Monday, February 6, 2012
Tax the Millionaires
by Duane Campbell
California needs additional revenue to fund schools and to invest in the future. A tax plan known as The Millionaires Tax has been proposed by the California Federation of Teachers and the Courage Campaign to increase revenues to pay for vital services. It was assigned the official title "Tax To Benefit Public Schools, Social Services, Public Safety, And Road Maintenance," on Friday, Feb.2, by California Attorney General Kamala Harris.
A report of the California Budget Project notes that “measured as a share of family income, California’s lowest-income families pay the most in taxes. The bottom fifth of the state’s families, with an average income of $12,600, spent 11.1 percent of their income on state and local taxes. In comparison, the wealthiest 1 percent, with an average income of $2.3 million, spent 7.8 percent of their income on state and local taxes.”
The Millionaires Tax plan, of the California Federation of Teachers and the Courage Campaign would raise taxes by three percentage points on income above $1 million and five percentage points on income over $2 million. Analysts say the proposal would generate $4 billion to $6 billion annually. Signature gathering for the plan will begin within weeks.
The plan competes with Gov. Jerry Brown's tax initiative, which would raise income taxes on earners starting at $250,000 for single filers, as well as increase the statewide sales tax by a half-cent.
The proposals have divided the labor community . CFT and the California Nurses Association are backing the "millionaires tax," while the California Teachers Association and Service Employees International Union State Council are backing Brown's proposal.
CTA supports tax fairness but claims there are unspecified problems with the California Federation of Teachers proposal. Depending on how taxes and bonds are raised, the governor might not have to repay some $2 billion already owed to the schools under the terms of Proposition 98.
The governor wants the other campaigns to stop their efforts and join his coalition to support a budget that continues the severe budget cuts of this year and then raises sales taxes by ½ cent temporarily on all residents for the next four years, thus it costs working people and the poor more. The governor’s proposal would raise some $5 to $7 billion dollars per year. The governor also proposes as yet un legislated cuts to pensions for public employees citing “abuses” or a pension system the state can not afford. The most often cited “abuses” are from police, fire, and correctional officers and high ranking administrators who can and do retire with substantial benefits in their early 50’s.
Political analysts worry that if two or three tax measures make it to the ballot, all of them will fail.
The Governor’s proposal is only a temporary tax, the state problems of underfunding of schools and social services remains. Progressive unions ask why should we raise taxes on working people and the middle class through a sales tax when they are struggling to make ends meet while protecting the tax breaks of the rich? Civil rights attorney Molly Munger is backing yet a third $10 billion income tax measure.
CFT donated $500,000 last week to back its signature-gathering efforts on the Millionaires Tax. "We are prepared to spend enough to get a million signatures," said Glass the communications director of the California Federation of Teachers. Advocates for the CFT measure argue that their measure moves in the direction of changing the tax code so that it is fair to the 99 %.
The California economy needs roads, bridges, telephone lines, communications systems, energy and quality education. These services make prosperity possible. Conservative opposition to these services ignore the economy’s need for infrastructure. Prosperity depends upon having a viable educational system and a well functioning infrastructure. Rather than invest in the future, the Republicans and Brown have starved public education.
Polling consistently shows that the California voters are willing to pay for a quality public education system. The Brown proposals avoid giving the voters a choice on this.