The Sloophole

by dday

I need your help.

I know this is a national blog and my work at California’s progressive site Calitics doesn’t usually apply. But if we don’t fight back against this stuff in the states, we’ll end up having to do the same thing nationally.

The situation in California is pretty simple; you have a Republican governor who isn’t as “post-partisan” as advertised, a Democratic majority that is a bit too prone to bending over backwards, and a Republican minority that is batshit insane. Out here we grow our Republicans as anti-tax economic conservatives, with a splash of anti-immigrant rhetoric thrown in, but mainly Norquistian anti-tax “drown the government” types. We have a structural fiscal crisis that is only getting worse, with a budget deficit nearing $16 billion dollars. All of the tricky borrow-and-spend games that Schwarzenegger has played over the years are catching up to him, showing him to actually be a worse fiscal steward than his predecessor Gray Davis. He’s consistently touted a cuts-only approach to solving this budget gap, with practically no revenue additions whatsoever. This despite the fact that the state is perpetually in a state of financial disaster dating back to the property tax revolt of 1978; we simply don’t bring in enough money to cover the vital services needed for a functional society. There’s also this problem that any tax increases require a 2/3 majority, so a tiny sliver of the Legislature can block the desires of the many. As a result the state is falling into the toilet.

Twice in the past week, Republicans have blocked the one policy on which Schwarzenegger and the Democrats agreed on: fixing a loophole that allows yacht owners to avoid paying their sales tax. Let’s go back over that. This is not a tax increase. This is making sure that people who purchase yachts pay the same to the state that any citizen pays when they buy any other item. It’s funny how the loopholes are never for purchases at the 99 Cent store, isn’t it? Yet the Republicans saved the loophole once, got pilloried for it in the press, and promptly blocked it again, and in the most craven way possible. 16 Republicans just took a little walk and opted out of the vote rather than be on the record as down with yacht owners over the sick or the elderly.

Yacht buyers will continue to benefit from a loophole that allows them to avoid sales tax on their boats, after Republicans in the Assembly blocked an effort to close it Tuesday.

Closing the tax loophole — “sloophole” as it has come to be known by Democrats — takes a two-thirds majority vote in each house of the Legislature, which requires some Republicans to get on board. Not enough of them did Tuesday, so on a 47-18 vote by the 80-member Assembly, the move to scuttle the tax benefit failed.

Last week, lawmakers voted to cut schools, healthcare and welfare programs by $2 billion.

“It is unconscionable to cut education and welfare while not closing this loophole,” said Assembly Budget Committee Chairman John Laird (D-Santa Cruz). “Everyone needs to be part of a budget solution, including yacht owners.”

Political experts call this a “gift.” You have the Republican Party prioritizing the interests of yacht owners. Is there any better expression of the conservative movement in our new Gilded Age? Government must be limited, welfare must be limited, but the wealthy must get tax breaks and wealth must be distributed upwards. It’s worthless to even list their tired arguments (rich people would leave the state! We’ll bankrupt the yacht business! Uh, no.), but it’s crucial to understand why the Republicans think they can get away with this. After all, the constituency of yacht-owning tax cheats is relatively small, and the constituency of people who would be outraged at yacht-owning tax cheats is somewhat larger, even in supposedly Republican districts.

The main problem, as Dave Johnson notes, is that the political culture in California is painfully thin.

It is generally understood that the average citizen has been fed enough unanswered anti-tax and anti-government propaganda that they reflexively oppose taxes. (The operative word there is “unanswered.”) But this is a very different thing. This is a special exclusion, just for rich people, that one way or another has to be made up for by the rest of us! Why aren’t the people of California more upset about this?

The only conclusion I can reach is that the Republicans understand that regular people are not going to find out about this! And they may well be correct. Yes, the story was in a few newspapers, but really, who reads newspapers? This is not how large numbers of regular people get their information about politics in California. They get some of it from TV news, but I really fear that most people in California get their information about the issues facing the state from ads that run during prime-time television shows. And I think that conservatives understand this, while progressives/liberals do not quite “get it.”

For example, if regular people were accurately informed about California issue, then people would understand that most of the factors that were used as justifications for recalling Governor Gray Davis are today almost the same with Governor Schwarzenegger. One big difference I see is that the energy companies are not running an ad campaign blaming Governor Schwarzenegger for anything, they way they ran ads blaming Governor Davis for the energy-company-created energy shortage back then.

The problem that Johnson nails is that these depredations consistently go unanswered. The group with the most incentive to fight back against such a thing is the California Democratic Party. But they’re staffed with a bunch of part-time consultants; two of them are heading up this new pro-Hillary 527. So we have a nation-state of 38 million people, almost no state media, and an part-time Democratic opposition, which is fairly content with its legislative majorities and doesn’t have the manpower to do much of anything else.

This really frustrates me. We actually have the opportunity in 2008 to get very close to 2/3 majorities in both chambers of the Legislature and get rid of this thuddingly stupid 2/3 requirement once and for all, and considering that the top of the ticket will be bringing in all these new voters, it’s a very realizable goal. But you have to make the Republicans pay for their policies.

In true “we are the change we’ve been looking for” fashion, I put together a short message from the California Yachting Association thanking the state GOP for saving their tax loophole. The total budget for the ad was about $2.00 worth of gas:

The California Republican Party’s phone number is 916.448.9496. I’m asking you to call them, tell them you’re a yacht owner, and thank them for sticking up for them instead of those lucky duckie poor people or children or the sick.

My point is that it’s unbelievably easy to put Republicans in a corner on this type of stuff. And there’s a great deal of value in framing your opponent early and often. Literally nobody knows about the type of shenanigans the Republicans here are pulling, like the “sloophole”. If the California Democratic Party sees the “proof of concept,” that there are very simple ways to get this message out, maybe they’ll actually put some resources above my $2.00 in gas money toward it. A cable buy or radio ads could be very effective. So could showing up at every event with a Republican for the next year in a boat captain’s hat and giant cigarette holder and blue blazer and making a big stink out of the state GOP’s love for yacht owners (their state convention is at the Hyatt Embarcadero in San Francisco this weekend, if anyone wants to have some fun). This was the model of the only successful progressive campaign in recent memory. The nurses and firefighters and policemen hounded Arnold Schwarzenegger at every campaign stop in 2005, and destroyed his right-wing initiatives.

If it takes a grassroots strategy, so be it. But without informing voters about this kind of nonsense, and holding them accountable, nothing will get done.

So could you take a minute and call the California Republican Party for me?

916.448.9496

Contact form for the CRP website.

Thanks.

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