This story was reported for San Diego News Network on April 10, 2009.
The Southern California Tax Revolt Coalition will host its second protest against President Obama’s tax plan and California’s recently passed state budget.
SCRTC is planning the tea party event because the Founding Fathers intended for taxes to be low, the group’s co-founder Leslie Eastman said.
Group member Sarah Bond said that liberty is at risk under President Obama’s economic stimulus plan and the recently passed California budget.
“Capitalism is the only economic structure that promotes liberty and freedom,” Bond said. “Capitalism is under attack from a socialistic government expansion through needless tax increases and reckless spending. I am demonstrating to protect capitalism, so that my children have the same opportunities and freedoms that I have had.”
The protest is the group’s way of letting politicians know that they are being watched and they’ll be held “accountable,” Eastman said.
On the other side of the fence, ACORN will host a demonstration in support of Obama’s stimulus plan.
“ACORN is helping organize dozens of rallies on April 15 in support of the priorities outlined in President Obama’s first budget — investments in education, health care and getting Americans back to work,” spokesman Brian Kettering said.
Eastman said their last tea party in February drew about 500 attendees with more expected for the second round.
Major change among politicians isn’t likely to happen, SDSU political science professor Brian Adams predicted.
“I don’t think it [protests] will be that effective,” Adams said. “Politicians know that people don’t like taxes but they also know that people need and want services and this is the outcome. But, as a whole, are we more taxed now? No, we’re not.”
Federal tax revenue in 2007 was $2.6 trillion while expenditures were $2.7 trillion, according to the latest budget figures. In the 1984 fiscal year, revenue was $666.5 billion with $851 billion in expenditures. Further data (see chart) shows that total taxes of all levels have remained constant in the past 35 years. The U.S. also has one of the lowest tax revenues among advanced-industrial-countries at 34.5 percent in 2007, slightly more than Switzerland at 34.2 percent, Japan at 33.4 percent and Slovak Republic at 32.7 percent, Organization for Economic Cooperation and Development figures show.
From the 1960s to 1988, the individual federal income tax rate fell by 18 percent and increased again by 39.6 percent in 1993. During the Bush Administration, it fell by 35 percent in 2003. In addition, a corporate income tax of GDP was 3.5 to 4 percent in the 1960s and fell to 2 percent in the early 2000s, according to a study by Paris School of Economics professor Thomas Piketty School of Economics and UC Berkeley economics professor Emmanuel Saez.
Obama’s agenda includes tax cuts for low- and middle-income seniors and homeowners among others, eliminating capital gains taxes for small businesses and cutting corporate taxes. The Obama administration promises 95 percent of workers and their families would see their taxes reduced under the White House plan.
On the state level, California sales tax increased by 1 percent on April 1. In addition, most vehicle license fees in the state will nearly double in May. And by the end of the year, Sacramento will be taking more from people’s paychecks than ever before, boosting the personal income tax rate by 0.25 percent. Tax filers also will be able to claim less on a dependent care credit – to the federal level of $99 instead of $300.Some of the new taxes would last until 2013 if voters approve the spending cap measure in May.
The tax hikes will disproportionately hurt working-class earners, the California Budget Project estimates. A couple with $40,000 in taxable income will pay 12.9 percent more in taxes, while a couple making $750,000 would get a 2.9 percent increase.
SCTRC’s Tea Party will take place Saturday at the Spanish Landing from 11 a.m. to noon. On Wednesday, the group will protest at the Sports Arena, El Cajon and Carmel Mountain post offices. A protest is also planned outside of House Speaker Nancy Pelosi’s San Francisco office, Eastman said.
Although the tea parties may be a revival of a poignant time in U.S. history, taxes and protests about taxes are nothing new.
“The U.S. was founded on an anti-tax ideology,” San Diego State University political science professor Ron King said. “Everyone is in favor of spending less but for what? That’s a political question.”
King said that 20 percent of the federal budget goes to military services while another large percentage goes to national parks and energy.
“This can either mean, we’re doing things exactly right or doing things poorly,” King said.
Associated Press contributed to this report. Hoa Quach is the political editor for the San Diego News Network.