California is one of the highest taxed states in the union, and we have very little to show for it. We have crumbling and inadequate infrastructure. Our roads seem to never get repaired yet Sacramento keeps raising our gas and car tax saying they need more money.
California is also one of the largest agricultural states in the nation and produces fruits and vegetables that not only benefits the entire country but the world. Yet, politicians in Sacramento are singlehandedly destroying a multi-billion dollar industry that we depend on by not building adequate water reservoir systems.
We have an unfunded pension crisis in California that desperately needs to be fixed. Because of unrealistic promises, lavish pensions, and incompetent investments based on ideological reasons instead of sound fiscal policy we will see a pension crisis that will most certainly bankrupt the state.
We have a housing crisis, and we are in desperate need of affordable housing. Yet, Sacramento puts so many regulations that the cost of a new home build costs about 40% more due to government regulations.
California is a mess and Californians on both sides of the political aisle want a change. Some want CalExit. A move to secede from the United States and become a separate nation. Others want to split the state into three smaller states; Northern California, Southern California, and California, or create a new state called “New California.” These proposals illustrate the frustration of Californians, but these proposals will do little if anything, and thus will further Californians’ frustration.
My solution to the problem begins with a plan I call Trickle-up-taxation.
Trickle-up-taxation is about building a community, not a bureaucracy. It’s about protecting our fundamental rights, while at the same time allowing people to shape their towns and communities in a way which would best serve the people. It’s about freedom.
People want local control, but they are not sure how we can move from the dysfunction and division we currently see ourselves in, to actual freedom and local control.
The beginnings of an answer may lie in fundamentally restructuring our tax system and implementing a new form of taxation called trickle-up-taxation.
Currently, the majority of all state taxes go to Sacramento, and then to our local municipalities. Even though most of us don’t live in Sacramento, our money flows up first to those centers of government, and then they trickle back down to our communities. This form of taxation has resulted in higher taxes, government waste, corruption, fewer freedoms, and less representation.
Therefore, instead of the current form of taxation, which I call, trickle-down-taxation we reverse the flow of taxation and implement trickle-up-taxation. Rather than paying state taxes, we would only pay county and city taxes.
How it works
So here is how it works. Let us say my local city and county tax me at a combined rate of 10% income tax rate. The state government wouldn’t tax me personally but in a sense would tax my city and county. If I make $100,000 a year that would mean I would pay $10,000 in taxes. The state government may take 30%. Meaning from my $10,000 my local city and county would keep $7,000, and the state government would get $3,000. (Percentage and no deductions are only for illustrative purposes only, deductions would still exist. Q&A Section covers this).
This form of taxation wouldn’t just apply to personal income taxes. There are taxes like property taxes (Prop. 13 protection will remain), sales taxes, gasoline taxes, transient occupancy taxes, business license taxes, and so forth. The state wouldn’t take a bulk of these taxes and then trickle the taxes down to the local municipalities. They would just take a percentage of tax dollars generated.
You see, what I’m advocating with trickle-up-taxation is a way to achieve authentic local control. California has 58 counties and 482 municipalities, yet 70% of state employees work in the Sacramento region. It is impossible for politicians and the state government to govern so many municipalities effectively, especially when they are so far removed from your community.
The state government duties should be to establish the general blueprint for the state, yet implementation would be done locally to allow local communities greater flexibility to meet the unique demands of their local community. (FYI: Before our current overbearing centralized system we have today, the state had limited responsibilities for programs and narrow tax authority. Counties were the most prominent level of government and they had the greatest budgetary responsibility and revenue streams – Source CA Controller’s Office).
Why change the tax system?
The question you may be asking is, why do we have to change the flow of taxation to achieve this? The reason is simple to understand. It doesn’t matter whether you live in a progressive or conservative area, when your state legislator comes to you and says that they need 40% instead of 30%, what will be at stake? Less money locally for your progressive or conservative policies.
“You mean to tell me, my state senator wants more money, and we can’t afford to provide after school programs for our children? Replace him; he is trying to destroy our progressive utopia.”
“My state assemblymember wants more money for corporate bailouts? Fire her.”
If more taxes are needed for the state government, it will be for a purpose that a vast majority of Californians agree with. Thus, it will help limit corruption, reduce waste, and also limit partisanism because most of the money and decisions will be decentralized to the local level.
The benefit of trickle-up-taxation is whether you want to live in a progressive city and county like San Francisco which might want to keep a top marginal tax rate of 13.3% and provide you with extensive social programs like free college and community health centers, or Placer County with an income tax rate of 0% and fewer social programs, the beauty of trickle-up-taxation is that you can pick the community which most aligns with your political views and wants. Shouldn’t the community you live in best fit your needs and wants? Isn’t this what the people want, true local control?
Trickle-up-taxation isn’t about progressive or conservative policies. It’s about creating a genuinely representative government; where the day-to-day decisions that affect our community are decided at the local level. While still maintaining state and federal governments to regulate commerce, establish laws, courts, as well as protecting our fundamental human rights.
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JD Rucker – EIC