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A lockbox for California taxes?

by Wes Messamore, published

Though he was ridiculed in the media (for no other reason than his boring demeanor), Al Gore was on to something with his 2000 Presidential campaign promise to put Social Security money in a "lock box" where politicians couldn't touch or spend it. The current system is a pay-as-you-go system where people who are paying into the program now are funding the retirements of people who are retired now, with the expectation that future generations of workers will fund the retirements of today's labor force.

The amount of money a person pays into Social Security may be far more or far less than the amount that they draw from it later in life, so some people are getting a free lunch and others are getting the shaft. Vice President Al Gore wanted to put your Social Security taxes into a "lock box" -or a single account just for you that the government wouldn't touch, and which would be waiting for you when you retired. This made more sense because it's not fair for a person to pay more into the system than they're getting out of it. Their money should be theirs.

While this principle seems pretty logical for individual people, we could stand to gain by applying it to states as well. Shouldn't states also get as much out of the system as they pay into it?  Shouldn't there be a "lock box" for states? The truth is that "California is, by far, the country’s largest 'donor state'. These excess taxes paid by Californians are distributed throughout the country to pay for government services provided to residents of other states. If Californians only had to pay their fair share of federal taxes, there would be enough money left over to eliminate the state budget deficit and still cut taxes in California by at least $30 billion per year.  That’s over $1,000.00 for every taxpaying California family."

Just like we blister at the possibility of someone spending their entire life paying into Social Security, then having their age eligibility raised and their monthly checks cut in half when they hit retirement, we should find it outrageous that the State of California pays more into the Federal coffers than it receives. California should get back roughly the same amount of Federal money in entitlements, projects, and Federal services that it pays in Federal taxes. Should there be some kind of "lock box" for states? Could there be? Could we feasibly account for every dollar California pays into the Federal system and make sure it gets roughly the same amount back?

There are a lot of complicated and not necessarily logical (and certainly not unified or coherent) criteria for whom we tax, how hard we tax them, and whom we dole the money out to. Here at the California Independent Voter Network, we are working hard to be a sounding board and a laboratory for ideas and innovative solutions to these kinds of problems.

So you are encouraged to sound off in the comment thread to this article and share your thoughts and solutions to the disparity that Californians face in our Federal system of taxation. What do you think?

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