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Are Tax Breaks the Same as New Spending?

Friday March 10th, 2017   •   Posted by K. Lloyd Billingsley at 3:03pm PST   •  

The elimination of taxes on feminine hygiene products is a global movement, but California governor Jerry Brown has been a staunch opponent of the tax cut. Last September he vetoed seven bills that would have cut taxes, and in his veto message he said “tax breaks are the same as new spending – they both cost the general fund money.” This year California Democrats have revised their proposals by cutting the so-called “tampon tax” and replacing it with a new tax on hard liquor. Assembly Bill 479 would increase taxes on liquor under 100 proof by $1.20 per gallon and on liquor over 100 proof by $2.40 per gallon. Beer and wine would be untouched and distributors would bear the tax increase. The measure needs a two-thirds vote to pass. For their part, taxpayers might want to veto Brown’s notion that tax breaks are the same as new spending.

In a tax break, a consumer gets to regain more of her own money. In new spending, the state spends the money it grabs from taxpayers. By the standard of government greed, all tax cuts must be “paid for” and the state must never suffer a reduction in revenue, like a worker who loses a job or has his wages cut. By this logic, if the state eliminated a useless agency such as the California Coastal Commission or the California Institute for Regenerative Medicine, it would have to start a new useless agency to compensate. Meanwhile, if the state wants to save money, there are plenty of ways to do that.

For example, stop allowing California Highway Patrol bosses to retire and then boost their already gold-plated pensions by claiming a disability. Consider, for example, former CHP assistant chief Kyle Scarber, 53, who bags a pension of $125,000 a year. Scarber also faces criminal charges for aiding his son, accused of rape, to escape to Mexico. As this plays out, Scarber is demanding that CalPERS give him a more lucrative disability pension. It’s a safe bet that Scarber will get what he wants.

Many CHP bosses have boosted their pensions with dubious disability claims known as “chief’s disease.” To eliminate this waste and fraud would not be “the same as new spending.” Like eliminating the tampon tax, it is simply the right thing to do.

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March 2017