Davis Presses Simon on Taxes

SACRAMENTO — Gov. Gray Davis escalated his criticism of Republican challenger Bill Simon Jr. on Wednesday, suggesting that Simon may be hiding something by refusing to unveil his tax returns.

Davis made his remarks after a speech to the California Chamber of Commerce, where his aides passed out copies of a Times article recounting how Simon, a multimillionaire, compared the Democratic governor to Karl Marx for calling on Simon to release his tax returns.

“We won’t know whether he paid his fair share until he discloses that information,” Davis said, adding with a wide grin that he was “a little surprised” that Simon compared him to Marx.

On Tuesday, the day after most taxpayers filed their 2001 income tax returns, Simon told a San Francisco radio talk show host: “I don’t even know what a fair share is. I mean, that sounds like somebody coming out of Moscow, you know? ‘Their fair share.’ You know, Karl Marx talked like that.”

Simon stood by his remarks Wednesday: “It’s just a comment. Gov. Davis made a comment, and I made a response. I think people need to pay taxes that they owe. I don’t need the governor to tell me what’s a fair share.”

Simon also reaffirmed that he has no plans to release his state or federal income tax returns, and offered an ambiguous answer when asked whether he paid California state income taxes in 2001.

“I’d have to go back and take a look at all that information,” Simon told reporters. “I’m not prepared to answer that today. I’m sure whatever we owed we paid.”

The campaign skirmish began Monday when Davis released his tax returns and called on Simon to do the same. Davis, a career politician, reported that he and his wife, Sharon, paid more than $55,000 in state and federal taxes on income of $200,351.

Although no state or federal law compels public disclosure, candidates for statewide and national office commonly release their income tax returns--and criticize any opponents who like Simon balk at making their tax filings public.

“It’s a difficult situation,” said George Gorton, who managed campaigns for Republican Gov. Pete Wilson, a politician who routinely released his income tax returns. “It’s like not debating.”

The back-and-forth over disclosure overshadowed back-to-back speeches by Davis and Simon to the California Chamber of Commerce.

Davis said his achievements in office include improvements in public schools, spending $7 billion on transportation projects and cutting taxes by $4.3 billion.

He also said he plans to sign a $2.1-billion bond proposal for the November ballot that would help finance housing for low- and moderate-income Californians, and he told the business leaders he will sign legislation extending so-called enterprise zones for 20 years. Businesses receive tax breaks and other incentives by locating in such zones, which generally are in economically depressed areas.

Simon criticized Davis’ handling of the energy crisis and the state budget, charging that the governor inherited an $8-billion surplus and is “trying to paper over a record $15-billion to $17-billion deficit.”

Simon called for a 15% reduction in spending on programs other than public safety and public education, and for cuts in state taxes on income and capital gains.

“If someone is going to complain about a large deficit,” Davis said, “I’d like to think they contributed something in the way of paying taxes to keep the government running.”

Davis called it essential that people running for office disclose whether they have paid their fair share of taxes, and again slapped at Simon for failing to vote in several elections.

“There are a couple of fundamental obligations of citizenship: voting and paying taxes,” the governor said. “Surely, if you’re going to stand for public office, you should be willing to do both.”

“Every American should pay their taxes,” Simon told reporters after his speech, “and I do pay my taxes.”

Simon said he has nothing to hide, and noted that he complied with state law by publicly filing a statement of economic interests with the Fair Political Practices Commission. The conflict-of-interest report, which all candidates and office holders must file, discloses “pretty much all my holdings and all my sources of income,” Simon said.

“Where do you draw the line?” he said. “We drew the line with the statement of economic interests. We felt that was adequate disclosure.”

Simon said he applied for a 90-day extension on filing his tax returns. But people who file extensions still must pay what they owe to the state and federal governments.

“We got an extension on the return because they’re fairly complex,” Simon said, “and so routinely every year we get an extension in order to receive all the information we need.”