Tax Increases “Off the Table.”
Legislators promised no new taxes for Californians today. At a press conference, Senator Tom McClintock said the following:
15 Senators and 31 Assembly members have now signed written contracts with their constituents NOT TO RAISE TAXES – more than enough to stop any 2/3 tax measure. And the Senators and Assembly Members with us today are here to demonstrate their commitment to maintain that pledge throughout the upcoming budget deliberations.
Our severe fiscal crisis is caused by a spending problem and not a revenue problem.
In the last three years, while state general fund revenues have grown 23 percent, spending has grown by more than 30 percent. Three years ago, state government consumed an unprecedented $8.80 of every $100 of personal income. Today it consumes $9.54.
And to those who say, “Surely we can’t bridge the deficit with spending cuts alone,” the answer – as a PRACTICAL MATTER – is, WE MUST.
Because, as economists from Adam Smith to Arthur Laffer have warned, raising taxes in a weak economy is like a shopkeeper raising prices in a sales slump.
We’ve learned that lesson the hard way in 1991. An attempt to close a budget gap by raising taxes broke the back of the economy and turned a recession into a near depression. The tax hike not only failed to bridge the budget gap, it produced two consecutive years of billion-dollar revenue declines that weren’t halted until the taxes were rescinded. That’s a lesson we shouldn’t pay for twice.
The NO TAX PLEDGE is a nationally-recognized contract that began as a project of Americans for Tax Reform, whose national chairman is with us today. The public affairs group that I chair, Citizens for the California Republic, will be tracking every tax vote in the legislature, and communicating with the more than 75,000 citizen-activists on our mailing lists and communicating to other taxpayer organizations throughout California.
The No Tax Pledge is a contract between representatives and constituents, and it is something we intend to take very seriously.