Proposition 63


My take on Proposition 63 - NO

This is part of my ongoing series of posts on each of the Propositions we'll be voting on. Here is the original post, with my ground rules for evaluating propositions, my scorecard and links to each of my arguments.

Proposition 63 - No

John Mark Reynolds, in explaining his no vote on Prop 63 simply stated "'Thou shalt not covet' is good economics." A good summary of why we should stand firm on this one, and one of the many reasons why "but I'm not rich" is never a good defense of an argument on fiscal policy.

Prop 63 proposes a 1% tax on anyone who makes more than 1 million dollars (who can say that without thinking of Dr. Evil?), in order to fund mental health services. But it also does more than that, it prohibits the state from lowering the funding for mental health services. Both are bad ideas, lets look at them individually.

Taxing the top 1% is a bad idea first because it is unfair. As Dr. Reynolds stated, there is no getting out of the fact that "soak the rich" taxes are simply covetousness dressed up in politics. Its also a bad idea because rich people create jobs and wealth for everyone else. Imagine what happens when all of these rich people, who own companies, pick up and move to another state that doesn't tax them heavily. They take jobs and their spending money with them. Lastly, it is a bad idea because soak the rich taxes inevitably end up harming you and I. Remember, the federal income tax was made possible only by amending the constitution, and the argument they used was that it would only be a tax on the rich. If you pay anything in federal taxes (which is probably everyone reading this) then you know soak the rich taxes are a lie.

The second reason actually adds to the problem of the first. It fixes the amount of money we must spend on mental health services - regardless of whether or not we need to spend that much money. Imagine an ideal situation where we have a medicinal breakthrough that cures mental illness (not likely, but it illustrates the point). Prop 63 dictates that we still have to spend the same amount of money that we've always spent. Even worse, lets say those millionaires move away from CA and our revenues from the soak the rich tax drop to zero. Well, we still have to fund all the services we started with the millionaires' money, so to whom will the government look? Thats right, you and I.

Bottom line: Soak the rich taxes leave everyone all wet, and the last thing a fiscally irresponsible legislature needs is a MINIMUM requirement in the budget.

Posted: Sun - October 31, 2004 at 07:45 PM | | | | | | |

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