[DEMOCRACY IN ACTION Transcript]

Well thank you all for being here this morning. We're here to play Gavinopoly, which is an illustration of all the taxes that are paid in California. We live in a beautiful, beautiful state. I love living in California, but I'm in the top 1%. A lot of people are not able to live very well in this state and that's the point of this demonstration, that's the point of the recall as a matter of fact, because working Californians have a real problem making it in this state.

This state has the highest taxes in the country, and today I'm proposing the largest tax decrease in the history of California—a 25% across-the-board reduction in the outrageous taxes that are paid by the people of the state.

Right now in California, as you can see, we pay an income tax we pay license fees, we pay a gasoline tax that's one of the highest in the country, we pay a sales tax that's one of the highest in the country. We pay property taxes, our businesses pay a corporate tax, the franchise tax is very high.

This state legislature combined with our Governor, Gavin Newsom, has taxed Californians to death. And now this governor is feeling the heat. You may have seen recently that he gave an interview in an editorial board where he was very, very defensive about what he's done in the state but he should know that most Californians can't afford to live here any longer and that's a major reason why this governor will be recalled on September 14.

Right now in this state you'll see fires raging all across the state. We have shortages of electricity and water. We have homeless all over our streets, a housing crisis that has not been dealt with, rising crime and this governor keeps letting people out of jail. The lack of a adequate fire response is polluting our air and making it so that people can't breathe very well. These are all the problems stacking up on Mr Newsom, and he talks about all the IPOs and all the great things coming out of Silicon Valley. Well you know what, that only benefits a small percentage of the people of the state.

So I'm calling for a 25% reduction in taxes. But I'm also calling for a reduction in corporate loopholes. Newsom loves to hand out benefits to his lobbyist friends. We know his lobbyist friends because they're the ones he had dinner with at the French Laundry. Well, the people of this state end up paying for those tax loopholes that are given to corporations. Netflix doesn't need a tax credit in order to film in California. What we need in order to bring filming back to California is a reduction in the cost of living which is outrageous and pushes salaries so high.

We also need to make sure that money is spent wisely in this state. I'm the only CPA, I'm the only outsider businessman running in this race. The career politicians and the insiders and the media types who have been running this state into the ground don't know how to spend our money efficiently and wisely. I do.

And what we're gonna do when I'm the governor of this state is that we're going to audit every single agency of government. We're going to make sure we know how the money is spent. Every single dime is going to be posted online in real time.

And the fourth thing that we're going to do is we're going to practice zero based budgeting. I'm a CPA, and I've used zero based budgeting in my businesses for over 40 years. Zero based budgeting is when you start with zero and you justify every single expense in the budget. A lot of times government just takes last year's budget and adds a few percentage points. What does that do? That encourages more spending. It also encourages agency managers to spend all their budget of allotment at the end of the year so they can get a bigger allocation the next year. That is a waste of taxpayer money. We've got to use money wisely and efficiently, just like I do in my business.

And that's what we'll do when the governor of the state.

We'll get these budgets in line, we'll make sure that we reduce the waste, the corruption and the mismanagement in this government, and we'll deliver real results to the people in this state, particularly in the areas where it matters so much—fire, wildfire control, crime prevention, and of course education.

We're seeing this debate going on right now with all the mask and the vaccine mandates. We need to put the power of education into the hands of the parents. And that's also going to mean that money is spent productively.

We need to change this government; we need to change the way that we're doing business in this state. This state is not affordable by the average working Californian and we need to make it so that people can make a living in the state, and have an affordable life and so that businesses and people don't flee the state. That's what this recall is all about. That's why I'm here in Los Angeles. That's why I was in San Francisco yesterday; I'm going to be in Santa Barbara tomorrow, San Diego, the next day. We're going to carry this message that we're going to fix California; we're going to make this state affordable and livable for people, and that's what this recall is all about. Thank you for being here today, and I'll be happy to take questions.


QUESTION:  Mr. Cox, do you have any plans on what you plan to do with some of that surplus money that California has accumulated?

COX:  I think it should go back to the people; that came from the people, the taxpayers of this state. To give you an idea of the magnitude of what the taxes are on the middle class, the middle class in California, people making between $58,000 a year and $299,000 a year, pay a marginal tax rate of 9.3%. You don't see it very much because it's withheld from your pay, but that's what the tax rate is. Just to give you a frame of reference, the top tax rate in Colorado is about four and a half percent—that's paid by millionaires. And in California, middle class people people, between 58 and 299,000, which by the way is not as wealthy as it is in other states because of the cost of living here, that tax rate in California is 9.3%. That is way too high. Even a 25% reduction is only going to reduce that to about 7%. Believe me, when I'm the governor of the state, and we get money spent wisely efficiently, we'll be cutting those taxes even more as we go along.

QUESTION:  How did you arrive at your 25 percent number?

COX:  Well, we calculated what we could reasonably do early on with the budget the way it is and with the way that things are set up right now with all the agencies, all the boards and commissions and all the institutional spending. Once we get into the budget, once we really take this budget apart, once we start disclosing where all this money is going— I mean this budget this year, they're going to spend $270 billion a year. Just to give you a frame of reference, eight years ago that budget was about 130 billion. So it's double in a little, a little bit more than eight years. I mean that is a huge increase.

And I think that money, that extra money should go back to the people in the state because after all they're the ones that paid it. And it'll infuse more economic growth into this economy; we'll get a growing economy.

You know, the way you get a growing economy is by attracting investment, but if you look at what's happened over the last number of years, Hewlett Packard. Charles Schwab, Toyota, Nestle, a whole bunch of companies have left this state for good, and many companies have expanded operations, Apple, Intel, a whole bunch of companies that are home-grown in California have set up, manufacturing and office operations in other states like Arizona and Texas, Nevada. Tesla has left. Even Elon Musk has left California; he sold all those houses here. So, we have got to make this state affordable. We've got to attract business; we can't keep repelling it. And we can do that; we can do that. I'm a CPA. I can take this budget apart, and we'll make sure we spend this money wisely and efficiently.

QUESTION:  How about other taxes and fees...?

COX:  Yeah, California has a humungous franchise tax that's paid by every single small business. The other thing about California, is that—it's not a direct tax—but regulation is really a tax, because regulation means that you have to hire accountants and lawyers to deal with those regulations, and to deal with the bureaucracy. You know, big business doesn't care about regulation; they just hire a another lawyer or another accountant and put them on payroll. But a small business has to go in to their savings in order to be able to pay those costs. And the cost of regulation, the cost of lawsuits in the state is absolutely nothing short of outrageous. California is a judicial hellhole. You cannot run a business in the state without steering clear of lawyers and lawsuits and bureaucratic actions by the, by state government. And that just adds to the cost. And that means everything you pay for—all the clothing, all the food you eat, everything bears that cost. And that's why when we reduce the cost of living, we'll get a virtuous cycle of lower costs for everything.

And one of the biggest things that I'm going to address is housing costs. Housing costs are just outrageous in this state. I'm in the housing business. I build homes for 1/5th what it costs to do in California, and it's government that drives up that cost.

Anything else?

QUESTION:  Mr. Cox, there's a lot of political advocates out there that are saying that the reason we have so many, such high taxes is because we have a lot of people that live in this state; and we have a lot of needy people. So with this tax cut, how is that going to benefit not only the middle class, but for the low income areas.

COX:  Well the ones that are most hurt by the rising cost of living are the people at the bottom of the economic ladder. They can't afford price increases. They can't afford $5.50-6.00 a gallon gasoline. I mean, go and look and see what it's, it's costing people. And because a lot of those people have to live farther and farther away from their job because of the housing costs being so high, they're also now incurring the additional cost of gasoline to get to work. And that's one reason our roads are so clogged as well. People are spending two to three hours in a car commuting  because they're living so far away from work and they're burning $5-6 a gallon gasoline. Meanwhile, Mr Newsom denies drilling permits for gasoline. So guess what? Refiners in California are importing oil from Venezuela, North Dakota, Texas—they're importing it by the way by truck, which is not environmentally feasible. Instead we should be drilling for oil in California, and refining it here, and reducing the gas tax and reducing the cost of gasoline.

QUESTION:  Well just to be fair, California is with its clean air, clean air [inaud.] laws, you have to have special, special formulizations for the gasoline, so that contributes to the price too.

COX:  It does, but the refineries are still producing that here. And where do they get the oil from, to, to make that gasoline? They obviously have to get it from wells in California, but because there's fewer, fewer wells being drilled in California, they have to get it from other places like Venezuela, Texas and North Dakota.

Believe me I've talked to the refiners who—yes, the price is driven up by the special blends. It's also driven by the gasoline tax, which has been increased by the politicians. Even though Caltrans wastes a ton of money. Caltrans spends twice what Texas does to build a mile of road. That is inefficiency, that is a lack of productivity, that is a lack of business sense.

Listen, listen to this. Businessmen have been elected governors all around the country, in blue states like Maryland and Massachusetts, in swing states like Arizona, and they're the most popular governors in the country because they get things done, and they don't waste money.

QUESTION:  On the high speed rail project what's, what's your opinion on that?

COX:  That's one of the first pieces of wasteful spending that I'm going to cut. Listen, high speed rail can be very beneficial. If they'd have focused on building high speed rail from Los Angeles to Las Vegas, that would been profitable day one, and then it would have led to other projects with high speed rail. You could do high speed rail between San Diego and Los Angeles, believe it or not quite a few commuters that do that. We should do selected high speed rail projects around the state, but doing one going through the Central Valley from San Francisco to Los Angeles, and then doing it where there was no easement already— I mean they could have built it down the middle of the [Highway] 5, and it would have been built already at a lot less cost but they didn't want to do that. They wanted to put it in other areas and satisfy a lot of people who are making money selling land to the High Speed Rail Authority, as well as all the environmental remediation reports, the EIRs, that have to be filed. That, that is just an unbelievable boondoggle, and it's one of the first things that I would cancel as governor.

QUESTION:  Bottom line, why does California spend so much money?

COX: Because it has, politicians have spent money because of political considerations, and not because of the practical, honest to God, reality. What we need to do is spend money efficiently and productively, which means we don't build projects in the Central Valley. We build high speed rail where it makes sense and where it's going to be profitable. That's what I do in my business every single day. You know, computer systems. California spends so much on labor in state departments because it hasn't upgraded his computer systems. In the last three decades I've upgraded my computer systems three times. And why? Because each time my business gets more productive and more efficient. I can do more with fewer people. That is helpful. That keeps government spending down, that keeps taxes down, and enables investment to be made in the private sector, where we get innovations and increases of living standards. That's how the state should be run. Instead right now the state is being run for the politicians and not for the people.