When I first heard (yesterday) about Schwarzenegger’s plan to tax
homeowners on their insurance policies as a way to fill some of his massive budget hole, I assumed I was being told about a terrible idea that never got anywhere, "but boy Doug you’ll thik it’s funny they even considered this."  But no, in fact this one was salvaged from the really dumb idea file and written up as an actual plan that the Governor is pitching.  When radio host Patt Morrison had me and Republican Assemblyman Anthony Adams on her radio show today (listen here) to criticize the plan, the Governor’s office did not accept the invitation to join the show defend their plan. 

We lay out how bad it is in this press release.  But let me count a few of the ways right here:

1. Schwarzenegger wants insurance customers to pay the tax, and insurance companies don’t pick up any of the costs
2. Insurance companies stand to gain the most from the tax, a portion of which will be used for fighting (costly, but relatively limited in terms of the number of affected homes) wildfires, which means that they will have reduced claim payments
3. Insurance companies have donated more than $3.8 million to Schwarzenegger (see ArnoldWatch.org for more on this)
4. It appears to have been the brainchild of Schwarzenegger’s Deputy Chief of Staff, Dan Dunmoyer, whose last job in the private sector was as the insurance industry’s top lobbyist in California for more than a decade
5. You pay a higher tax if you have a higher premium, which means that a family with the same income and the same amount of insurance coverage as their neighbor could pay as much as 400% more  tax than the neighbor, just becuase te neighbor got a better deal on insurance (by my quick comparisons at the Department of Insurance premium comparison page)
6. You pay a double tax if you happen to be one of the too-few Californians who also by earthquake insurance (of course we ought to double dip on those suckers)

I could go on, and will as this develps…