The views expressed in any article published in this blog are the author's own and do not necessarily reflect the views of Joseph Foster or Bob Lupoli.

Thursday, March 15, 2012

Jerry Brown - Same Old Thing - Tax the Rich

Joe:  what many people don’t realize is California is already way over reliant on the wealthy to pay taxes. This is why we have huge swings in tax revenue. It always boom or bust. This article is so interesting because the LA Times is calling a spade a spade, York actually states, “…bowing to pressure from liberal activists..” and “In a deal with a union…”. Interesting stuff, see below. -Bob

In a deal with a union on his ballot initiative, the governor pares the sales-tax provision and hikes rates on the rich.
By Anthony York, Los Angeles Times
March 15, 2012   Reporting from Sacramento— 

Months ago, Gov. Jerry Brown won business and labor backing for an initiative that combined higher taxes on California's top income earners with a half-cent sales tax — a strategy he said would share the pain of addressing the state's budget woes.

But on Wednesday, bowing to pressure from liberal activists, the governor modified his proposal, agreeing to cut the sales tax hike in half and place a greater share of the burden on the wealthy.

Brown cast the revision as a strategic move to reduce the number of tax proposals voters may face on the November ballot — and increase the chances that the electorate will embrace at least one measure to provide a sorely needed revenue increase.

"This united effort makes victory more likely and will go a long way toward balancing our budget and protecting our schools, universities and public safety," Brown said in a statement.

The deal takes off the table a proposal, sponsored by the California Federation of Teachers, that had sought a special millionaires tax. It immediately drew criticism from political observers, who said Brown was tarnishing his carefully cultivated image of an honest broker who would not be moved by political pressure.

"It's a strong display of the governor's weakness," said Rob Stutzman, a GOP operative. "He gets his knees buckled by a backwater union. It's not even one of the powerhouses."

According to Brown's allies, the changes are fairly modest and the structure of the plan remains the governor's.

Brown had originally proposed raising income tax rates on those making at least $250,000 while increasing the state sales tax, which hits all consumers, by half a cent. Under the revised plan, sales taxes would go up by a quarter-cent and wage earners making more than $300,000 would have to dig even deeper into their pockets.

That formula would raise up to $2 billion more next year than under Brown's initial proposal. But revenues eventually would flatten out to the level of the earlier initiative, $5 billion to $7 billion annually, according to early analysis by Democratic aides.

"The governor's original measure was more difficult to pass," said Rick Jacobs, chairman of the Courage Campaign, a liberal group that had joined with the teachers federation in backing a millionaire's tax. "This one will be easier because we're all in it together and it's more progressive."

After a news conference at a Boeing facility in Long Beach to celebrate the new 787 Dreamliner, Brown was asked why it took him so long to reach a compromise.

"The life of politics is something that changes and evolves," the governor said. "I have no ego in this."

The 11th-hour nature of the deal brings with it a number of complications.

Brown has about six weeks to get the new measure on the ballot. That involves having the attorney general's office issue some necessary paperwork, receiving an evaluation of the plan from state finance officials and getting clearance from the secretary of state's office to gather the more than 1 million signatures needed — an expensive proposition.

As a safeguard, Brown's aides said, he would continue to gather signatures for his original measure. That led skeptics on Wednesday to predict that the governor could still decide to place his first proposal on the ballot, despite the deal.
Veteran signature-gatherers, however, questioned whether Brown could meet the deadline.
Michael J. Mishak and Nicholas Riccardi in Sacramento and W.J. Hennigan in Long Beach contributed to this report.

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