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One Race May Determine Whether Taxes Go Up By Billions In The U.S.’s Largest Economy

Posted by Thomas Gordon on August 8, 2014

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The top prizes up for grabs in the 2014 mid-term elections are control of the U.S. Senate and 30 of the nation’s governorships, but of more immediate consequence to taxpayers in the most populous state in the union – California – is one single state legislative race that is likely to determine whether or not taxes will rise by billions in the world’s eighth largest economy.
A two-thirds vote is required to raise taxes and fees in California; meaning that if Republicans cannot win over a third of the seats in the Assembly and Senate this fall, they will have no ability to stop Democratic proposals to raise taxes. The only reason that California Democrats are temporarily without a supermajority in both chambers right now is due to the indictment of three Democratic state senators this year. Many of the Golden State’s top political and electoral experts say Democrats’ unchecked ability to raise taxes in 2015 and 2016 depends on one state legislative race in Orange County: California’s 34th state senate district.

“Even with California’s already inhospitable tax climate, the public employee unions desperately need higher taxes to keep their unsustainable pensions and bloated salaries afloat, and they can be expected to pump millions into this one state senate race to ensure that they can continue to advance their agenda at the expense of California taxpayers,” said Jon Fleischman, publisher of California’s Flash Report.

Fortunately for California Republicans, they have a strong candidate in Janet Nguyen, a current Orange County Supervisor, to go up against former Democratic Assemblyman Jose Solorio in this crucial race. Nguyen, who emigrated to the U.S. from Vietnam at age 5, describes herself as “a believer in limited government,” and says that if elected, she would spend taxpayer dollars the way she spends her own. That would certainly represent a stark contrast between both the status quo in Sacramento and her opponent’s legislative record.

During his time in the state Assembly, Solorio was a champion of higher taxes and the state’s high-speed rail project, which is shaping up to be a boondoggle of historic proportions. Solorio, like most California Democrats, also appears to be a candidate safely in the back pocket of the state teachers union. As the Orange County Register recently noted, “he disagrees with the recent landmark Vergara ruling that struck down California’s two-year tenure and seniority (“last-in-first-out”) rules for teachers, saying he would not change those rules.”

“Janet Nguyen’s candidacy for state senate is the most important political fight in 2014 for Californians,” said Brian Calle, Opinion Editor for the OC Register and Editor-in-Chief of CalWatchdog.com. “And if Nguyen is victorious,” added Calle, “Democrats would not have the necessary two-thirds majority in the Legislature to unilaterally raise taxes in the Golden State”

California Democrats have made no secret of their desire to further raise taxes. Many of their proposals have already been filed as legislation. Proposals have been put forth in the past two years that would impose statewide tax increases on soda, energy production, the profits of companies whose executive salaries exceed some arbitrary threshold set by Sacramento bureaucrats, and business property taxes, just to name a few. In fact, California lawmakers are using this time before their September recess to push a plastic bag ban and ten cent tax on paper shopping bags. This bill, which Solorio voted for while in the Assembly, would then take this tax on every paper bag, which will disproportionately harm lower income households, and then turn and give it to the likes of Safeway SWY +0.47%, Ralph’s, and other large corporations.

Republican ability to stop the tax increases is even more important given that the Golden State is already one of the most heavily-taxed jurisdictions in the U.S., and the world for that matter. According to the non-partisan Tax Foundation, California has the fourth highest state and local tax burden in the nation, consuming 11.35 percent of the average California taxpayer’s income. Following passage of the personal and corporate income tax increases championed by Gov. Jerry Brown in 2012, California is now home to the nation’s highest top marginal income tax rate (13.3 percent) on California workers and small businesses. Extending those “temporary” personal and corporate taxes is something California Democrats could do all by themselves if they return to Sacramento in 2015 with a supermajority.

“We have three Democratic state senators that were either convicted or indicted this year alone. Some would say that such corruption is a symptom of the one-party rule that has existed in Sacramento for years,” said Fleischman. “This race,” said the OC Register’s Calle, “will decide whether there is balance of ideas in state government or one-party rule.”

Like George Wallace standing in front of the schoolhouse doors telling Yankees to butt out, many California politicians are fond of telling folks from around the country to mind their own business while the state runs off the rails. However, California’s economy is simply too large and too important to the nation’s economic health for the rest of the country not to be concerned. Keep an eye on California’s 34th state senate district this November. Depending on the outcome, it could cost taxpayers billions.

Read Patrick Gleason’s original story at Forbes HERE

2 Responses to “One Race May Determine Whether Taxes Go Up By Billions In The U.S.’s Largest Economy”

  1. KenCoop said

    Funny how Fleischman wasn’t concerned about one-party rule in DC when the GOP controlled the legislative and executive branches of government.

    That control lasted six years.

    Yet now that is considered a negative in CA.

  2. WideStance said

    I normally vote straight conservative, but after her crony fiasco with Cal-Optima, losing her few tax votes worries me less than what she will be doing IN BETWEEN them!

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