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Republicans Attack Proposal to.. Cut Taxes?

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It's come to this for California Republicans: they're condemning tax cuts.

That was the strange scene recently as the California GOP released a statement condemning reports about the tax reform proposals of the Think Long Committee -- a group of high-profile California civic leaders convened and funded by the billionaire Nicolas Berggruen.

The report claimed that Think Long's proposal would represent "Massive Tax Increases."

In fact, the GOP's statement linked to one of several newspaper previews of the proposal -- all of which reported that the proposal was actually a mix of tax cuts and a new tax on services.

Income taxes would be cut -- significantly -- for the overwhelming majority of California taxpayers, while some exemptions and tax breaks would be eliminated. (The rate paid by your blogger and his lovely wife would go from over 9 percent to 7.5 percent in the plan). The corporation tax also would be cut.

So what's the "massive" increase?

The GOP complaint was that the proposal, by increasing state revenues and by imposing a tax on services (which are currently exempt from the sale tax), was a massive tax increase.

Well, maybe not a massive tax increase now -- but it could become one later. The logic: since a tax on services was a new kind of tax, it would one day be raised and thus it had to be stopped now.

While we bloggers are professionally obligated to rush to judgment, the GOP would be wise to take a chill pill and study the proposal.

Republicans elsewhere seem to know that tax reforms involve both tax cuts and some tax increases. (President Reagan's 1986 tax bill was one such reform).

More recently, Herman Cain soared to the top of the presidential polls with a proposal that operated on similar let's-cut-some-taxes-and-raise-others logic -- cuts in income and corporate rates, while launching a new national sales tax.

And the devil is in the details. In evaluating the Think Long proposal, it's important not merely to figure out how the pieces of the tax proposal will work together -- but how the tax proposal might work together -- or might not work together -- with other budget and political reforms that are part of the package.

It is precisely this kind of big-picture evaluation -- looking at the whole structure of a proposal, instead of just the pieces -- that doesn't happen in California.

The GOP, by picking at one piece of the proposal prematurely and out of context, reveals itself to be part of the problem.

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