Another California Tax Grab

The politicians have fueled an affordability crisis that drives away businesses and exacerbates homelessness.

California Gov. Gavin Newsom let his 2-year-old son run on stage to display his soft side as he delivered his inaugural address Jan. 7. Then he showed his command-and-control side by making clear he wants more spending and new taxes.

California took in record tax revenue in 2018, beating estimates by $1 billion according to the Los Angeles Times. But Mr. Newsom demanded even more: “I want to see the [companies in Silicon] Valley step up and match our contributions,” he said, referring to his proposed $500 million workforce-housing budget. It’s a classic big-government non sequitur: Overtaxed workers—including those who earn $100,000—are struggling to make mortgage payments, so Mr. Newsom’s solution is more taxes. He proposes to extract an extra $500 million so the state can subsidize the workers’ housing.

Could Mr. Newsom force companies to “match” the state’s “contributions”? In a state where the Franchise Tax Board legally revokes driver’s licenses without a trial—quite possibly.

In Newsom-speak, “The workforce housing issues have been accelerated by the success of a lot of these companies.” But private-sector success isn’t to blame for the state’s affordability problem. The real problem is government failure.

Consider this: Apple is investing $1 billion to create 5,000 jobs in Austin, Texas, where a $40,816 salary pays for the same lifestyle that costs $75,000 in the San Francisco Bay Area, according to Bankrate’s cost-of-living calculator. Housing is a big part of that: The median housing price (and mortgage payment) in Silicon Valley is 3.8 times as high as in Austin. That’s what happens when the government jacks up taxes, wastes money, and smothers the construction of new housing in bureaucracy.

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