Thursday, May 26, 2011

Not buying the premises

© 2011 Joshua Stark

California State Senate President pro tem Darrell Steinberg says that a budget deal with Republicans is close, which most likely means that:

A)  A tiny cadre of probably termed-out Republicans will support a tax increase, most likely in the form of regressive taxes (sales, vehicle license fees, etc.); and
B)  Democratic leadership will probably support environmental regulatory shortcutting in the name of "job growth".

I don't buy either premises.

First of all, the notion that we can re-establish a robust state government relying even more heavily on the backs of the poor and lower-middle class are ridiculous.  I've talked about the problem with regressive taxes before, but I'll be clear and concise right here:  A tax that disproportionately impacts poorer people is unethical and bad economics, because it devalues dollars by moving more valuable dollars (one dollar is worth more to a poorer person than to a richer one) into a pool of less valuable dollars, it exacerbates the problems of poverty (which require more government expenditures to fix), and it makes government revenues rely upon a more volatile base (poor people's purchasing power fluctuates a lot more than rich people's, which is why everybody wants to be rich).

The second premise is a bit more hidden:  If Democrats agree to curtail environmental regulations in order to grow California's economy (jobs), then they are agreeing to the premise that environmental regulations are dragging California's economy.

I've yet to see a study showing this to be true.  Further, I've seen studies showing that, if anything, the opposite is true.

To be honest with you, the majority of places where California's economy is in dire straits are those places where: 

A) California's environmental regulations have been lax or inconsistently applied;
B) Places where California's economy has always suffered.

Think places like the Central Valley and other poor communities.  For goodness' sake, we refer to them as environmental justice communities! 

Just consider this another unintended consequence of term limits.

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