Speaker Bass announced that Gerald Parsky will be the head of the California Tax Commission. The Commission was formed in October with the mission of releasing a report on April 15 (cute, huh?) on how to restructure the tax code in California. For some background, Parsky is the former chair of George W. Bush's California campaigns in 2000 and 2004. Along with Parsky, Bass named at least one more member of the commission, Chris Edley, the dean of UC's Boalt School of Law.
As for what this commission is going to do exactly, well, that's not totally clear:
The commission's stated goal is not to raise taxes, Bass and the governor have said.
"It is revenue neutral, so we're not looking, at this particular point, for any additional revenues. We are basically just looking for one thing and that is to create stability," Schwarzenegger said at the press conference announcing the commission.
As for who else will be represented, Bass has made clear she wants a diverse group.
"When we looked at forming the commission we wanted to make sure that every sector of our economy was represented," she said in October, "so we want to make sure that we have business leaders there, we want to make sure we have the high-tech industry, agriculture, etc." (SacBee 12/08/08)
Obviously our overly cyclical tax structure has failed us. By relying almost solely on a few revenue streams, primarily the income tax and capital gains, we have forced ourselves into these boom-bust cycles. The question is what can this commission do to fix that?
As a Republican with a strong background supporting Bush and McCain, Parsky will presumably have a better shot at convincing some of the Republican legislators of the importance of some of these reforms. He's fairly close with Arnold, and his name was tossed out as a possible Treasury Secretary had McCain prevailed last month. He's raised millions of dollars for Republican candidates, so if money counts, and it does, he should have the ear of the GOP legislators. In many ways we need a prominent Republican voice on this commission, the Republicans need cover from a big-time money guy who has a track record on the GOP private sector trickle-down mumbo jumbo.
And Parsky does have the private sector GOP mumbo jumbo street cred. More over the flip.
If Parsky can bring some common sense progressive reforms to our tax code, great. The guideline of a revenue neutral reform should be some sort of Shock Doctrine protection. The important part of this is not just the smoothing of our income stream, but to also ensure fairness and that every pays their fare share. However, we need to ensure that the Republicans on this commission aren't looking to facilitate any Shock Doctrination of California. Parsky is generally moderate, but he has been known to push for some very corporate friendly policies in the past.
Parsky has a history of these commission reports. Back in 2007, Parsky was named to a commission to review our pension obligations to public employees. The report that was released called for immediate action, but in the end was summarily ignored.
Parsky knows quite a bit about pensions though. After all, he created the mess in UC's Regents Investment Committee. For a full report on this, I highly recommend checking out Chris Thompson's story on Parsky from 2007 had a great story about Parsky back in 2007. Parsky was the key figure behind moving Cal's pension fund from a body operated based upon the advice drawn from the world class staff at the University of California system into one just another plaything of bigtime investment managers.
It's nothing new in the Bush dominated America: government for the profit of the rich. Will Parsky's leadership of Bass's commission mean that any reforms will be regressive? Not necessarily, but with such a big goal, opportunities for big changes arise. We need to move towards a more fair and a more progressive tax structure rather than going backwards.
Some more on the Pension below:
In 1999 and 2000, in a series of secret meetings, Parsky spearheaded an effort to radically remake the pension fund's investment philosophy. Under his leadership, the regents gave hundreds of thousands of dollars to a Los Angeles investment firm to recommend and implement changes to the way the university invests tens of billions of dollars. At the same time, the president of that firm, Wilshire Associates, gave tens of thousands of dollars to the very Bush presidential campaign chaired by Parsky.
Wilshire, Parsky, and the Regents' Investment Committee farmed out control of the investment fund to an army of pension consultants and money management firms, ending the decades-long practice of using university staff to trade stocks themselves. Along the way, they humiliated and destroyed the reputation of Patricia Small, the UC treasurer who had managed the investments for years and strenuously opposed their plans. Billions of dollars in stock were bought and sold in the midst of a massive stock market crash.
Seven years later, what was once one of the most lucrative pension plans in America is in desperate trouble. Before Parsky and his colleagues restructured the investment strategy, the university's fund easily made more money than the average pension plan. Now, it ranks among the country's worst performers. Before Parsky's reforms, the university paid nothing to outside money management companies, aside from a small venture capital arm. Last year, the UC treasurer's office paid at least $32 million to forty different money management companies whose investment advice may have cost the fund billions of dollars. (East Bay Express 5/9/2007)