Tuesday, October 12, 2004

Save the kids, tax the Rich!

Now, I'm one for taxing the more wealthy amongst us to help society overall. The extra tax hit on these folks isn't as big as the hit would be on someone who is just making ends meet. Afterall, the working class person's taxes come straight from wages (assuming they don't save very much). The wealthier person most likely has a nest egg which provides a buffer from any big expenses (like a new convertible).

Okay, so I'm not trying to convince you about taxing the rich here. This post is specifically about NOT taxing the rich just because they are an "evil" target. I should also note that I don't consider my wife and I to be rich, but I do believe we're wealthy in the sense that we have savings and if either one of us lost our jobs we'd still be able to stitch together a life without landing in poverty. Besides, we have the buffer of our families...who would sacrifice life and limb to ensure that we don't end up destitute. Anyways, that's another story for another day.

The real story today is about Proposition 63 which is on the November ballot here in California. If you're a voter in California you really should read the entire link. It's pretty comprehensive and summarizes the facts as well as both sides of the argument. If you're not a Cali voter, then I'll save you the time and give you the one liner:
This proposition establishes a state personal income tax surcharge of 1 percent on taxpayers with annual taxable incomes of more than $1 million. Funds resulting from the surcharge would be used to expand county mental health programs

Seem simple enough? Well, as a one liner...err two sentencer...it seems like a no brainer. Let's help fund county mental health programs with money which comes from people that don't really need it. Ok, so while in many case, I think it's appropriate to be Robin Hood, in this case, I think it's just social services gone wrong. Why? Because there doesn't seem to be any connection here.

Of course mental health programs are needed and it's a great cause. And this tax payer funding would apparently save the state $100 million annually across various areas (according to non-partisan state analysis). Additionally, the tax would be deductible from federal taxes, so the wealthy wouldn't feel the pinch.

While I agree the rich wouldn't really feel the pinch on this, I think the proposition just provides fodder to folks who believe "tax and spend" is just wrong. The supply siders in the house would argue that it's better to keep the money in the hands of the wealthy so they can invest it in businesses, yada yada. Okay, the standard supply side argument is nonsense, but I'm on the same side as them in this case.

The wealthy have targeted here for no other reason than the fact they have money. The authors of the proposition haven't really thought this through to provide a good argument as to why these wealthy people should be made to pay for county mental health services. Generally, state level tax proposals are tied together decently. An example would be to tax drivers to pay for road maintenance and public transport projects. Now, the projects may not be thought through well, but at least you can make the connection between drivers and roads and transportaion.

But the wealthy and mental health?

The other thing about this is that a very specific area of health care has been chosen here. I'm not sure why some other area of state funded health care wasn't chosen. Why not emergency rooms? Why not long term preventative care for heart disease? I wouldn't be surprised if there are new propositions in the next election cycle to fund those programs.

And that's where you start losing the argument about spreading the wealth. I can see why supply siders are tired of "more and more taxes". It's because they aren't convinced about the worth. Now, they may never be totally convinced, but there should not be such huge gaps in logic here.

And finally, this proposition apparently has wide support. Last I heard, people are in favor of it 2-to-1 (66 yes-33 no). Who knows if it'll pass, but I know I'll be voting against it. In county and state elections I've been for funding good public services which are connected tightly to the source of funding, but I've been very much against vague plans to improve "things" with new bonds or taxes. Even Bay Area transportation plans have been filled with holes or filled with tertiary projects and so I've voted against them. So I'll be voting against this one. If you're a voter in Cali, I suggest you read up on this one and think seriously about where this one will lead us.

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