A colleague in a meeting yesterday said succinctly what many of us have been thinking for a while: Why is it that tax increases are temporary, while cuts are permanent?
The current 2008-09 budget makes about $10 billion in permanent cuts, yet only $18 million (yes, Million) in permanent tax increases. The big-ticket tax increases, denying businesses the ability to claim losses or credits, are temporary. After they expire, businesses will collectively make back their losses within two to four years.
And if Gov. Arnold Schwarzenegger’s proposal goes through as suggested, unequal treatment of cuts versus taxes will happen again. To fix our gaping and growing shortfall — now pegged at $11 billion — Gov. Arnold Schwarzenegger proposed a 1.5-cent sales tax increase that would expire in three years. Meanwhile, the $4.5 billion in cuts will go on indefinitely. For health care, it means $150 million in reduced services this year, which grows to $1 billion in future years. (on top of more than $600 million already cut this year. )
How is this fair?
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