Written by Julianne Foster
California is feeling the heavy weight of the $54 billion in debt hanging over it, preventing officials from properly providing relief to residents, even as they continue to suppress the economy from recovering. As the state and the public stand on the edge of a financial crisis, competing sects of Democrats in the State Legislature have devised alternate plans to pay off some of the debt.
Democrats on the Party’s more leftist wing want to pass a bill which would predominantly raise taxes on millionaires. The legislation would back Prop 15 on the November ballot, which further hikes taxes on large commercial properties. In defense of the proposed tax bill, Assemblyman Miguel Santiago, a Los Angeles Democrat who wrote it said, “We’re talking about folks who are doing extremely well in California while the rest of California hurts. This affects less than 0.5% of tax filers in the state.”
However, California is already known to have exorbitantly high taxes rates in comparison to other states in the country, yet the state remains hopelessly in debt under Democrat control. Californians cannot properly trust officials with their tax money, which has become even clearer amid the COVID-19 pandemic.
More moderate Democrats are proposing a $100 billion “no tax” solution, which would borrow money from the federal government. They also include encouraging Californians to prepay their income taxes in exchange for future vouchers. Such a plan has the allure of not raising taxes immediately, but there is concern that awarded vouchers may function like bonds and be subsidized by taxpayers.
“We have to be smart about how we fund government,” said State Senator Bob Hertzberg, a Los Angeles Democrat and sponsor of the $100 billion package. “The way we’re doing it now is causing unnecessary problems, causing unnecessary tension among parties.”
The tension building between these two options is an example of what Hertzberg was talking about. Californians are growing restless as they see little hope of regaining their jobs with the initial unemployment claims reaching 7.3 million since mid-March.
It’s crucial for officials to take steps towards the best financial solutions, without heavily taxing already struggling residents—now or in the future. It’s also important for that money to be used in the best interest of the people and relieving the state of some of its debt.
