Let’s return
to the topic of state tax lunacy.
Our
destination? California, a frequent contestant (if not winner) of the popular gameshow
“Five Short of a Nickel.”
A citizen
initiative posted on the California Attorney General’s website provides the following:
This initiative amends the California Constitution, Article 13, Section 35,(b).
It adds a section 3 as follows:
"For the privilege of influencing public elections and political issues, a sales tax of 1,000% (one thousand percent) is hereby imposed upon Political Advertisements. The proceeds of which shall solely benefit California public education. There shall be no further exemptions to this tax except as federally required or as passed by a California ballot initiative.
Political Advertisements shall mean any political advertising delivered within the state of California. This is applicable to both cash and barter transactions. This includes but is not limited to all media spending by political parties, political action committees or candidates.
This sales tax will not apply to the first $1,000,000 (one million dollars) of spending within a calendar year by any tax entity. However, if a group of tax entities are controlled or coordinated then this first one million dollar of sales tax relief shall only apply to the group of entities and not to the individual entities.
If a Federal District Court or Supreme Court of the United States find this tax to be too high, then this law shall immediately ratchet down to the highest acceptable level and remain in place.”
Well then.
And it
perfectly typifies much of what has contaminated tax law in recent years:
(1) The insistence on wielding tax law to
accomplish a social program, whether by granting a boon (such as the new
markets tax credit) or striking a blow (such as the ACA penalty).
(2) The delegation of actual tax writing
to a non-electable bureaucracy. For example, what in the world does “Political
Advertisements” mean? He or she who gets to define this term will rank among
the most powerful of California politicos.
(3) An ignorance if not contempt for tax
doctrines, precedent or potential litigation. To begin with, the California
Franchise Tax Board would have to defend a 1000% tax against a free speech
challenge under the First Amendment. One also wonders whether the "takings" clause of the Constitution could be invoked. Is this really a tax issue or just the overheated opinion of a grievance dispenser?
Citizen
initiatives are peculiar to California politics. They began as a way to limit
the outsized influence of special interests but have devolved into a means to
sidestep Sacramento, assuming one can recruit a deep-heeled supporter willing
to fund the initiative. I trust there is little chance that this one will
pass.
Nonetheless,
let’s give a round of applause as we present the award to this week’s winner.
