At least twice in the past few days, Democratic gubernatorial nominee Phil Angelides has made intriguingly softened statements about his centerpiece plan to raise taxes. “As governor, if I need to do it,” the challenger to Governor Arnold Schwarzenegger said to a Chico TV station, “I’ll close corporate tax loopholes, I’ll ask people who make a half a million dollars or more a year to give back some of the tax breaks they’ve gotten.”
He said the same thing to another TV station. “If I need to, I’m going to close corporate tax loopholes and I’m going to ask people making over half a million dollars or more a year to pay their fair share again so we can have the best schools, more affordable college, balanced budget.” The Angelides campaign had no comment on this equivocal-sounding stance.
If he “needs to do it?” That is a different tone from the Democratic primary just past. There was no equivocation there. The treasurer made a very resolute statement on April 5th, when he declared his tax hike program the centerpiece of his agenda.
“I’ll fully fund our schools, roll back the Schwarzenegger tuition hikes, expand financial aid, and open the doors to college wider than ever — and I’ll balance the state’s budget. I’ve said exactly how I’ll pay for this — by closing corporate tax loopholes and asking multi-millionaires to pay their fair share again.”
A Democratic advisor following the governor’s race closely notes that it is time for Angelides to try to get back toward the center. “He had to go hard left to beat Steve Westly, to appeal to the hardcore, tax-and-spend voters that could win it for him in a low turnout primary. It was the best, easiest way to make him the real Democrat in the primary and survive that eBay fortune.”
Meanwhile, Angelides has found an industry he thinks should get new tax breaks. The entertainment industry. Usually, it is a big source of funding for Democratic candidates for high office. It hasn’t been so helpful to the opponents of Arnold Schwarzenegger. Angelides told the Associated Press yesterday that he wants new tax breaks to stop the phenomenon of “runaway production” to other states and countries. How would he pay for these new tax breaks? By eliminating other tax breaks, i.e., closing corporate tax loopholes.
But nearly three months after he unveiled his tax plan, it remains remarkably vague. Even before Angelides proposed to call on it for another set of state expenditures.
When I asked Angelides following his April 5th speech laying out the program to specify which corporate tax loopholes he would close, he replied that he had a “$2.5 billion” program of corporate tax loophole closures, saying his campaign would send me the list. Which it did not.
Later that day, following his debate with Westly at the taping of Univision’s Voz y Voto, we did return to the question of exactly what the treasurer is calling for. I had asked him earlier to be specific about his corporate tax loophole closure program, and he had said his staff would send me a list. What was actually sent was not a list of those loopholes Angelides proposed to close, but a very general discussion of the state’s fiscal situation.
Noting this, I asked the treasurer to name some of the loophole closures in his program. He mentioned three, then referred me to the web site to look up the rest. I didn’t see the program on his web site.
Later, the Angelides campaign, via sometime communications director Nick Papas, sent me a list of corporate tax loopholes to be closed. Only eight, and with no revenue figures attached to any of the loophole closures.
“Close the “yacht loophole.” Eliminate special resource depletion deductions for gas and oil companies. Keep small business Subchapter S tax break for small businesses alone. Repeal sales tax exemption for farm and timber machinery. Repeal sales tax exemption for diesel used in agriculture. Repeal sales tax exemption for liquid petroleum gas used in agriculture. Close the expatriate corporation loophole. Close the “nowhere income” corporate loophole.
“Additionally, the Treasurer has proposed legislation requiring a detailed annual review of tax loopholes currently in the tax code as part of the budget.”
That was it from the Angelides campaign.
In the absence of an Angelides analysis of his program, the California Taxpayers Association, which opposes tax increases, did its own analysis of how much revenue the proposed Angelides corporate loophole closures would provide the state. They came up with a total of less than $1 billion per year.
Those sums are all well under the $2.5 billion per year Angelides cited after his rally speech.
Later in the spring, after many questions about the continued vagueness of the program, Angelides press secretary Brian Brokaw said that what the treasurer is providing in terms of detail are “examples” of what he would do, if he were to win the election.
The full program would be unveiled later.
With this week’s rhetorical hedging — and a new proposal not for “loophole” closure but loophole creation — it is time to see what “exactly” the program is.