Saturday, June 5, 2010

Rebuttal to Cynthia Kaufman

I was strongly opposed to Cynthia Kaufman as a candidate for the Pacifica School Board in 2008, and her recent letter to the editor merely confirms why I felt she was an inadequate educator and politician.

“In praise of taxes” is nothing more than someone living off the public dole (like a school board official) telling the private sector they need to sacrifice more for her benefit.  In fact, the original Boston Tea Party wasn’t about people’s unwillingness to pay taxes, but rather how those taxes were spent.  If higher taxes truly equaled more services AND a functioning economy with a bounty of jobs, California would not be the poster child of a bloated state sinking under the morass of its financial ineptitude.

The problem with Ms Kaufman’s premise is she assumes businesses (and employees) exist to pay taxes to the state.  Free market competition, however, mandates that states compete against each other to provide incentives for businesses and their employees to remain located in their state. And with the personal income tax providing nearly half of California’s state revenue, it seems ridiculous to suggest that raising taxes - especially during a recession, extended global financial meltdown, and unemployment levels not seen since the Great Depression – will stimulate businesses and their employees to continue paying those higher taxes.

Quite the contrary, raising taxes will cause more businesses and their employees to move to less burdensome states, causing a deeper cut to state revenues, which would apparently lead Ms Kaufman to say “all hail the new higher taxes!”  In fact raising taxes “progressively” on businesses and the wealthy has the opposite effect of raising revenues: they tend to relocate to states that are more business friendly and less burdensome.

Also consider a company’s need to make sound financial decisions to sustain its bottom line.  Raising taxes affects hiring and retaining employees (and thus their contribution to the tax base), the cost of products (higher taxes on companies tends to pass that expense to the consumer with higher prices, so in essence what appears to be a “progressive” tax eventually impacts the consumer on a “regressive” level), and the availability of benefits for the employees.  Some large businesses do suffer from “VPitis” where the upper echelon pocket large bonuses at the expense of their lower wage earners, but consider how these higher taxes will affect the small businesses that form the backbone of an economy.

California already ranks #48 on the 2009 State Business Tax Climate Index (in fact a recent article in CEO Magazine put the state’s business climate below even Puerto Rico!).  Joseph Vranich, on his blog The Business Relocation Coach, cites 129 companies that have recently “disinvested” in California’s hostile business environment since July 2009.  "It's no mystery what causes companies to leave California – high taxes, undue regulation, workers' comp costs, a legal environment stacked against businesses, and lengthy and costly construction permitting requirements," Mr. Vranich says.

A recent article in the Orange County Register about the relocation of 2 companies to Colorado is equally as blunt:  Kyjen Company (maker of toys and other products for dogs) founder Kyle Hansen says, "I realized we were paying more in taxes in California. I would rather invest that money to hire more people."  Kyjen has increased their company from 9 employees to 21 since the move, and guess who is reaping the tax benefits from this expansion?  NOT California.

I don’t expect Ms Kaufman to understand any of this.  Where would she fall in a discussion on Pacifica’s woeful economy, where 3 of the top 4 employers are government entities (her own school district, the city government, and JUHSD)?  Where the city has reaped a sum total of ZERO dollars in permit fees for New Commercial and New Industrial permits from 2004 through 2008?  Ms Kaufman opposed Measure L (development of the quarry) but supported Measure D (the sales tax increase), so it seems in essence she favors higher taxation without the appropriate expansion of growth and business.  With Pacifica constantly teetering on the brink of bankruptcy, would these be sensible solutions?

Here’s some raw numbers perhaps Ms Kaufman can digest:  California’s state spending was $51.4 billion in 1991.  It is currently $144.5 billion and growing, with the ever onerous unfunded pension liabilities of state and municipal employees anywhere between $63 billion and $500 billion.  (Pacifica’s share is $20 million, and even if those bonds DO sell, how does Ms Kaufman propose to pay them back?  Even more taxes!).  Spending has doubled in under 20 years so why is this not enough for California to provide for its infrastructure, its schools, its social programs, and its most adversely affected citizens?  Ms Kaufman’s argument is that the state, while doubling its spending in the last 20 years, has deteriorated in quality.  Has the private sector spending doubled in the last 20 years?  Or more to the point, have private sector salaries and benefits doubled in the last 20 years in California, compared to public sector salaries and benefits?

Well, my advice is not to listen to someone on a California school board for reasonable answers to that question.

Here's a link to her My Turn in Wednesday's Tribune:

Jeffrey W Simons


Lionel Emde said...

I considered writing in reply to Ms. Kaufman's column but since Jeff has kicked it off, why not here?

A. In 1999, our Pacifica Sewer Charge was $475.72 on our property tax bill. That represented less than 13 percent of that year's tax bill.
In 2009, the sewer charge was $1,170.30, representing more than 22 percent of our property tax bill.
This, despite the requisite 2 percent per year increase in rates allowed under Prop 13.
Certainly one could praise this increase as the right direction, if Ms. Kaufman is to be believed.

B. Pacificans pay the highest garbage rates in San Mateo County. This is scheduled to rise 5 percent in August, and another 4 to 8 percent in March 2011. The city takes 11+ percent off the top of the garbage contract.
All hail the rise of taxes on the working class.

C. Pacificans pay a 6.5 percent utility user's tax which has been proposed to be increased on "telecommunications". All of these (gas, electric, telecommunications) are exempt from Proposition 218, and therefore can be imposed without a public right of notification and protest. Praise be to tax increases without public input.

The notion that we aren't paying enough, in the light of pay cuts, job losses, and banksters repossessing houses, is totally absurd. I agree with Ms. Kaufman's advocacy of more taxes on the oil companies, and large corporations in general, but that's not going to get us out of the present situation.

You'd better start looking elsewhere.

Jeffrey W Simons said...

"I agree with Ms. Kaufman's advocacy of more taxes on the oil companies, and large corporations in general, but that's not going to get us out of the present situation."

yeah just look at the battle in Richmond to see how that will play out.

as I pointed out on my blog, here's the crux of Ms Kaufman's argument:

"There is widespread belief in our country that people pay too much in taxes, that the government wastes our money, and that we need to cut government spending. This set of beliefs has taken California to the point of total dysfunction, and it is time for those who disagree with that view to stand up and say proudly and strongly we need to raise taxes."

(yeah, its the belief that government is bloated and wasteful that has led to California's demise, not the actual bloat or waste . . . )

Jeffrey W Simons said...

Here's a link to an editorial by Jason Clemens in the Chronicle

California's tax tactics undermine prosperity"

Which pretty much undermines the ignorance of Ms Kaufman's argument.

"Our high taxes have not solved our fiscal predicament and, indeed, have made it worse by retarding economic growth."

I don't believe that is any more evident than in Pacifica, where the economic plan set forth by the Fearsome Foursome and their cheerleaders like Pete Shoemaker and Cynthia Kaufman have utterly devastated the local economy, with ever increasing taxation and limited economic growth.

J.J. said...

"I agree with Ms. Kaufman's advocacy of more taxes on the oil companies, and large corporations in general..."

Lionel, who do you think ends up paying for those "corporate taxes"?

Markus said...

Jeff pretty much covered all the bases. Ms. Kaufman is yet another bureaucrat out of touch with reality. It is essential for this state to reverse this trend of overtaxing and overburdening businesses, and especially "BIG" business. Businesses not only provide a substantial tax base, but even more importantly, provide jobs for a tax paying work force. Pacifica is a great example of what happens when commercial development is stifled. The residents wind up paying more taxes while spending more in other towns for services they can't get in Pacifica. We need to have a much better tax base balance between residents and business. How much more can the residents endure before we start seing them following businesses leaving Pacifica. Get rid of the 4 do nothing council members and replace them with people using good common and practical sence. Making it easier for business to operate will create more local jobs and more local spending.

Jeffrey W Simons said...


The difference between the Cynthia Kaufmans and the Bernie Madoffs of the world is negligible. Ponzi schemes are Ponzi schemes, and taxing people out of prosperity "for the children" is probably one of the sickest shell games some idealogues want to play.

Lionel Emde said...

"Lionel, who do you think ends up paying for those "corporate taxes"?"

Many of the largest corporations in the US pay little or no corporate income taxes. So of course, you're right: You and I pay the taxes that they are allowed to avoid.

Here's another aspect of corporate tax avoidance sanctioned by law:

And the exaggeration of the month award goes to... said...

"The difference between the Cynthia Kaufmans and the Bernie Madoffs of the world is negligible."

Jeffrey W Simons said...

I'm sorry, how else would you describe this never ending spiral of raising taxes with no return that Cynthia Kaufman favors, if not a Ponzi scheme? The California taxpayers have been taken for billions of dollars, with nothing to show for it. Exaggeration? If anything, at least Bernie Madoff was caught and sentenced to jail for what he did.

Anonymous said...

Ignorance is not knowing the difference between taxes and a Ponzi scheme.

Jeffrey W Simons said...

Ignorance is not knowing the difference between someone robbing you blind, and someone robbing you blind.

Markus said...

Lionel, I agree that some of the largest firms don’t pay their fair share of taxes. However, we must be very cautious not to overburden these large employers, to the point of loosing them to another state or even country. You complain about the rising fees and property taxes levied on Pacifican’s. This is a direct result of our eroded tax base largely due to businesses either leaving Pacifica or unwilling to come here due to our City Council’s notorious anti business and development policies in the past. This is a double edged sword. We must elect the kind of people that are not influenced by either side, and strive to gain a fair balance for our tax base. I would be curious to know what percentage of Pacifica’s work force actually work in Pacifica.

Markus said...

Jeff, you took the words right out of my mouth.

Steve Sinai said...

Regarding percentage of Pacificans who commute, I got the following from the link below -

Daytime population change due to commuting: -15,740 (-41.0%)
Workers who live and work in this city: 2,747 (13.2%)

Pacifica Statistics

Jeffrey W Simons said...

(Markus, shhhhhhhh don't tell the screaming frog and snake lovers, but more jobs in Pacifica are also better for the environment and significantly reduce carbon emissions far more than a 100 biodiesel plants ever would. I tried to tell Nancy Hall this, but she picked up her guitar and sung a sad song about how jobs kill hope while taxes are the fuel the unicorns use to create the future.)

Markus said...

Thanks, Steve. Just like I guessed. Very low percentage of our work force works here. No large employers in this little town. Oh well, at least the oil companies appreciate Pacificans spending all that gas cash on commuting. Ya, Jeff, the problems of tons of toxic carbon emissions during commute hours is conveniently ignored by the extreme environmentalists. They are very selective in choosing battles. Restore Sharp Park, is a great example. Who cares that restoration will mean the elimination of both RL Frogs and SF Garter snakes from the area. But, they figure they can win this battle. As far as doing something to alleviate the rush hour commute, many of them are saying, WHAT COMMUTE? Really sad, but at least they do provide some comic relief.

Lionel Emde said...

"I agree that some of the largest firms don’t pay their fair share of taxes. However, we must be very cautious not to overburden these large employers, to the point of loosing them to another state or even country."

Multi-national corporations don't worry about which country they operate in--it's all the same as long as they have the freedom to move their money in or out. That's why the USA is becoming a third-world status nation.

My point is that the lower classes - read you and me - are paying an ever-increasing share of the tax burden and the other end of the spectrum laughs all the way to the bank. Ms. Kaufman has that point totally correct in her column.

Anonymous said...

Jeff -- why don't you worry about Texas instead -- now that you live there? That state has plenty of problems. Seems that should keep you busy enough.

Kathy Meeh said...

Anonymous, big thank you to Jeffrey for adding to the intelligent dialog on this blog, and for his detailed memory which is better than most of us who live in Pacifica where there is also much to "worry about". And, you have something to add to the "no growth" more taxes paid by property owners (they won't miss the change) equation?

Anonymous said...

It would be great if mr simons actually worked to do something positive rather than just taking pot shots at others. Get off your wife's "doll" mr simons oh yeah you wouldn't have time to write your endless complaints. I may not agree with Dr. Kaufman, but at least she state her opinion and works to make it happen rather than sitting in the cheap seats and making personal attacks. Oh and when you rage about your hurt from this attack just think about what you have said about others. Debate is great but personal attacks cheapen us all

translation... said...

It's better to be unemployed and angry than it is to get a job or bother to vote.

Kathy Meeh said...

Jeff, question: you mentioned that "3 of the top 4 employers" in Pacifica are government. Could you re-name these please.

Kathy Meeh said...

Thanks Jeff. Let's see: #1) Pacifica School District and #4) Jefferson Union High School District-- produce jobs, probably not much tax revenue. #2) City of Pacifica, probably not much tax revenue. #3) Safeway, most groceries are not taxed, other miscellaneous items are. It appears that the big winner in this top category is Safeway selling miscellaneous items, unless I missed something.

You know how this city council loves it "open space", a few weeks back Horace Hinshaw went to city council and spoke about the city making money from setting-in city infrastructure (mostly from grants) to produce champion quality fields for tournament level contests, which could also improve hotel, restaurant and other tax revenue producing business.

Some times city council likes to comment at the end of these citizen speeches. No comment, even that suggestion fell on deaf ears. City council = the economic dead letter box.

Jesse Pinkman said...

The #1 top industry in Pacifica:

meth labs

Sammy the Socialist said...

We just need to find a way to tax the drug industry in Pacifica.

Kathy Meeh said...

Jeff, if Vreeland supported a "state of the art" sports complex that would likely be in the privately owned quarry, where in any other city the quarry and Mori Point would otherwise be a center of town. This city is so messed-over thanks to this controlling city council and their "nothing for Pacifica" friends who support their confusion and charade.

Jesse, I was going to comment for fun "is there a tax for that?", but Sammy made this issue politically polarized again, so forget that. It seems Sammy likes to continue to profile groups of people, without justification or conclusive data. Well, that's just funny 'ol Sammy.

Jim Alex said...

Sports Complex

Talk and rumor said Oddstad School. The part that is on the corner of Oddstad and Yosemite Drive.

Jeffrey W Simons said...


I think the school was pushing for that site, but Vreeland knows better. Look at all he has done for Pacifica. Look at what it was before he got elected and what it is today.

Lionel Emde said...

I wish that a magic solution were there for our benighted city council to grab onto but it isn't there that I can see. How folks could still think that we can build our way out of a real estate crash defies logic. Try to sell your house right now and find out how bad the market is.

I have plenty of problems with the way our town's being run but the larger problem of corporate tax avoidance combined with out-of-control state government spending defies a solution.

The system be broken.

Kathy Meeh said...

Lionel, no memory of how we could have grown our city out of poverty and marginalism ? The recession didn't start here within the past few years, it definitely has been enhanced during the tenure of the existing city council. Tribune today, now property owners are expected to repair their streets. What next?

Scotty said...

Lionel, I'm curious as to which local corporate taxes you are referring to as being avoided? Did Disney attempt to build an amusement park in the quarry, and I just missed it in the local news?

Do you really think that the current "death by a thousand cuts" that is inflicted upon any business trying to establish itself in Pacifica is the best way to build a tax base?

Joe Lewis said...

Seriously this lady is dangerous. With her stupid comment about the pro development people killing Jim Vreeland, the "gang of no" stooped to a new low!

Anonymous said...

Cynthia Kaufman is responsible for ushering in the most destructive era in Pacifica politics since the bad old days of Vreeland, Lancelle, deJarnutt and Digre. Her manipulation and perversion of our free election process enabled the installation of the illegitimate candidate, Deirdre Martin. Stealing this council seat has changed the majority 3-2 vote to favor the will of the faux-enviro NOBY elite. Since her swearing in we continue to lose most of the best city leaders and staff we have ever had, the library was killed, Palmetto business district improvements are stalled and Beach Blvd site improvements have evaporated. Property values are falling thanks to a toxic amalgamation of amateur efforts to impose punitive Rent Control rather than increasing housing stock, the institutionalization of a permanent traffic jamb on Highway One, promoting unscientific and exaggerated fear of sea level rise to prohibit development any where deemed to be at risk by non-experts and of course the continuous promulgation of Pacificas reputation as a city extremely hostile to investment and development.
Thanks for nothing Dr. Kaufman, may you choke on your puffed up importance.

Anonymous said...

The Yessirs are you blame. They all know everything yet none of them will get off their asses and run. They would rather sit around and think they are huge deal makers behind the scene. The "gang of no" own Pacifica, they gave for over 35 years.