Why would conservatives in California oppose a proposition that supporters are calling the Stop Hidden Taxes initiative? Because it doesn’t do a thing to address California’s runaway spending and skyrocketing deficit. In fact, the nonpartisan Legislative Analyst’s Office concluded it would add an additional $1 billion in transportation spending and General Fund costs to California’s budget each year.
If conservatives have learned anything from eight years of George W. Bush- and the Tea Party’s powerful influence might indicate that they have- it’s that cutting taxes while increasing spending only plunges the government into more debt, and the taxpayer into more financial obligations down the road. That shouldn’t be taken as blasphemy to the sacred Laffer Curve, which conservatives in the 1980s used to demonstrate that to a certain point, tax cuts will pay for themselves because of increased compliance with lower tax rates and the positive effect tax cuts have on growth for an economy, so that even though the government takes a smaller piece of the pie, it will be taking a piece of a bigger pie.
While the Laffer Curve is theoretically robust and (many economists will argue) has multiple real-world examples of success, the operative words in the paragraph above are “to a certain point.” At some point, it’s frankly absurd to believe that you can keep cutting taxes while increasing spending and come out ahead- and with the outlandish amount that California’s government is spending today, we are most certainly past that point.
And that is the ultimate rub with Proposition 26 to “Stop Hidden Taxes” -it simply does nary a thing about spending. One way or another, California taxpayers will be on the hook for every cent that its government spends or borrows to spend, and the more borrowing it does, the more taxpayers will have to fork over just to service the interest on all that debt. Trying to control taxes while ignoring spending simply forestalls the eventual pain, which only incentivizes more spending now and leads to more pain later. There’s nothing conservative or responsible about such a state of affairs, and meanwhile, conservative voters and activists are duped into believing they are actually doing something about the size of Sacramento, and enlisted into a futile effort to attack the symptoms of a fiscal cancer, while ignoring its true causes.
So, even if the worst of the progressive opposition’s accusations are completely false, and Proposition 26 will not at all protect big corporations from polluting or violating health and safety standards, conservatives still have a compelling reason to oppose it: Prop 26 pollutes the budget with a smokescreen to cover increased spending now at the cost of more economic hardship later, violates the health of California’s job market, and threatens the safety of its children’s future.
The only taxpayer-friendly policy is the one that cuts spending.