California Unions Compromise on Millionaires Tax
Posted in the Columbus Forum
#1 Apr 26, 2013
Paving the way for an uncluttered ballot in November, a California teachers union struck a deal Wednesday with Governor Jerry Brown that would combine a millionaires tax with a sales tax boost.
The state’s labor movement had divided over the best way to put the need for public investment before the voters. The California Federation of Teachers (CFT) and other unions had pressed for a stiff tax on millionaires and were gathering signatures to qualify it for the ballot.
But with backing from the Service Employees (SEIU) and the California Teachers Association (CTA), Brown put forward a competing ballot initiative he touted as “shared sacrifice.” Crafted to minimize opposition from business, the Brown measure would have hiked the sales tax and raised income taxes by 1 to 2 percent on earners over $250,000.
The state sales tax in California, at 7.25 percent, is already the highest in the nation.
The compromise announced Wednesday would cut the proposed sales tax increase in half, to 0.25 percent, while lifting the rates for top earners higher than Brown had proposed.
The income tax boost would last seven years, not the five years Brown had first put forward.
“The petition drive to get the millionaires tax on the ballot did have a real impact,” said Mike Parker, a retired union activist who had pushed for the tax with the Richmond Progressive Alliance.“It forced Brown to make a significant shift towards taxing the wealthy.”
The original millionaires tax initiative would have permanently raised rates by 3 percent for income over $1 million and by 5 percent for income over $2 million, garnering close to $16 billion the first two years.
The version agreed to this week would raise about $7 to $9 billion annually at first, state Democrats said, before tailing off to about $5 to $7 billion a year.
The money will head to the state’s general fund, disappointing education activists who noted that the millionaires tax initiative had set aside money for schools. The state faces a $9 billion overall budget gap.
“The governor’s proposal will cut further from education,” said Caitlin Fox-Hodess, a head steward in UAW Local 2865 at the University of California Berkeley.“The purpose of the millionaires tax was to have a separate fund for education and essential services.”
#2 Apr 26, 2013
I heard on the Colin Cowherd radio show yesterday that top earners in California (athletes, actors) only get to keep 37 cents of each dollar they earn due to fiscal confiscation through the illegal vote. That is enough of a reason to keep the illegals from voting permanently.
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