Millionaire tax backers join Jerry
After making major budget cuts in the last few years, California is trying to avoid further economic ruin by attempting what politicians in Washington, D.C. could not manage — to raise taxes on millionaires and billionaires.
The difference between the national and state levels is simple: the people of California, unlike Congress, can put the question directly to voters as a ballot initiative in November.
In fact, there are three competing proposals to do just that, coming from both the government and outside citizen groups and unions like the California Federation of Teachers.
Polls have shown support for these type of measures, but putting competing initiatives on the ballot could spell doom for the cause. That’s why Jerry Brown has urged the different groups to coalesce behind a single, compromise initiative.
This initiative would raise the sales tax by one quarter of a percent. In addition, income taxes would rise by one percent for individuals making $250,000 and couples making $500,000 a year, and 2 percent for individuals netting $300,000 yearly and couples pulling in $600,000. Finally, individuals making $500,000 and couples making $1,000,000 would see their taxes go up by 3 percent.
Technically not a millionaire’s tax in all respects, but close enough.
Thankfully, the new rates will not be permanent. The income-tax rate hike will last seven years, while the sales tax will end after four. That may not be enough, though, to appease business interests who assert that tax rates in California are already too high.
The hybrid agreement could, in theory, combine the support Brown had gathered for his proposal from the likes of unions, Indian tribes, and businesses, with its main alternative, which has done the best in polling.
Still, any agreement needs to be made quickly in order to obtain enough signatures to put the issue on the ballot this fall.