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Davis' Teacher Tax Cut Won't Make the Grade

Education: After educators, what other public servants should be exempted from taxes?

May 16, 2000|JOEL FOX | Joel Fox is a Los Angeles consultant and president emeritus of the Howard Jarvis Taxpayers Assn

When the Earth was threatened by an asteroid in the movie "Armageddon" a couple of years ago, the U.S. government asked a team of crack oil drillers to plant explosives in the asteroid to knock it off course. When asked what reward the drillers sought for accepting the risky job to save the world, their leader, played by Bruce Willis, made a quick reply: "They don't want to pay taxes again. Ever!"

The idea of eliminating taxes as a reward for public service has jumped off the movie screen into real life with Gov. Gray Davis' proposal to zero out the state income tax for certified teachers.

Davis sees Armageddon approaching for public education. He has staked his governorship on improving student accomplishments. Davis thinks one of the ways to win the battle is to give teachers the ultimate break when it comes to paying state income taxes.

With this proposal, Davis is once again emulating Clinton politics. The president has been successful with targeted tax cuts for such groups as middle-class taxpayers and parents with school-age children. Davis has taken what he calls the "bold" next step, targeting a tax exemption to an entire profession. He says he wants to make a statement "that above all else, teaching matters."

Davis' goal of using financial incentives to enhance the teaching profession is worthy. However, his method is more than faulty.

Exempting an entire profession from taxes has never been done before, according to the governor's office, with the exception of wartime. And that exception showcases a weakness in this proposal. Soldiers and sailors put it all on the line for the people back home. Firefighters and police officers also do dangerous jobs on behalf of the public. Why not a similar waiver for them? Expect other public employees to seek similar tax-cut favors if the Davis proposal becomes law.

If implemented, how will this proposal play with the general public? Given the fact that most public employees enjoy better benefits and pensions than the general public, this latest boon could be a negative when, say, a school-choice voucher initiative such as one headed for the November state ballot is considered by voters.

But the real fault of this plan is that increased pressure for tax increases will come from well-organized people who will not have to pay the taxes they seek to raise. The 283,000 credentialed public school teachers would initially save about $545 million in state taxes. This amount is easily covered by the billions of dollars in budget surplus. However, when taxes have to be increased, all other taxpayers would be subsidizing teachers.

During downturns in the economy, the powerful teachers' union will lead the charge for tax hikes to keep whole the education budget, as it did during the last recession. This time, however, its members would not have to pay the tax. If teachers do not share the pain of taxes with other citizens, they have little reason not to continue a drumbeat for more spending and more taxes.

Perhaps the governor should include an amendment to his plan that dictates before any future tax increase is passed, the teachers' state income tax exemption must be forfeited.

If other civil servants jump on the bandwagon of tax exemptions for public service, the balkanization among all citizens over taxation will only get worse. Ultimately, this talk of giving tax breaks to public servants may go beyond teachers, firefighters and police officers. Politicians may even seek tax exempt status. Talk about Armageddon.

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