“You know, [Gov. Arnold] Schwarzenegger was going to find billions of dollars in waste, fraud and abuse. And now Steve Westly is his reincarnation....

“I’m not going to bamboozle people. I’m not going to tell them that with some fairy dust we can close the budget deficit and fund our schools.”

And as for raising taxes as a “last resort,” Angelides says: “When? When we’re in our seventh year of deficit spending? When our schools have fallen from 48th out of 50 [states] in achievement to 50th? When is enough enough?

“The fact is, Steve Westly’s just too timid. He’s not willing to stand up and call it like it is.”

Westly’s rejoinder to the

Sacramento Press Club last week was: “I have a better chance of winning the Mr.

Universe title then Angelides has of getting Republicans [in the Legislature] to vote for a tax increase.”

Westly, 49, is slightly built and of medium height.

Angelides, 52, answers this way: “Schwarzenegger says he won’t do it. Westly says he’s too weak to do it. I’m not going to run up the white flag of surrender before I even take office.

“Plus, if this is what I campaign on and win on, I’ve got a case to make to the Legislature that the people believe this is the right thing to do.”

And if he fails? “I’ll take my case to the people” with a ballot initiative.

In one way, Angelides is refreshing. Although pounded by pols and pundits, he’s holding his ground and not going into the usual candidate’s dodge: claiming to be misinterpreted by the news media. He isn’t backing down from a position that has raised concerns even among supporters because he’s constantly accentuating it.

“Who in their right mind would be talking about a tax increase in April when people are filling out their tax forms?” asks one anonymous Democratic strategist and Angelides rooter.

Polls, however, show that soaking the rich -- as long as it’s just the rich -- is acceptable to most voters. In a January survey by the Public Policy Institute of California, 79% of Democrats and 66% of all likely voters favored raising income taxes on the “wealthiest” Californians “to help pay for state spending.”

Angelides says that whoever is governor next year will face a $5-billion spending deficit if schools are fully funded and also receive a payment on what they’re owed from a Schwarzenegger budget deal.

The two-term treasurer advocates filling the gap by raising income taxes on couples making more than $500,000 and closing loopholes or hiking rates on corporations. He figures this would roll back roughly a third of the $17 billion in “obscene” annual tax breaks these two groups have received from the Bush administration and Sacramento in recent years.

But what if voters in June pass filmmaker Rob Reiner’s preschool initiative, Proposition 82, which would raise taxes on couples earning more than $800,000? Doesn’t that ruin Angelides’ plan?

No, he insists.

“We’re the wealthiest society in human history. Can we squeeze out $5 billion from corporations and multimillionaires to fully fund our schools? Sure we can, if we want to.”

Why not hit all taxpayers? “Let’s start with those who have gotten the most.”

And if they pick up and move to Nevada? “They always threaten that. They didn’t do it under Ronald Reagan [when he raised taxes]. They didn’t do it under Pete Wilson.

“I’ll tell you when they’re going to Nevada: if our schools continue to deteriorate ... if traffic congestion continues to be so bad companies don’t want to be here and people can’t get around. Absolutely, they’ll go to Nevada.

“People like Steve Westly and Arnold Schwarzenegger and Phil Angelides can pay a little more.”

Especially Westly. His EBay-generated fortune reportedly is in the hundreds of millions -- compared to the apparently single-digit millions Angelides made off of housing development.

The result is that Westly has money to burn on TV ads, while Angelides hasn’t been able to afford spots for three weeks.

Dominating the expensive air war is the main reason Westly has soared to 11 points ahead of Angelides in the latest Field Poll.

“This is a tough period, there’s no question about it,” Angelides says, referring to his TV blackout and widespread carping by campaign backers. “I would agree it’s an uphill fight. But the fight’s just beginning. I’m a fighter. We’re going to finish strong and big.”

An “independent expenditure” committee -- not constrained by candidate contribution limits -- is trying to rescue his candidacy by running ads promoting Angelides. The main bankroller is Angelides’ former developer partner, Angelo Tsakopoulous, who with his daughter has kicked in $5 million.

Angelides says he’ll be back with his own TV ads “in a matter of days. I’m going to talk about where I want to take this state.”

Good idea. He should talk a lot about that and less about raising taxes.

George Skelton writes Monday and Thursday. Reach him at george.skelton@latimes.com.