Gasoline Tax Refund Proposal: Take Credit Where Credit Isn’t Due

If the state of California ends up sending a $400 tax refund to all taxpayers in the state, regardless of income, in response to high gasoline taxes, don’t thank the legislature or the governor Gavin Newsom.

The credit will likely belong to a gentleman of the mark of Paul Gann who was part of the dynamic tax crusading duo of Howard Jarvis and Paul Gann who gave politicians their reward for paying lip service to tax relief. throughout the 1960s and into the late 1970s.

Both were behind the 9.0 Richter Scale quake known as Proposition 13 that shook the California government to the core. Before Proposition 13 became law, governing bodies drew up spending plans and simply raised tax rates to cover any shortfalls instead of cutting spending.

Voters passed Proposition 13 in 1978.

The more gregarious Howard Jarvis, who ran small-town newspapers and also ran unsuccessfully for the U.S. Senate in 1962 and repeatedly for mayor of Los Angeles, was the face of the revolt of the property tax which capped annual property assessments at 2%.

Gann, who was in real estate and automobile sales before an unsuccessful run for the U.S. Senate in 1980, was the face of Proposition 4 which passed in 1979.

Known as the Gann Initiative, it capped government spending at 1978-79 levels with adjustments allowed for inflation and population growth. The voter-approved initiatives require excess taxes to be refunded when the Gann limit is reached.

This first happened in 1989 when the state budget surplus exceeded the Gann limit by $16 billion. Then Governor George Deukmejian followed the law imposed by the people, as all taxpayers received checks for $400 to eliminate excessive excess revenue that the state could not legally own.

Deukmejian did not deceive people. He did not claim that it was the greatness of the government or its political will to reimburse the money. He credited the Gann Initiative adopted by voters.

The same cannot be said for Gavin Newsom, the only other governor forced by Proposition 4.

Last year, the state had a $76 billion surplus, about $45 billion more than is legally allowed by the will of voters.

Newsom did not present it as a tax refund as dictated by Proposition 4. He referred to it as a Golden State stimulus refund to help people cope with the economic ravages of government-mandated shutdowns to make in the face of COVID-19.

It was at least a self-serving dishonest twist. And at worst, it could have violated the letter of the law given that the reimbursement did not go exclusively to the taxpayers per se.

There’s no question that all adults, whether they’re on welfare, clearing their tax obligations through deductions, owning property, or sleeping rough, are taxpayers. The state sucks in money in several ways, one of the most important being through sales tax. Rare is the adult who avoids paying sales tax at any given time of the year.

Golden State’s stimulus formula took into account minor children of taxpayers who already receive tax relief for said dependents.

The state’s next budget surplus, pegged at $45.7 billion by Newsom in January, could rise by $23 billion based on a projection released in late February by the US Legislature Analyst Office. State.

If this occurs, the excess will clearly trigger the Gann Initiative mechanism requiring refunds. It’s funny, but based on the size of last year’s surplus that had to be refunded, which was $600 per taxpayer, this year it’s called a “tax refund on ‘gas’ of $400 per taxpayer. This $400 is proportional to the lower surplus that the law could oblige to reimburse this year.

The twist — openly taken by red and blue politicians with a mile-wide yellow belly band — that it’s a gas tax refund because the California legislature believes our pain at the pump is as big of a lie as last year’s $600 was to help we deal with the economic fallout from the government’s lockdown dictates.

The money they paid back as part of Golden State’s COVID stimulus — and which they want to pay back as a gas tax refund — is money the state is not legally permitted to hold.

That’s why there’s hardly a peek in Sacramento neighborhoods rushing to try to ravage any possible surplus to fund glorious new spending initiatives on the proposed tax rebate on petrol. When the dust settles, the $400 per taxpayer will likely end up being fully funded with money that topped the voter-imposed Gann initiative.

The people you should have been grateful for last year for the $600 check and this year if a $400 check materializes are Paul Gann and those who supported his impersonation at the polls in 1979 and not anyone walking in the halls of the State Capitol today.

As for those dishonest politicians who specialize in ignoring the law and numbers when engaging in class warfare, the debate over whether every taxpayer, including Mark Zuckerberg et al, should receive a $400 Gats tax refund check, regardless of income, is like firefighters. their duty by pouring kerosene on a burning house.

There is no doubt that had it not been for the huge capital gains pocketed by Elon Musk and other wealthy individuals, the state would not have crossed the Gann line last year or this year.

Yet Sacramento politicians stuck it to those who paid the most by denying them a dime in tax refunds.

So what if they clearly don’t need a $600 discount based on their personal financial needs? The final tax bill we all pay doesn’t pass a litmus test of whether we can afford it based on our personal financial circumstances.

This is why a tax refund as mandated by the California Constitution when it was amended by the passage of Proposition 4 in 1979, disguised as a gasoline tax refund, should be granted to all taxpayers.

This column is the opinion of the editor, Dennis Wyatt, and does not necessarily represent the opinions of the Bulletin or 209 Multimedia. He can be reached at [email protected]