Timber! Down Comes Mindless Anti-Tax Ideology

[CNBCs] timber200.jpg

The anti-tax crowd in California always defends its absolute opposition to tax increases as a defense of business.

But taxation is more complicated than that. Some taxes benefit businesses, and sometimes raising them is good for business.

An example is California's new 1% tax on lumber sales. This tax, which passed in August and was signed into law Sept. 11, was sought by the timber industry.

Why? Because California's timber industry had been at a competitive disadvantage.

Regulation of the industry had been funded by fees paid by California firms -- and not by out of state competitors.

A broad tax on timber sales levels the playing field -- and reduces costs by switching funding of regulation from those fees to taxes.

(It also didn't hurt that the bill included provisions limiting how much prosecutors and agencies can recover from the industry when wildfires are caused by the industry's practices).

So who opposed it?

The federal government didn't like the not being able to recover more in the event of industry-related wildfires.

But in addition to that, many Republicans in the legislature opposed it because they didn't want to vote for a tax. Any tax.

Even one supported by industry. One specific objection was that out of state companies with economic impact in California would be hurt.

Let's hope this sort of anti-tax-above-all-else ideology falls as hard as the trees.

Contact Us