California Gov. Gray Davis (D) proposes massive tax hike to pay for runaway spending from his freewheeling first term in office, as taxpayer-friendly officials say "No New Taxes."
WASHINGTON – California taxpayers growled in usual resentment of their governor today, as Gray Davis (D) proposed an $8.3 billion tax hike to pay for the massive government spending commitments of his first term in office.
The newly proposed taxes include a 1% hike in California\’s sales tax, which is already among the highest in the nation, and a hike in the state\’s highest income tax bracket from 9.3% to 10 and, in some cases, 11%. Davis also proposed increasing taxes on cigarettes by $1.10 per pack.
"I don\’t remember Gray Davis talking about this kind of tax hike when he was running for reelection," said taxpayer advocate Grover Norquist, who heads Americans for Tax Reform (ATR) in Washington, "which is yet another reason for California voters to dump these tax-and-spenders when the time comes."
California\’s budget shortfall is fueled by overspending, and totals nearly $35 billion, or more than the entire economy of Costa Rica. The governor\’s proposed tax increases would account for 23% of the amount needed to bridge the projected budget shortfall. The sales tax increase alone would generate an estimated $4.6 billion annually, while raising the income tax rate on California\’s citizens would generate $2.6 billion and the cigarette tax will bring in $1.2 billion more for spending.
"Governors across the nation are talking about how these are the most difficult fiscal times since the Great Depression," continued Norquist, "but this is like comparing fresh lamb to spoiled mutton. The problem is not the economy, it\’s that governors like Davis spent hog wild when times were sweet and they want to punish taxpayers when the economy soured up a little."
Some states, like Colorado, control spending constitutionally by tying their budgets to the inflation rate and population increases. Colorado, with a high-tech economy much like California, does not face the same problem.
"Hiking California\’s taxes is an insult to every California entrepreneur and taxpayer," continued Norquist, "and Gov. Davis shouldn\’t be surprised when they pack their bags, sell their homes and move elsewhere."