SBOE Candidate Interview Ouestions

The text below includes the questions asked in the interviews conducted by the California Channel for its public access segments, and my answers to those questions. It forms the core of my position statements.

In 60 seconds, who is Kennita Watson?
I'm many things to many people -- sometimes loyal friend and ally, sometimes loyal opposition, sometimes peacemaker, sometimes teacher. I am known for loving language (almost entirely English, y apenas un poco del español; excusar por favor mi acento). I also love math, science, and logic, as well as singing and dancing. I'm an optimist, I tend to look for the best in everyone, and I look for chances to help people whenever I can. In the context of the Board of Equalization race, I'm a Libertarian, meaning I support individual liberty -- the right of every person to do as he or she chooses as long as that doesn't interfere with the equal right of others to do as they choose. I care about people as individuals, and I understand that what's right for one person or group isn't necessarily right for another, so I resist government's one-size-fits-all solutions, which often end up being one-size-fits-none. There's much more to me, of course, but that's all I can fit in 60 seconds.

Why are you running for the 1st district Seat of the State Board of Equalization - and how are you qualified to serve?
I'm running for this office because the people of California deserve the chance to vote for a change in the status quo. The Republicans and Democrats have been in charge of the money and the power for a long time. For the State Board of Equalization, which is a major administrative and watchdog agency for the enormous tax revenues of the state, to also be controlled by Republicans and Democrats is a clear case of the fox watching the henhouse. As a Libertarian, I am a member of the only party dedicated to reducing taxes, so I'd keep an eagle eye out for any excesses. As for qualifications, I freely admit that I'm a political outsider; in the watchdog context, I think that's a good thing. My major qualification is probably my years as a quality assurance engineer.

What educational background and/or professional experience has best prepared you for being a member of California's State Board of Equalization?
As a graduate of MIT and Stanford in Computer Science, I learn fast and think logically, and as a quality engineer, I readily find problems with a process, figure out how to fix them, and see that they don't happen again. I have proficiency with numbers and procedures, as well as with getting along with people. Both in dealing with computers and with people, I've needed to learn to be both patient and persistent, which I think will be quite valuable when it comes to being a member of a government agency. Also, in the Libertarian Party and elsewhere, I've needed to become familiar with Parliamentary Procedure, which will certainly come in handy.

What do you see as the most important responsibility of being a member of the State Board of Equalization?
I see the most important responsibility as doing everything possible to ensure the fair treatment of all Californians as regards taxation. As a Libertarian, I would like to see many taxes eliminated or reduced, but where that is not possible, I can at least press to see that taxpayers are treated as well and fairly as possible, and that they can get information about the multitude of taxes they pay in plain language and in easily-readable format, well-organized and easy to find.

If elected, what will be your first, second, and third priorities, and why?
My top three priorities would of course be to perform the three main duties of the Board to the best of my ability, those being: 1) to oversee the administration of over two dozen tax and fee programs including sales and use, cigarette and tobacco, alcohol and fuels tax; 2) to serve as the appellate body for California income and franchise tax cases; and 3) to oversee the administration of property tax statewide. Why those should be my top priorities goes without saying, since they are the main duties of the Board, but I would perform them from a Libertarian perspective, that is, I would look to lighten the tax burden on the citizens, not just to evenly distribute it.

In your four-year term on the Board of Equalization, what do you hope to accomplish, and how?
I believe I would best serve the people of California by offering a new, Libertarian perspective on the duties of the Board, by for example:
  1. working to reform sales tax laws to officially allow individual tax-free trade;
  2. greatly increasing the visibility of the Board and its operations;
  3. ensuring that earmarked funds are not diverted to the General Fund;
  4. ensuring that the legislative analysis of propositions accurately reflects their likely expenses and income; and
  5. actively soliciting suggestions for budget reductions, perhaps with a reward.

What do you feel should be the defining issues of this election for this office?
Full disclosure and outreach. The State Board of Equalization is the most powerful board that no one knows anything about that I can think of. Most people I meet don't know what the Board is or what they do. I think that if people were more aware of the taxes they pay and what those taxes cost both them personally and the state (in terms of loss of business and overregulation), there would be more action taken to reduce their burden and complexity.

Without referencing your opponents, why should Californians vote for you to become a member of California's State Board of Equalization?
Vote for me because I am the best person for the job, of course! I am intelligent, observant, persistent, friendly, and I want to see your money in your pocket so that you can decide what to do with it. Also, a vote for a Libertarian is a vote to change the status quo of taxes growing and freedoms shrinking.

The Constitution Revision Commission recommended that your office should be appointed rather than elected. Do you agree, and why?
Absolutely not. I think the people have little enough control as regards taxation, and having a political insider choose another political insider for the job is just another example of the fox guarding the henhouse.

Other changes might be in order, however. Some possibilities might be: making the office non-partisan, thus eliminating the primary and allowing Decline-To-State voters to enter the running; instituting instant-runoff voting for the office; or having the appellate body of the Board elected separately from the administrative body.

Senate Constitutional Amendment 3 would create an independent, 11-member citizens commission to draw legislative, congressional, and Board of Equalization boundaries. For the board. . . do you see this as an essential reform? Why or why not?
I say Constitutional Amendment 3 is laudable as an attempt to increase transparency in the redistricting process, but it gives minority parties the short end of the stick. For example, from the commission of 11, the two majority parties each get four seats, leaving all the alternative parties, with their disparate agendas, to vie for the remaining three. That said, I don't think the Amendment is essential for the Board of Equalization. I haven't seen a problem with district lines for the Board, since they are along county lines rather than precinct-by-precinct.

The California Constitution Revision Commission recommended merging the Franchise Tax Board and the Board of Equalization to make the collection of taxes more efficient and to eliminate duplication of effort. Do you feel that reorganization of the tax collection structure in California is necessary or desirable? Why?
I think reorganization is desirable, but not by merging the Franchise Tax Board and Board of Equalization. Each of those two organizations is already quite large enough. As a Libertarian, I don't want to make collecting taxes more efficient -- I want there to be fewer taxes to collect. I don't want to eliminate duplication of effort so much as to have less effort to duplicate. Actually, a certain amount of duplication of effort allows a cross-check to see that the two efforts come up with the same outcome, so it's not necessarily a bad thing.

If anything, the reorganization should be by eliminating the Franchise Tax Board. We could study the nine states that have no or virtually no state income tax to see how they manage to balance their budgets, and see in what ways we could emulate them.

What is your experience with property taxes, income taxes, and sales and use tax?
My primary experience with property taxes and income taxes is with paying them. As far as sales and use taxes, I did once have a one-person retail business that had to file for a resale license and to file sales and use tax returns. The entire exercise was ludicrous; it surely cost more to process and keep track of my paperwork than was collected from me in tax -- even if I didn't factor in the time and effort that I spent on tabulating receipts, filling out forms, and all the rest.

What is your feeling about a sales tax for internet sales? Why or Why not?
There absolutely should NOT be a sales tax for Internet sales. Currently Internet sales are taxed the same as retail or mail-order sales (as anyone who has bought goods over the Internet from a vendor with a base in California can attest); that is, sales within a state can be taxed by the state. Sales between states cannot, as is mandated by the United States Constitution. Imposing a sales tax on all Internet sales regardless of origin or destination is an underhanded attempt to try to weasel around that Constitutional protection.

As a Libertarian, I point out (again) that sales taxes in general are regressive, meaning they impose a greater burden on people with lower incomes, which is just another reason to be against this tax. Internet sales taxes - and ALL sales taxes - should be among the first to be eliminated and the last to be considered.

What are your property tax theories?
I haven't made property tax theory an area of academic study, so I don't have much to say on that subject.

What could the board do to further encourage retailers to voluntarily comply with tax laws?
  • Have fewer laws;
  • State the laws in plain language;
  • Make the forms easier to fill out; and
  • Make clear to retailers what they get for their money, and the advantages of compliance (other than not being hassled by the authorities or fined).

What legislative proposals would you introduce as a Board of Equalization member?
I would introduce a proposal that the sales and use tax filing requirement be waived if sales are less than a certain amount per month. And the legislation should be written so that the amount can be easily reevaluated and revised upward -- for example, with inflation.

On a related note, I would introduce a proposal that the sales tax on used items be eliminated completely. It's double taxation (or more, depending how often the item changes hands). And, while it's often not collected, it makes criminals of many people (for example, eBay users), creating an unhealthy temptation for selective law enforcement -- not a good thing for a fair and equal society.

What is your position on Prop. 86, the $2.60 per pack tax on cigarettes to fund health programs?
Two points. First: The health programs that Prop. 86 would support are valuable and even important -- too important to use a tax on smoking to fund them. Say you write your budget assuming a certain amount of income from the cigarette tax. Your health programs had better not induce too many people to quit smoking, because if they do, the tax will generate much less income and your budget is shot. As a matter of fact, this has already happened; a good chunk of the Prop. 86 funds are earmarked to backfill shortfalls in the revenues from Prop. 10, the last cigarette tax increase.

Second, and even more important: high prices on cigarettes lead to a black market much like the ones for illegal drugs, creating more criminals out of nothing as nicotine addicts resort to buying tax-free cigarettes from smugglers to get their smokes at a bargain price. In Sweden, just this year the cigarette tax was rolled back by 25% to curb smuggling. New Yorkers are getting their cigarettes from people who buy them more cheaply out-of-state and smuggle them across the state border. And in 2004 the Washington Post reported that millions of dollars in profits from illegal cigarette sales were being funneled to terrorist organizations such as al Qaeda and Hezbollah. The higher the tax, the higher the incidence of smuggling. I see no reason for us Californians to cause ourselves such a headache by raising our cigarette taxes. No on 86!

And what is your position on Proposition 90 . . . The Land use initiative on the November ballot?
I think that eliminating the use of eminent domain to take private property for private purposes is important enough that I tend towards wanting to pass Proposition 90 on that basis. The No on 90 campaigners speak of a number of potential negative consequences, but I expect those would be hashed out in the courts, or even result in amendment of the proposition after the fact. Eminent domain abuse has been going on for a long time, and Prop. 90 is just the reaction to the latest egregious instances. Maybe the potential negatives will arise, and maybe they will remain potential. In the meantime, individual property owners could rest easier, having more protection against their property being taken without their consent and without just compensation -- not to say that there is any just compensation for removing someone from the only home they have ever lived in, or from the place of business that has been in the family for three generations. Yes on 90.

And while we are on the subject of ballot measures. . . Do you feel that Prop. 13, the "People's Initiative to Limit Property Taxation," is a viable law in 2006 and should it remain as is, an essential part of our state budget process?
I think so, because it keeps many people's property taxes relatively low, especially people who can't afford to have them raised, such as the elderly and others who are on fixed incomes. I've heard various charges leveled against it, from promoting urban blight to restraint of trade, and I'm open to debate on the issue, but I say that before you go raising property taxes, you'd better take a much more serious look at limiting expenditures.

What are your views about the state tax structure?
California's tax structure suffers from the same ills as almost every tax system. That is, all too often it is used as an attempt to force our values on others (as in Prop. 86, the cigarette tax increase) or simply to buy votes by charging one group of taxpayers to subsidize some other group (as in Prop. 89, the corporate tax increase). More fair would be to focus on fees to cover the costs of the goods and services that we actually use (where "we" can mean either an individual or a business), and the costs that we impose on each other and the environment. Where these can't immediately be put in place, offer taxpayers incentives to provide some of their own services by reducing their tax burden by the amount that the state would spend to provide the same services.

In the event of a crisis or emergency, the state sales tax is usually the first to go up in an effort to raise state revenues. Once the crisis is over should such increases be rolled back?
Of course they should. The increases shouldn't have been necessary to begin with -- that we feel we need them is a sign of poor fiscal management -- but the emergency income should go away as soon as the emergency is over. It's too easy to become dependent on having the extra money around, and soon it's not "extra"; the government's sworn duty is to spend all it has and more.

What could the SBOE do to increase taxpayer education and further promote awareness of licensing and permit requirements?
Quite a few things! For example:
  • Make all documents available as HTML as well as PDF, and make them searchable.
  • Allow filing all forms online. Information for each field of the form should be available by clicking on the field header. If the regulations and their associated forms are complicated enough that this often doesn't work, simplify the regulations and forms.
  • Create Board-related podcasts and other Web-based presentations and make them available on the SBOE Web site.
  • Make the list of sales tax rates searchable.
  • Make the permit registration process question/answer.
  • Offer Board-related courses in high schools and community colleges for academic credit.

Two-Minute Closing Statement

I'm Kennita Watson, the Libertarian candidate for the California State Board of Equalization, First District. Some people have asked me "Libertarians are against taxes, so why would a Libertarian want to be on the tax board?". To them I say: Because the fox (or rather, the elephant and the donkey) has been watching over California's financial henhouse for too long, and I want to let people know it's time for a real watchdog. Others have asked "Why are you running when you know you won't win?". To them I say: The play's the thing. I absolutely can't win if I don't run, and even in running I have an opportunity to make Libertarian views known that I wouldn't have if I just watched from the sidelines. Still others have asked "What does the Board of Equalization do, anyway?". My answer for them is: Join the club. The Board of Equalization is arguably the most powerful organization that no one knows anything about on the face of the Earth. The taxes and fees administered by the Board yield over $40 billion annually, more than the gross domestic product of 2/3 of the countries in the world. I want every Californian -- I want you -- to know where all that money flowing through the Board's hands comes from, and where it goes, because as a Libertarian I believe that armed with that information you can make better decisions about your financial priorities for yourself than some bureaucrat in Sacramento can make for you. I'm not proud; if I'm elected, that bureaucrat would be me. If there's any message I'd like to leave you with, it's that no bureaucrat, no politician, and no well-meaning stranger, however wise, cares more about your life, your liberty, or your property than you do. In November, vote for me, Kennita Watson, and send a message that you are ready to take care of your own life! Thank you for your time, and hopefully for your vote.