California: Revenues for Infrastructure
Revenues for Infrastructure
1.
Repatriation Tax Holiday to
create federal infrastructure bank
2.
Taxing State Oil Production
on non-coastal fields in manner similar to Alaska
3.
Using those funds to pay
for infrastructure and investment in UC system, particularly R&D, STEM and
Project Management
California has benefited
from having one of the strongest economies in the world. Within the past 25 years, our GDP as a State has
exceeded China’s and as a country our State would rival France and Italy in
terms of GDP. There is no question that
California, needs to continue to prioritize its economy to remain competitive
and to be able to underwrite the other social benefits that augment the
unrivaled natural territory of California.
Multi-culturalism is a challenge for California, but with the enactment
of sound policy it becomes a strength that guarantee our geographical territory
and its people’s dominant position in the world for centuries to come. The balance of global power is shifting from
London/New York to Beijing/Los Angeles and by preparing to be the leader of the
Pacific Rim Empire Californians can enjoy a prosperous position as Global
Leaders. Our future success demands
replacing ideology with empiricism and aggressively using the leverage of our
State’s power to negotiate solvent, profitable and prosperous policies that
improve standards of living in a fair and inclusive manner. If Californians can work across partisan
lines and create a solidified voting bloc in Congress and Senate, set a tone of
bi-partisan cooperation, Californians can save the United States of America
with responsible leadership that improves our finances, grows the economy,
creates quality jobs, while improving standards of living. The State of California can raise the
revenues necessary for infrastructure and Universities by coordinating efforts
to pass legislation that would use a Repatriation Tax Holiday to fund and
create a federal infrastructure bank, pass a state oil and gas production tax
to raise state revenues that would be used to pay interest and debts along with
other investments that will improve California.
The Congressional and
Senatorial representatives of California can form a united voting block to push
for a Repatriation Tax holiday that would be used to capitalize a federal
infrastructure bank. With the UC system,
Stanford, USC and other high quality schools producing America’s brightest
minds, California has been a center of innovation, with dot coms often
associated with San Francisco, Software and tech associated with Silicon
Valley, entertainment, media and advertising associated with Los Angeles and
biotech and military tech associated with San Diego. Many of these companies could benefit from a
repatriation tax holiday that would allow these firms to bring money that is
offshores in foreign subsidiaries to the United States. The plan, endorsed by Bill Clinton, the
Metropolitan Policy Program and Brookings would establish “a national
infrastructure bank, initially capitalized at around $25 billion dollars. This appropriation would be directly offset
through the authorization of a one-time tax reduction on repatriated corporate
profits, temporarily decreasing the standard corporate tax rate to
approximately 10 percent, and capped at $500 million dollars per firm.” With $25 billion in capitalization, the bank
could potentially provide $250 billion in lending power that would yield
returns with interest and principal payments from solvent states, counties and
municipalities that would have a “multiplier effect” on the repatriated funds. As the amount in the bank grows, the amount
that could be lent responsibly would also grow providing further gains for the
treasury, our nation’s infrastructure and the work force. While the lending rates would need to
maintain market competitiveness, being regulated and handled by the Federal
Government they can offer a more predictable and affordable lending rate. Legislative provisions offering direct
investment form the Federal Reserve could create additional avenues of growth
with appropriate monitoring for inflation and project management to ensure the
funds provided are translating to needed and completed infrastructure projects. Long-term costs of the expatriation would be offset
and yield a net return of conservatively 9 billion dollars, from the projected
returns of interest rates, increasing returns to the treasury in the near and
long-term with payroll taxes and opened opportunities for investment and
taxable transactions created by the infrastructure projects that would be
funded.[i]
Covering the costs of
borrowing from the Infrastructure bank and paying down debts already on the
books would require California to create new revenues and allocate budgets
strategically to grow future treasury revenues.
The broad-based tax system for the future and other revenue-related
proposals in The Think Long Committee’s “A Blueprint to Renew California” are
going to synchronize synergistically with added revenues created by adopting
Oil and Gas production Taxes similar to Alaska and opening up drilling in all
non-coastal proven oil reserves. The
Think Long Committee outlines a plan to create a positive business environment
for job creation, reduce the personal income tax across the board, fund
education by an additional $5 billion, provide $2.5 billion to California’s
Universities, empower county governments and reduce public safety costs by
providing 1.5 billion in additional funding, provide block grants to California
cities, start paying down the State’s “wall of debt” and stabilizing the
boom-and-bust budget cycle, give Californians real power to make government
accountable, and improve the process for making long-term economic policy. To do this, the committee proposes
empowering local government and regions in a process of devolution, reducing
the sluggish drag of capitol politics and bureaucracy while allowing for the
more responsive and efficient powers of local government. Cities and counties know the infrastructure
projects that need to be prioritized, and this process can help free up funding
to accomplish these projects. Many
Americans do not mind government spending when the dollars are being used
appropriately, the problem is that governments tend to shield themselves from
criticism by using internal mechanisms of oversight that can conceal systemic
problems. The Long Committees proposal
to create a “citizens council for government accountability,” it is an excellent
exercise in democracy that can improve the functionality of our government. The
proposal to create a broad-based tax system for the future, that reduces
personal and corporate income taxes, places sales taxes on services but reduces
sales taxes on goods while reducing personal income tax deductions makes a
tremendous amount of fiscal sense that could gain bi-partisan support. Budget and Oversight, Initiative, K-12
education reform and pension and health benefit reform add value to job
creation, higher education and economic growth.
With an appropriately educated work force and our state’s fiscal house
in order, Californian companies and citizens will be able to prosperously enjoy
the world’s finest infrastructure for decades.[ii]
In this era, Infrastructure means more
than just roads and dams. Modern
Infrastructure also includes information infrastructure and smart energy grids
in addition to traditional utilities, aqueducts and freeways. A savvy tax policy is going to do more than
simply pay for revenues to offset borrowing costs or impose pay as you go
reforms, it is going to generate revenues for a treasury fund that will be
reinvested to create a long-term advantage for Californians in the future’s
economy.
One sure way to boost a lackluster economy is in the
tried and true fields of energy. With
2.98 billion barrels of proven oil reserves[iii]
and estimates as high as 15 billion barrels of recoverable oil[iv],
California has massive oil reserves. Even at today’s low oil prices of around 70
dollars per barrel[v],
there is no less than 210 billion dollars sitting in proven oil reserves and as
much as 1.05 trillion dollars in estimated total oil reserves. The long-term futures on oil are uncertain as
renewable forms of energy continue to advance, but oil prices are currently at a
low, and have been as high as 100 dollars per barrel recently. Most of our vehicles; however, continue to
use gasoline and significant portions of our energy comes from oil and natural
gas, the time to turn proven reserves into cash is now. California’s Government has a responsibility
to run a hard bargain to be sure that our State is getting a fair return for
the exploitation of its resources.
While environmentalists have long prevented the expanse
of Oil Drilling in California, a shifting political climate that is
increasingly economic focused, combined with increasing fuel efficiency and
cleaner means of extraction, conducted with a compromise to phase out all
off-shore drilling could create the votes to open up the vast oil reserves of
the San Joaquin Basin and other major proven fields away from California’s
coast line. By investing a portion of
the generated funds in forest reserves, vulnerable habitat studies and
preservation, environmental interests could be advanced. Portions of the oil revenues could also be
invested in research, development, implementation and regulatory oversight
providing cleaner means of extraction, converting fossil fuels to energy, and
energy efficiency along with investments to increase the competitiveness of
renewable fuel resources. Any bargain
would stipulate a significant number of the jobs created to be provided to
long-time California residents and include state investment in training
programs geared towards preparing this workforce.
Current proposals to tax oil revenues have been too low,
I would recommend looking to Alaska’s Oil and Gas Production Tax as a model for
taxation. Taxing 25% of production
value, and .4% progressive tax added for each additional dollar of production
tax value, with incentives for well exploration and university donations
increased, Alaska’s tax revenues increased by 47%![vi] Long term, such a tax could yield an excess
of $250,000,000,000 for California’s State Treasury. Now, California, with its larger and more diversified
economy may not see the same % increase, but such a bold tax policy in
combination of opening access to proven oil reserves and exploration of future
reserves would substantially boost state revenues. The challenge is in protecting those revenues
from public interest groups and to re-invest them in those programs and people that
will provide a real return for California now and in the future.
With the Legalization of Marijuana in
Washington and Colorado there is a growing data set to look at in considering
whether or not California should move from a medical marijuana approach towards
legalization. Empirically speaking,
legalization, without much surprise is looking more and more to be the better policy. In Colorado they used a 2.9% sales and retail
tax, 10% retail marijuana special sales tax, 15% marijuana excise tax, and
retail/medical marijuana application and license fees to generate over $45.2
million dollars that largely went to counties, but also to state and local
governing entities. In the first four
months of legalization, the City of Denver saw a 5.6% drop in violent crime and
a drop in property crime at around 11.4%.[1]
While there is a need for more in depth
studies it seems that gateway drug theories confuse correlation with causation,
and that making popular activities such as marijuana illegal creates resentment
towards the letter of the Law, and discrimination against marijuana users then
pushes them into economic niches that have been criminalized by a predatory
police, fine and incarcerate business model for government.
Clearly, marijuana
has some medical benefits and is often less dangerous or harmful in terms of
side effects than FDA approved chemical substances. While medical marijuana usage may increase slightly,
with estimates as high as 4%-5%,[2]
by investing portions of tax revenues into preventive education and resources
for treatment, increases in long-term usage could be nominal or even reduced,
while the costs of drug usage on society, such as high incarceration rates and
severe human rights issues relating to exposure, policing and incarceration practices,
could be financially offset as incarceration
and policing costs drop and revenues become available from the taxes on legal
marijuana transactions. Ending the
prohibition against marijuana and allowing for it to be a matter of personal
choice and responsibility fits with notions of higher law that center around
the spirit of liberty. California
already makes more than $100 million dollars from permits, licenses and taxes
on medical marijuana, if our State legalized and taxed all marijuana sales to
individuals whose brains have reached maturity in a manner similar to alcohol,
it would reap even more revenues to invest in our State and our people.
While maintaining our
freeways, highways, roads, bridges, tunnels and dams is necessary, irrigation,
desalination plants, high-speed rail and subways are a high priority, with
taxes from increased oil drilling California can fund a state-wide smart energy
grid and provide high-speed wireless internet free of charge across all
metropolitan areas. These projects would
create jobs, obviously, but also create a foundation for a diversified economy
to thrive. Reducing traffic, increasing
the ease of transit both in terms of people and cargo, but also information and
energy, would provide for impressive sustainable growth that would bolster
California’s leadership edge in future decades.
Fully-capitalizing on the
abundant revenues that can be generated and funds that can be accessed by the
above proposals requires their reinvestment in areas that will create
sustainable and robust economic growth.
One of the largest problems for California is its public elementary,
middle and high-school education programs.
California spends enough on its education and has plenty of good
teachers; however, the education system is challenged by large non-English
speaking demographics and obstacles to replacing bad teachers. By opening up the opportunity for vouchers to
be applied to private educations meeting basic state monitored standards of
curriculum and performance, competitive dynamics would improve performance for
both private and public schools.
Providing a voucher program would increase choices for parents, help
improve revenues for religious organizations and alleviate an over-burdened
public school system by reducing class sizes and providing for greater job
fluidity for teachers. By giving parents
the option of putting their children in a private school in areas where public
schools have a bad reputation, it creates choice which is generally equated
with liberty and puts pressure on poor performing school districts to either
improve or loose.
Faith and religion
provide additional dividends to society and our state, providing more efficient
means of short-term support, more responsive and ethical, personalized help unburdened
by the rigidness of bureaucratic regulations and state protocols, a community
of support centered around the Universal Value of reciprocation, or doing unto
others as you would have done unto you and the fortitude that only faith in a
higher power can offer. In districts
where public schools are overcrowded and poor performing, more ambitious
parents and promising children would be afforded the ability to simply transfer
to a private school, supporting the meritocratic development necessary for a
thriving capitalist system where the workers and owners can both thrive in parallel
to each other, in an upward financial trajectory where role reversals are
common, social status fluid and merit rewarded.
Transforming diversity into strength requires effective
bilingual education alternatives that allow for future generations to have an
advantage in the workplace, go out into the world and pursue financially
favorable contracts for California based businesses and act as diplomats for
our State, while providing for an edge in an increasingly globalized reality. California can develop a core of business
professionals trained to support profitable contracts providing goods and
services to Foreign Markets from California-based companies in a bid to
increase exports. College populations
need to be more closely aligned with the population as it relates to
demographics and there is a real need to improve the link between education and
the job market. California could
graduate more highly qualified students by offering more merit based grants
that cover the costs of education and living expenses, and the federal
government should consider reducing the education costs student loans will
cover but increase the allowable amounts for living expenses to entice more
students to continue academic work. Oil
companies and other areas of enterprise would gladly put money into programs
that produce the skilled workforces they are going to need to maintain sustainable
and valued operations. Every company or
business owner has a vested interest in a healthy and skilled workforce. Doing this affordably and efficiently is key
so that time and financial resources can be freed up for productive work and
profitable monetary activities.
Education and STEM
investments[vii];
however, are not enough, the liberal arts, social sciences and the humanities
continue to create strong citizens while literature and arts help add meaning
to our existence and civilization. The
liberal arts teach us how to think and communicate, providing the necessary
context and skills to be successful in core Science, Technology, Engineering
and Math.[viii]
A successful California requires a cohesive Californian Identity that develops
an ethos of economic liberty, promoting virtues of health, leadership,
entrepreneurship, work ethic, study, creativity, individuality and diversity. Arts and Letters programs can find new value
by honing their crafts and channeling talents to advance these virtues. Philosophically, Realism, needs to be balanced
by optimism, ideals need to be balanced by empiricism, and faith needs to be
balanced by science. Balanced properly,
diversity can become strength and source of resilience when developed under a
multi-cultural pervasive morality of compassion and understanding. The Arts and humanities help create the
social cohesiveness pre-requisite to the flourishing sciences and economies
that facilitate higher standards of living.
In conclusion, the wise investment of funds created by a repatriation
tax holiday, invested into a federal infrastructure bank, augmented by
increasing state revenues from a broad based tax system for the future, and an
oil and gas production tax will bolster the strength of the thriving
civilization centered in California, making California capable of maintaining
its competitive edge as it leads us towards the future. Universities are
centers of innovation, knowledge management, job training, research and
development that can offset under-investment in these areas by
corporations.
A disproportionate number of the wealthy[ix],
venture capital deals (more than 7 times as much in our nearest competitor, New
York)[x],
and many of the most intelligent live in California because they understand the
latent value of the territory and its people.
Our university system is by far the world’s greatest public university
system, and private universities such as Stanford, USC and the Jesuit schools
add a right hook to the left jab of California’s collective brain
strength. The research in academia
carries over to the business sector, and research conducted on colleges become
blueprints for billion dollar companies, high paying jobs and highly valued
products and services that create a snowball effect for the State’s
treasury. Maintaining it, however,
requires creating long-term revenues and short-term investments in
infrastructure, energy, science and the arts.
Largely, legislatures need to prioritize funding programs that recruit
and train a core of administrators, project managers, engineers and workers
capable of responsibly achieving the above mentioned plan.
[1] “Regulated
Marijuana Sales in Colorado creating jobs, tax revenue without increasing
crime.” Marijuana Policy Project. (www.mpp.org)
© 08/28/2014
[2] “Ending
the Drug Wars” Report of the LSE Expert Group on the Economics of Drug
Policy. May 2014
[i]
“Invest But Reform: Establish a National Infrastructure Bank Capitalized by a
Repatriation Tax Holiday” Rubert Puentes, Joseph Kane, and Patrick Sabol. The Brookings Institute.
[ii]
“A Blueprint to Renew California: Report and Recommendations Presented by the
Think Long Committee For California.” Nicolas Berggruen Institute.”
[iii]
“US Crude Oil and Natural Gas Proved Reserves, 2012” Independent Statistics
& Analysis U.S. Energy Information Administration, U.S. Department of
Energy. www.eia.gov/naturalgas/crudeoilreserves/pdf/uscrudeoil.pdf
[iv] “California
could be next oil boom state.” Steve Hargreaves for CNN Money. 01/15/2013 http://money.cnn.com/2013/01/14/news/economy/california-oil-boom/
[v]
Energy & Oil Prices, Crude Oil & Natural Gas, www.bloomberg.com/energy
[vi]
“Oil and Gas Severance Taxes: States Work to Alleviate Fiscal Pressures Amid
the Natural Gas Boom,” Jacquelyn Pless.
National Conference of State Legislatures. February 2012.
[vii] STEM
Integration in K-12 Education Margaret Honey, Greg Pearson, and Heidi
Schweingruber. Committee on STEM Education; National Academy of Engineering;
National Research Council.
[viii]
“The Value of a Liberal Arts Education,” Galan M Janeksela, West Virginia University
Institute of Technology, WV
[ix]
“Where The Rich Live in America: Connecticut, California And Virginia Top the
List” by Abram Brown. Forbes. 02/13/2013
www.forbes.com/sites/abrambrown/2013/02/12/where-the-rich-live-in-america-conneticut-california-and-virginia-top-the-list/
[x]
“Venture Capital Trends by State, Industry” by Kate Taylor (www.entrepreneur.com/article/228709)
1
100,000+ searches
3
100,000+ searches
Rapper Earl Hayes, VH1 star Stephanie Moseley dead in apparent murder-suicideNew York's PIX11 / WPIX-TV
7
50,000+ searches
8
20,000+ searches
Sunday, December 7, 2014
4
100,000+ searches
5
100,000+ searches
7
50,000+ searches
8
50,000+ searches
11
50,000+ searches
12
20,000+ searches
posted by Mi vida en libros @ 5:58 PM
0 Comments
0 Comments:
Post a Comment
Subscribe to Post Comments [Atom]
<< Home