It's being treated as news that California Gov. Arnold Schwarzenegger is considering a tax increase. (In private, two Republican sources tell me, he is starting to engage Republican legislators on the question of tax increases). But this is no surprise. During his more than four years as governor, Schwarzenegger has maintained a public anti-tax stance even as he frequently has considered raising taxes. In the spring of 2004, according to internal polling and other documents I turned up while researching a 2006 book on Schwarzenegger, he considered a temporary sales tax increase and polled on possible tax options that would sell with the public. The polling showed the public supported tax increases -- but would nevertheless be unhappy at Schwarzenegger for breaking his word and supporting them. So he didn't back tax increases then. But his health care proposal last year included fee increases, which certainly can feel like taxes to those who are paying them. And in a larger sense, the governor's main prescription for the state's budget and infrastructure troubles -- a major general obligation bond in 2004, and a 2006 infrastructure bond -- are tax increases by another name.

Given the decline in the size and ambition of California's mainstream news media, it may be too much to hope for a public debate that goes beyond the question of whether Schwarzenegger is breaking his "no new taxes" promise. But a smarter debate -- and a better line of inquiry for reporters -- would be to examine if a tax increase is necessary. And if such an increase is necessary, what would be the best way to raise taxes? Specifically, at a time of economic downturn, what combination of taxes would be most likely to raise more revenue for the state government while doing the least damage to the economy? When it come to the budget, Schwarzenegger has had a myopic focus on budget formulas and spending-side reform. But for all his talk of wanting big ideas and big reforms, he has shied away from proposals for broad-based tax reform. (There were elements of this in the ill-fated California Performance Review, which Schwarzenegger established and then largely abandoned). How about a top-to-bottom rethinking of the state's entire tax system, which is a huge factor in the volatility of state budgets and spending? Are there some taxes that should be raised? Are there some taxes that should be reduced or eliminated? This shouldn't be a debate simply on the terms of the Democrats, since the process of asking questions about the tax status quo ought to make them uncomfortable. For instance, is California's income tax system too progressive for the state's own good? If Schwarzenegger really believes "everything should be on the table," then tax reform deserves a place somewhere -- perhaps near the gargantuan copy of the Encyclopedia of Modern Building -- inside his smoking tent. The budget crisis is an opportunity for California and its governor to think bigger.

What does all of this have to do with direct democracy? Given the two-thirds requirement for legislative approval of tax increases, certain Republican opposition, and the political difficulty of any tax reform, any increase -- or major reform -- would have to be kicked to the voters for approval. This is as good a time as any to start that debate -- and to get started drafting tax reform measures for the ballot.