The Swarm

Mix it up with The Bee's editorial board.

January 31, 2010
Meg Whitman's tax cut idea finds support in an unlikely place
  Meg Whitman on MSNBC.JPG

Republican gubernatorial candidate Meg Whitman called for a specific tax cut in her latest round of East Coast television appearances--and is finding support in a surprising corner of Sacramento's lobbying corps.

The former eBay chief executive officer, appearing on MSNBC's Morning Joe show, called for "targeted tax relief," specifically calling for an end to what she called a "factory tax."

She complained that in California, manufacturers must pay sales tax on the equipment they purchase to make whatever widgets they sell.

"It is a really good reason to go overseas or to a neighborhing states," Whitman said of the sales tax, which is 9.75% and generates more than $1 million annually.

It's no surprise when a Republican wants to cut taxes. But it's a little unusual when Lenny Goldberg and Jean Ross, two leading tax and budget experts from the left in Sacramento, don't reject the concept out of hand.

Goldberg said such a break should not go to utilities or telecommunications companies, but rather to tech companies and other true manufacturers.

Goldberg is a lobbyist whose clients include organized labor, and is head of the California Tax Reform Association. He said Whitman's idea "is not wrong."

Goldberg said such a break makes far more sense than the roughly $2 billion in corporate tax cuts that Gov. Arnold Schwarzenegger and the legislature approved last year--and that our Rex Babin captured so perfectly.

"If you're going to give away money to corporations, that is a better way," Goldberg said.

Ross, of the California Budget Project, said the cut would not be a bad idea "if we had an extra $2 billion."

"The question is, 'How do you pay for it?' It is problematic given recent tax breaks," Ross said.

Whitman also criticized California's initiative process, something that will not endear her to the more populist wing of her party. 

Said Whitman:

"The referendum process dates back to 1918, I think. It has its useful purpose but there is no question we have had too many referendums on the ballot and too much spending has been propositioned into process. I think you have got to have a different approach, no question about it."

Minor notes. It was 1911. And most Californians refer to it as the initiative process.

You have to wonder what Schwarzenegger thinks about that, what with all his initiatives.

--Dan Morain 

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About The Swarm

The Swarm is written by members of The Sacramento Bee's editorial board. They meet daily and are separate from the newsroom. Views included here are those of individual writers, and do not necessarily reflect those of a majority of the board or the positions expressed in The Bee's editorials.

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