It's deja vu all over again in California. Once again the state is facing a massive budget deficit, this time to the tune of $16 billion.
The Democratic governor said the size of the deficit makes it virtually impossible to balance the budget with spending cuts alone, so his budget balances the cuts with the revenue he anticipates if voters approve his proposal to hike the statewide sales tax by a quarter cent and boost income taxes on those who make more than $250,000 a year. Both tax increases would be "temporary".
Never mind the fact that California is the Prime Example of Why Tax Hikes Fail.
Brown's budget proposes $8.3 billion in cuts, $5.9 billion from the tax increases and $2.5 billion in a variety of other solutions. If voters reject his tax initiative, Brown is proposing an automatic cut of $5.5 billion to K-12 schools and $250 million each to the California State University and University of California systems.
Enter the the following video from the Center for Freedom and Prosperity offers seven reasons why higher taxes are a bad idea. While the video focusses on the Federal Government, the principles and arguments against increased taxes are the same for California lawmakers who are once again considering raising taxes:
The video is narrated by Piyali Bhattacharya of Young Americans for Liberty, and here are her seven reasons.
1.Tax increases are not needed
2.Tax increases encourage more spending
3.Tax increases harm economic performance
4.Tax increases foment social discord
5.Tax increases almost never raise as much revenue as projected
6.Tax increases encourage more loopholes
7.Tax increases undermine competitiveness
These reasons are true for all levels of government - federal, state and local.
As we've said time and again, taxes are a poor substitute for doing the heavy lifting of re-thinking, reorganizing, and re-prioritizing government. No state better illustrates the failure of tax increases than the one time Golden State.
Enough is enough. It's time for Government - Democrats and Republicans alike - to live within their means. Tax hikes never solve budget deficits, and this time around will not be an exception to the rule. It is time to reform the system and make it work for the people - not against them.