Orange-County Courant

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Friday, August 12, 2005

FlashReport features Leonard on nature of the BoE

Dear Sir or Madame,

The FlashReport today, published daily by Jon Fleischman, is a great read and today was no exception (to receive the FlashReport send an email to Fleischman has an exclusive piece by Board of Equalization member Bill Leonard on the nature of the Board.

Here's the text in full:


By Bill Leonard

The FlashReport article about the Board of Equalization touched on the basics of the Board’s functions (administering sales and use tax, serving as the appellate body for income taxes), but neglected to highlight the important role the Board plays, particularly to people who would invoke the name of Frederic Bastiat.

The BoE is the nation’s only elected tax commission. California is the only state where taxpayers can appear before elected officials without counsel and explain why they believe they do not owe a tax, or why they should be relieved of a penalty. It is the only state where tax bureaucrats must answer to elected officials in a public forum about why they believe a taxpayer owes money or should be penalized. It is the only place where elected officials vote regularly to apply and interpret tax law openly, as well as provide direction to the tax agents about how they should be treating taxpayers.

For these reasons, it is important that the BOE remain an elected body. And for even more obvious reasons, it is important that we elect the right people to this body. Consider this one case the Board heard. An elderly man was appealing his income tax bill. He had been seriously ill one year and had neglected to file his return. Because he did not declare his own income, the state calculated it for him. Although he was long retired, he took pride in keeping his California insurance license active. The tax agents thus consulted Census data to determine the average income of insurance agents in California and assigned that amount of income to this 80+ year old man. How could this man prove he did not earn that amount of money? If all his old clients wrote to us and said they did not do business with him, the bureaucrats could argue that he had new clients. If all the companies he brokered for wrote to say they had not issued any policies through him, staff would tell us that he worked with new companies. Did we check his bank account for deposits? No. Yet the Board voted 3-2 against the man’s appeal and he was required to pay income taxes on some $40,000 of income he did not earn.

For other examples of horror stories that could have turned out differently if the BoE had more bleeding heart conservatives instead of hard hearted liberals, see “Horror Stories from the Tax Bureaucracy” at

The State Controller's race will certainly be one to watch late this year and into next, for the Controller is the tie-breaking vote on the BoE. Right now on the Republican side there doesn't seem to be any sort of ambiguity over who's the more conservative. It's easily Tony Strickland. But he'll face tough opposition by Senate newcomer Abel Maldonado ("Maldo" to his friends). Strickland will be in town again later this month for a fundraiser at the Balboa Bay Club alongside local Assemblyman Chuck DeVore.

The race for the BoE seat in this area is contested, but not sharply. Michelle Park Steele is way ahead in fundraising and appearances after Jim Brulte jumped out to make way for Assemblyman Ray Haynes. A previous FlashReport featured the specifics on this race (along with a humorous mistake by Fleischman that had readers directed to a website featuring a strange-looking, bald, long bearded man in camo pants smiling for the camera).

By all appearances, this will be a very fun series of elections coming up. Stay tuned at the Orange-County Courant for frequent updates.

Yours in liberty,



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