Remember when California had a $95 billion surplus? That would have been the time to increase the payments to reduce our UI debt.

At your request: This week's California Commentary by Jon Coupal
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** California Commentary
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Tune in to the Howard Jarvis radio show tonight at 8 pm on www.KABC.com ([link removed]) or 790 KABC radio in the greater Los Angeles area, or catch the show as a podcast anytime at the link below. Here's HJTA President Jon Coupal's weekly column:


** Gov. Newsom’s Orwellian plan to penalize the oil companies
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By Jon Coupal

The 1970s were a long time ago. It might be hard to imagine, or remember, what it was like back then. So, I’ll paint you a picture: Inflation was skyrocketing, costs were soaring, Iran was in turmoil and the United States was in proxy war with Russia over the latter’s invasion of a neighboring nation.

Now that I think about it, I guess it isn’t so hard to imagine. The 2020s have a lot in common with the 1970s. So, here’s another blast from the Disco-laden past that’s apparently making a comeback: Price controls.

The state Legislature reconvened last week for the 2023-2024 session. It also convened a special session to go after oil and gas companies for what the governor calls “price gouging.” The special session only lasted about three minutes, the members voted to reconvene it in January where it will apparently run “concurrently” with the regular session (proving it to be the election stunt we knew it was), but it did give Gov. Gavin Newsom the cover to introduce his proposal to the Legislature.

The governor’s proposal would impose a “maximum gross gasoline refining margin” of a yet-to-be-determined number of cents per gallon. If a refiner exceeds the margin, the California Energy Commission can impose a civil penalty that will be deposited into the “Price Gouging Penalty Fund” that will supposedly refund the money back to consumers.

There are a lot of issues with this proposal, the first of which is that price controls simply don’t work. It’s basic economics. As David R. Henderson, a research fellow with the Hoover Institution, wrote just this year, “prices are an indicator of underlying economic phenomena, namely supply and demand.”

Without price balancing supply and demand, buyers will demand more than they did at the free-market price and sellers will supply less. But we don’t need an economist to tell us that, the 1970s proved it. Price controls led to shortages and rationing, a greater dependence on foreign oil and, ironically, higher prices.

There is also a question of whether this “civil penalty” is, in fact, a tax. When Newsom first introduced the idea in October, he referred to his proposal several times as a “windfall tax.” But somewhere between then and when he unveiled his proposal last week, his tax had become a “penalty.” The reason for this is clear: thanks to Proposition 13, any tax increase must be approved by two-thirds of the Legislature.

To read the entire column, please click her ([link removed]) e ([link removed]) .

Click here to listen to this week's Howard Jarvis Podcast, "I Think I Shall Never See A Tax As Ugly As A Fee." ([link removed]) The Howard Jarvis Podcast features HJTA President Jon Coupal and VP of Communications Susan Shelley with a lively conversation that takes you inside California government in a way that's fun, interesting and sometimes scary. Check out all the recent podcasts by clicking here: [link removed]
A note to our valued members and supporters: To increase the reach of our message to as many Californians as possible, HJTA made an agreement with the Southern California News Group papers to carry Jon Coupal's weekly column. The newspapers in the group, including the Orange County Register and the Los Angeles Daily News, have added a paywall that allows only a limited number of page views per month, and then asks readers to become subscribers. HJTA is not marketing these subscriptions or receiving any payment from them. The columns are exclusive to SCNG's papers for one week and then are posted in full on HJTA's own website, www.hjta.org ([link removed]) , under "California Commentaries," where you can read them at your convenience, or read Jon's column online in all the SCNG papers at these links:
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Jon Coupal is the President of the Howard Jarvis Taxpayers Association (HJTA). He is a recognized expert in California fiscal affairs and has argued numerous tax cases before the courts.
HJTA always appreciates the support of its members, if it doesn't pose a hardship. Your donations help us fight to protect Proposition 13 and all California taxpayers.
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