Taxable Talk

Lurching its' way through the Legislature is SB757, introduced by Christine Kehoe (D-San Diego). The bill has an innocuous title, "The Oil Conservation, Efficiency, and Alternative Fuels Act." It is an efficient bill—if passed, this analysis indicates that 80,000 jobs would leave California. Luckily, the Governator is likely to veto this legislation.

As the analysis (an article in the San Jose Business Journal) notes, just a few years ago a similar piece of legislation passed the Legislature. The one difference between the two bills is that the prior bill required a study. Both want a 15% reduction in fuel consumption. The study showed that any of the following could cause such a reduction:

- A $0.50/gallon increase in the gasoline tax
- Pay at the pump auto insurance, at $0.48/gallon
- A $0.02/mile driven tax
- A $3500/purchase tax on SUVs, mini-vans, and trucks

The bill is about to reach the Senate floor. If you're a Californian, tell your State Senator how you feel about the bill. Indeed, a look at the analysis provided by the Office of Senate Floor Analysis, including the list of supporting organizations (8), and the list of organizations in opposition (22), show that the usual suspects (Sierra Club, etc.) support the bill while business, agricultural, and taxpayer groups are against the bill.

According to published reports, several Senators plan on introducing legislation to repeal the AMT (Alternative Minimum Tax). While every tax preparer I know would jump for joy if this happens, the chances are about the same as it snowing tomorrow here in Irvine. The problem: Eliminating the AMT would cost the US Treasury about $600 Billion.

Oh, it could be made revenue neutral—just increase some other taxes. Oh yeah, that's really going to happen.

Before I say that it won't happen, I should point out that the bill does have bi-partisan support. Still, I think the snowballs win here.