By Peter Phillips
Empire Report
posted July 5, 2009
Is California’s budget crisis a consequence of the recession? Are such analyses short-sighted? Or worse? According to this commentary, they’re part of a trend going back to 1993, during which wages and unions have been undermined to protect corporate profits.
California State Budget Crisis Not Caused by the Recession
What is the cause of California’s budget crisis?
The budget crisis in California has been artificially created by cutting taxes on the wealthiest people and corporations. The current “crisis” is a shock and awe process designed to undermine wages and unions in the state and force labor concessions to protect corporate profits.
According to the “California Budget Project“http://www.cbp.org/, tax cuts enacted in California since 1993 cost the state $11.3 billion dollars annually. Had the state continued taxing corporations and the wealthy at rates equal to those fifteen years ago we would not have a budget crisis today.
Half of all state revenue comes from personal income taxes paid by working people, and another third comes from sales and use taxes. The result is that as a percent of income, taxes hit the lower paid workers the hardest. Corporations only pay for about 1/10th of the state budget. The rest of us are bailing out the rich by accepting massive budget cuts at a time when less spending will only exacerbate the economic situation.
Unions and working people need to say no to massive state budget cuts, and fight for every service and job possible.
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