Just because you’re paranoid, the old saying goes, doesn’t mean they aren’t after you.
California’s liberal politicians have been paranoid, often ridiculously so, about what’s been happening in Washington of late.
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Nevertheless, two events last week bolster the notion that California is being targeted by the Trump administration, a Republican Congress and even the conservative-dominated U.S. Supreme Court.
The first was a rollout of a Republican plan, backed by the White House, to overhaul the federal tax system.
A key provision would eliminate many income tax deductions, including one that would hit California and other high-taxing blue states especially hard.
Eliminating the federal deduction for state and local taxes would make the high income and property taxes in California and other states, such as New York and New Jersey, more painful to upper-income residents who itemize deductions.
It’s estimated that more than 6 million California taxpayers claim state and local tax deductions on their federal returns. They total $112.5 billion a year, or nearly 20 percent of all such deductions nationwide, and save Californians something north of $30 billion a year.
Theoretically, California’s liberal politicians should celebrate such a move since they complain endlessly about the privileges of the affluent. But the wealthiest California communities also tend to be its most politically liberal – think Beverly Hills, Malibu, San Francisco and Marin County. So those politicians’ constituents would take the biggest hits.
Moreover, making state income and local property taxes nondeductible would make those who pay them less likely to support high levels of taxation since they would be unable to shift some of their tax burdens to Uncle Sam.
For all of those reasons, California’s Democratic politicians are unhappy about the proposed tax overhaul, believing that it’s retaliation on California and other blue states.
A day later, the U.S. Supreme Court announced, unsurprisingly, it would hear a case that likely will be a severe financial blow to public employee unions, which in California are the main source of financing and other support for the Democratic Party.
The court was on the verge last year of declaring that unions cannot compel workers, even those who refuse to become members, to pay dues, when Justice Antonin Scalia died. The case, involving a teacher and the California Teachers Association, died with him because his death left a 4-4 tie on the issue.
However, the court is taking up a new case out of Illinois with the same issue, and with Scalia’s equally conservative successor, Neil Gorsuch, now wearing the robes, there’s little doubt that by a 5-4 majority, mandatory dues collection will be outlawed sometime next year.
Based on what happened in other states when compulsory dues were dropped, union leaders fear that invalidating California’s law requiring dues payment by non-members will entice many current members to drop out and thus save the sometimes hefty payments they must make to union coffers.
If it happens, the ability of California’s unions, such as the CTA, to pour massive amounts of money into local, statewide and legislative contests and ballot measures would be curtailed.
The fear was underscored this year when legislators and Gov. Jerry Brown passed, at the behest of unions, legislation that prohibits organizations other than unions from accessing contact information on public workers. Union leaders feared that “right-to-work” organizations that sponsor the dues lawsuits could use the contact data to urge workers to resign from the unions.
That probably would qualify as paranoia.