Re "Smart Tax Laws Would Put More Money in California's Pocket," Commentary, Dec. 2: On the surface, Kirk Stark, UCLA professor of tax law, seems to promote a good idea: raise federally tax-deductible state taxes to lower the amount of California dollars making a trip to Washington. Kill the sales tax and raise the car tax, stick it to "the rich" (whoever they are) with higher state income and property taxes and all will be fixed. Only problem is, the state will still be getting back only 77 cents of each dollar that goes back East. That is what needs to be fixed. California has too long subsidized other areas of the country with little concern for the expenses incurred here from federal mandates and lapses.
Stark points out that there are smarter ways to tax Californians that would save us money vis-a-vis the federal government. But there are also smarter ways to tax people that save money, period. By shifting -- but not raising -- taxes away from income, business and sales taxes (which hurt the economy, the poor and small-business owners and make people hate the government) to behaviors that cost the state money, the government can have its cake and eat it too. Government will take in the same tax dollars, but its costs will be significantly lower.
When the government taxes tobacco and alcohol, use declines, which saves lives from cancer, disease and drunk driving. Shifting taxes to pollution and gasoline consumption saves lives lost prematurely to dirty air and water and cuts down on traffic and congestion. Though it is probably a political nonstarter, shifting taxes to high-fructose corn syrup and corn oil would mean fewer Californians would suffer from cavities, diabetes and obesity -- saving lives and millions in medical costs. There is a smarter way to run a government, and hooray to whichever party figures this out first.
Any Californian who shares Stark's lament that lowering the auto license fee has deprived him of a valuable tax deduction has an instant remedy available: increase your charitable contributions by the same amount. That too generates a deduction from taxable income and a reduction in federal income tax. Of course, many taxpayers may realize it's costing them $100 to save $35 or less in taxes (using Stark's data) and conclude this makes no economic sense.