Given the sad state of affairs in the once Golden State, California Republicans ought to be competitive, but the party is rehashing old ideas and not offering voters a new message to counter the failed, self-serving policies of the increasingly radical, Progressive Left that now dominates the Democratic Party and politics in California.
There really is no two-party system in California. There is only the Democratic Party, and that party has become the tool of teachers unions and other public-employee unions. Environmentalists and trial lawyers are also part of the Democratic coalition.
Still, California Republicans ought to put out the welcome mat to every state resident, regardless of that resident’s race, color, or creed. If the party needs to define itself in one word, that word ought to be “opportunity.”
California’s official rate of unemployment is a staggering 8.3%, giving California Republicans an opportunity to focus on job creation. That official unemployment rate of 8.3% does not cover the real rate of unemployment, which is probably closer to 20%. The official rate of unemployment does not count people who are out of work and have given up looking for jobs.
Only four states have a rate of unemployment higher than California’s. These states are Michigan, Illinois, Nevada, and Rhode Island.
Nationally, the rate of unemployment is 6.6%. Again, the real rate of national unemployment is probably closer to 15% or 20%.
A revived Republican Party ought to focus on one thing: reform of existing institutions.
Here are four reforms that could reinvigorate the California Republican Party.
First, reduce or eliminate the corporate income tax. California’s corporate income-tax rate is 8.84%. (See the Web site of the Federation of Tax Administrators.) This rate of 8.84% is the nation’s seventh highest. The only states with a higher corporate income-tax rate are Alaska, Illinois, Minnesota, New Jersey, Pennsylvania, and Rhode Island.
Texas has no corporate income tax but does impose a business tax of about 1% (or less) on firms with over $1 million in annual sales.
With a lower corporate income tax, California will become a place where firms and individuals want to invest. More investment means more farms and factories and, hence, more jobs.
California has to be competitive with Texas. If California becomes a sort of tax haven, Texas will not be poaching on so many California firms.
Second, cut California’s personal-income tax and sales tax. California’s top personal-income tax bracket is 13.3%, the highest top bracket in the nation. The Golden State also has the nation’s highest gasoline tax and sales tax. Cutting income taxes and the sales tax will put more money in people’s pockets. Government will have less. Individuals are better at deciding what to do with their money than government is.
By giving people more of their own money, investment will increase and so will personal consumption. With a low corporate income tax, Californians will be able to invest in businesses — new or existing — in their own state. Again, the result will be more jobs.
Third, end the public-school monopoly. Like retail businesses, schools should compete for customers. Locally, if Campolindo High School in Moraga is doing a better job than Acalanes High School in Lafayette, parents should have the option of enrolling their children at Campolindo. If Acalanes starts losing students, Acalanes will have to do a better job.
Private and religious schools should also be part of the equation. For parents who pick a private or religious school, their property taxes should be reduced or eliminated because the public-school system will not have any obligation to provide instruction for pupils attending private or religious schools.
In education, the time has come to bring about apprenticeship programs to provide individuals with needed skills. College is not for everyone. A company like BMW, which has a plant in South Carolina, ought to set up its own academy to train future BMW workers. The academy could operate on a tuition-free basis as long as the academy’s graduates worked for BMW for a stipulated number of years.
Countries like Germany operate very successful apprenticeship programs. And Germany exports more merchandise than any other country — more than Saudi Arabia, Russia, China, or Japan. Germany may not have the lowest prices on everything, but the quality of German merchandise is so good, that buyers are willing to pay a premium for German products.
Fourth, eliminate these huge regional — and unelected — government bureaucracies which act like royalty. Especially harmful are the Metropolitan Transportation Commission (MTC) and the Association of Bay Area Governments (ABAG). MTC and ABAG, in July 2013, adopted Plan Bay Area, a scheme to move people out of their homes and into high-rise, high-density apartments. Individuals, not government, ought to decide where they want to live.
MTC is particularly egregious. It collects money from gasoline taxes. Rather than spend that money on road repair in local communities, MTC wants to engage in social engineering such as the construction of high-rise, high-density housing (often called stack-and-pack housing). Individuals are better at deciding where to live than unelected bureaucrats.
The California Republican Party ought to embrace the reforms mentioned above. And the party ought to stop talking about personal behavior. Personal behavior should be left to individuals, not government. Also, it’s time to leave religious beliefs to individuals. There is no need for theocracy.
There are other reforms that can be added to the four reforms mentioned above. These reforms — in such areas as health care, international trade, and immigration — can be outlined in a future column.
In the meantime, implementing the four reforms covered here should help bring prosperity back to California. And, who knows, maybe more Republicans will get elected.