July 06, 2001

Commentary

Chismes de Mi Gallinero *:

Trying to Figure Out What a Quarter-Penny Tax Means

By Julio C. Calderón

Math and I have been mortal enemies since childhood. This is why I lean toward writing instead of accounting. And I believe that our representatives in government count on my ignorance of math by arguing tax issues in fractions. Really, what does a quarter of a penny mean to most of us?

I started out multiplying at .25 until a friend, who is chief of staff to an Assembly member, corrected me — it's .0025. This number is so small. Just like I am not used to figuring out our household budget in the billions, numbers this small are meaningless, too.

Trying to figure out the last six months in Sacramento, the capitol of the fifth largest economy of the world, has also been mind boggling. The wordsmiths and spinmiesters have been doing their best work confusing the public. They are like cats trying to cover their mess on pavement.

I am still trying to find logic in their separation of taxpayers and ratepayers. Gov. Gray Davis has spent the state's taxpayer's surplus on energy, and has borrowed billions more, and in August will sell bonds for still more billions, adding debt to the taxpayers — but argues that the debt will be paid by the ratepayers over the next 10 to 20 years. O.K. — but my wife just sent the electricity bill and our pay stubs accounted for the taxes taken out of our pay.

I am a taxpayer and a ratepayer. The only difference that I see in this debate is that it brings non-tax payers — those on welfare, retired and people on fixed incomes into the mix as ratepayers.

So what does this have to do with a quarter-penny tax hike? It means that the total sales tax goes from .0775 to .08 on most things we buy. On luxury items, like gas for our cars, the tax goes from 18 cents a gallon to 18.25. Still doesn't sound like much of an impact on our budget, but I am not on a fixed income. My wife drives a Mazda Prelude and fills its tank on average five or six times a month, and takes 12 gallons each time. The state tax, as it is now, on a tankfull for her is $10.80. Another $11 or so goes to the federal tax on the gallon. I will not try to itemize the taxes I pay to keep my Dodge Dakota Quadcab and it's Magnum-V8 running.

Both cars are relatively new gas efficient vehicles — at least as gas efficient as a truck can be these days.

Still, I have to think about the working poor of our state and what they must be paying for their gas. They, for the most part, drive older cars that use a lot more gas. They drive further to find work. This is especially true of farm workers.

We have been hearing a lot from our leaders that they want to punish the energy suppliers. The have suggested a surtax on their profits. I don't know of any tax on business that we as consumers don't end up paying for in the end.

Perhaps my thinking is too basic and I am not getting a clear picture. But among the largest users of electricity are farms, machine shops and manufacturing plants. Some work three shifts. Now, if I owned one and my energy costs had just tripled, the only way to save money is to shut down a shift. And that, in my thinking, puts people out of work.

I really believe the energy guys blew it. O.K., they got greedy. It's like the story about boiling a live frog. If you put it in boiling water it will react immediately and jump out. But if the water is cold, it will sit there as you raise the heat slowly. They turned up the prices too quick.

The problem Legislators have is that they are caught in the middle. The voters are up in arms, but how to they appease the voters and keep the energy suppliers from cutting off their campaign funds?

The energy suppliers already know they have a problem with consumers. Gov. Davis' spinmiesters have successfully painted them as highway robbers. Have you noticed that recently the price of power and gas have dropped slightly. That's turning down the heat. And why not? Mr. Davis has already committed the state to paying the higher prices for the next 10 to 20 years.

Like I said, my math is kind of hazy at best, but my wife, who is good at math and does the family budgeting, tells me we are close to giving serious consideration to bankruptcy. She is looking at the increases in energy and gas bills. She is also seeing the increase in products at the market coming from our rich farmlands. We have comfortable salaries. Still, I can't help but wonder about the mother on welfare; the farm worker family, or our seniors and how they are making choices between what they need and what they can go without, just to keep the lights on.

What the heck…they can always turn off the refrigerator — it's probably empty anyway. The kids can drink powdered milk and most seniors are lactose intolerant. These are the `rate payers' that Gov. Davis and the Legislators are talking about — the ones that will reimburse the taxpayers for the state's venture in the energy business as a broker and distributor.

* A gallinero is a chicken coop. I have one with a rooster and three chickens. So I don't know the price of eggs these days. Unlike my chickens that get a good night's sleep, commercial eggers work a round the clock under lights.

Julio Calderon is founding member the of the Mexican American Political Association and a frequent writer on Mexican American politics.

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