Meg Whitman and the Tax Obsession

So Meg Whitman has made it official, and in today’s LA Times, she outlines her positions. The ones she knows, at least.

• In favor of Prop 8, but thinks existing same-sex marriages should stand (trust me on this, Meg – that’s the mugwump stand that will have everybody pissed off)
• Against Proposition 187 (she wasn’t a California resident when it was on the ballot, so didn’t actually vote on it)
• Not sure about school vouchers (or perhaps she hasn’t finished reading the literature on GOP orthodoxy yet)
• No way on taxes (apparently, she made it to that page in the GOP briefing book)

Here is Whitman on the tax issue:

At a time when California has frozen tax refunds and halted highway construction to preserve solvency, Whitman, who described herself as a billionaire, said the state should not ask even those in the highest income-tax bracket to pay more.

“One of the things which I’m sure you know,” she said, “is that 1% of the people in California pay 50% of the taxes, right? And I am not in favor of raising taxes on anyone right now.”

At the same time, Whitman praised former Republican Gov. Pete Wilson for his role in the 1990s budget crisis. She said the tax hikes imposed by Wilson — whom she described as the greatest California governor in memory — made sense at the time, even if they would be inappropriate now.

OK, so past tax increases were ok, because a Republican proposed them, or something like that. But now – well, the only direction taxes should go is down.

Here’s where I simply don’t understand today’s Republican party. I get that they don’t like taxes – in isolation, nobody does. But they seem to think that the only costs faced by the citizenry are those directly levied by the state.

However, I effectively pay a health insurance tax because we don’t have universal coverage in California, so medical costs increase to cover those who can’t pay and are uninsured.

Friends with school-age kids face an education tax when budget cuts make public schools an unacceptable option due to reduced staffing and inadequate materials.

Everybody pays a car maintenance tax when bad roads, left unrepaired for lack of funding, cause flat tires and send alignments out of whack. And a lack of usable mass transit tethers people to cars even when they’d prefer a public alternative.

Must I go on?

I’ve never thought of the modern Republican party as a collection of complex thinkers. They’ve applied a Manichean filter to everything, it seems – taxes, wiretapping, gay marriage – and, as a result, have lost a lot of folks who subscribe to their basic (or maybe I should say previous) small-government philosophy but can’t abide their incredible inflexibility.

Which brings us back to my question for Meg Whitman: Which pain is worse – the pain inflicted on families making, say, a quarter of a million a year or more if they have to pay an extra 1% of their marginal income to the state, or the incredible pain inflicted on everyone else if you aren’t willing to ask those who are able to pay to do so?

California’s historical greatness stems from a 60’s-era investment in physical and intellectual infrastructure. That incredible framework has been allowed to decay. I’m not a corporate historian, but my sense is that when Whitman ran EBay, she was willing to invest in both the human capital of her company and the improvement of its critical (IT) infrastructure. Republicans are always claiming we should run government like a business, and while I disagree, because governments have a different charge than most businesses, if you use business as a model, isn’t one of the most important factors in long-term success your willingness to invest in your future?

I think California is ungovernable, and until we don’t need a 2/3 vote for budgets and tax increases, it will remain so. But thinking that one can return California to greatness without a lot of pain – including more money from some taxpayers – is folly, and if the Governator years have taught us anything, surely they’ve taught us that.