Jerry Brown marries Millionaires; no stopping them now!


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Do you hear those wedding bells?

Everyone who cared about them – and there are so many of us – knew that they would be a hundred times better and stronger together.  And this was even during their Taming of the Shrew-like courtship, when it often seemed like they were both trying to kill each other.  But who is Petruchio here, and who is Kate?  Well, let’s look at the details of the nuptials.  No, let’s ditch this distasteful metaphor.

Sorry, it’s just the euphoria, the euphoria of knowing that one big obstacle to restoring the greatness that used to be California is suddenly out of the way.  I was – and my co-Occupiers are – big fans of the CFT’s’ Millionaires Tax initiative, finding it much more progressive than Jerry Brown’s revenue plan.  But I also knew that Jerry’s plan wasn’t so bad, that it would sure be better than NO revenue measure passing, and nothing passing is exactly what would have happened if both measures went onto the ballot.  So I was also a big advocate for achieving a compromise between the two measures – and now that has happened, almost exactly as I’d envisioned!  Let’s look at the details:

Sales Tax?

  • Jerry Brown’s original plan included a 1/2% sales tax, to last 5 years (till the end of 2017.)
  • Our Millionaires Tax plan had no sales tax, as we consider that unfair to the middle class and poor who bear the brunt of sales taxes.
  • The new deal cuts Brown’s tax in half – exactly what I’d suggested – for a 1/4% sales tax.  That’s not SO bad.  An extra nickel on a $20 purchase; an extra 25 cents when you shell out $100.  I think we can handle that, for a few years, to get California’s house back in order.  Don’t you?

Income Tax Hike on the Wealthy?

  • The way WE saw it, the folks who have benefited so spectacularly these last couple decades can afford to pay some more in income taxes like they did in the booming 50s, 60s and 70s, when California had an education system and infrastructure that was the envy of the nation – and the rest of us struggling folks shouldn’t have to pay more at all.  So we proposed our “Millionaires Tax” which would have raised taxes on income over a million by 3%, and on income over two million by 5%.  No tax hikes on anyone else.  Naturally this was wildly popular with most people;  and even some millionaires didn’t mind much.
  • Governor Brown, always an advocate for “paddling a little to the left, a little to the right,” and “spreading the pain evenly,” as well as not wanting to alienate the all-important business community, preferred a sales tax along with a tax hike on income over $250,000.
  • In this new compromise version, marginal personal income tax rates for individuals would be raised as follows:  $250,000-300,000 by 1% (to 10.3%)  …  $300,000-$500,000 by 2%  …  and $500,000+ by 3%.  That’s somewhat more progressive than what Brown originally had.  One of Brown’s criticisms of us is the volatility of depending on millionaires, whose numbers rise and fall with the economy;  this is probably better.

And for how long?

  • Brown’s original tax hike and sales tax were intended to last only five years.
  • Our Millionaires Tax was, like diamonds, intended to last forever.  Or at least until some future legislature or citizenry changed its mind.  We were kind of thinking, we don’t want to have to go through this all over again any time soon.
  • We convinced the Governor to extend his tax hike on the wealthy from five to eight years (till the end of 2019) – the small sales tax on the rest of us will remain for only five.

Allocation of the New Revenue

  • The Governor, with his overriding focus on balancing California’s budget and financial health, planned to direct the new revenue toward paying down our debt, so that NO NEW “TRIGGER” CUTS will be necessary to education etc.
  • We had said “to hell with that, we want to REVERSE the cuts that have already happened, and reverse them now!”  60% of the money we would have raised would have gone directly to K-14, CSU and UC, with the rest to local governments to restore cuts, BYPASSING Sacramento.
  • Well, Brown won on this, so maybe he is Petruccio and we are Kate.  But many serious economists – ones I trust – say he is right about prioritizing our fiscal health first – restoring cuts can come after – and we all know that “ballot box budgeting” as this state’s voters have engaged in for decades just ties the process up in even more knots.  Hopefully we can add an oil extraction fee into the mix soon, to reverse education cuts.

“Fairness”

Everyone, along with wanting great services and not wanting to pay more (the Two Santa Claus Theory) at least wants things to seem “FAIR.”  And there are those of us who think it’s fair for those who have benefited most in recent decades to pay to get us out of this ravine, and not fair to ask those who are suffering to pay more.  Then there are those (like our commenter TJLocalSA, and Governor Brown himself) who sincerely think that it’s only fair for EVERYBODY to chip in at least a little.

Those two groups of people need to find their common ground, because don’t forget – there’s a third, HUGE group of people off to the right, in a sort of bubble, who religiously believe that the only problem the state and nation have is over-spending and over-borrowing, and what we really need is NOT new revenue, but EVEN MORE CUTS!   Come on, we outnumber them, but we have to work together.

Supporters

  • The Millionaires Tax was put together by the California Federation of Teachers (CFT) which is the more progressive of the two big teachers’ unions, along with the Courage Campaign.  It was quickly joined by the feisty and effective CNA (nurses’ union), and I got Occupy Orange County to sign on – in fact it looks like most of the Occupy movement in California has gotten behind it.  Duh.  1% vs 99% and all!
  • Governor Brown’s measure won the support of the SEIU and the California Teachers’ Association (although many of their members preferred our plan instead.)  It also got the support of a lot of business interests, who hate taxes but want a healthy economy to work in, and feared our measure more than Jerry’s, and it won the promise of the Chamber of Commerce that they would attack us and not Jerry.
  • Now, with the compromise, I believe we still have all those unions.  Who are we going to lose on the right and the left?  Hopefully not too much, it’s yet to be seen?  Will businesses ditch this more progressive version, and attack it?  Will I lose some of my Occupy friends’ support, now that it’s no longer exclusively a “Millionaires Tax,” and all of us will have to pay a little sales tax?  Probably yes, oh well…

Other, remaining Questions

  • How much revenue can be expected with this new improved Brown plan?  The old Brown plan was estimated to bring in $4.8 to $6.9 billion a year;  the Millionaires Tax woulda done better at $6 to $9.5 billion.  Will the new plan get more, or less, or the same?  We wait with bated breath for the report from the Legislative Analyst’s Office on this burning question.
  • And finally, how will the new thing poll?  The “Millionaires Tax” polled from 60 to 70%,  Jerry’s was at 62% and then sunk down to a little above 50%.  People liked the sound of a “Millionaires Tax,”  but it’s not really going to be accurate to call it that any more.  But still the combining of the two will remove confusion from voters’ minds.  We shall see…

What To Do Now

I and some Occupy friends of mine, and hundreds of other UNPAID VOLUNTEERS across the state, worked our asses off this past month getting thousands of signatures for the Millionaires Tax.  Those signatures will now go in the trash.  Did we waste our time?  DOUBLE HELL NO!  The demonstration of popular support and volunteer enthusiasm dragged Jerry to the table to improve his plan.

Now we’re waiting for early April for the new improved measure to qualify and be ready for signature-gathering.  NOW the window will be very tight, to get the 807,615 signatures we’ll need by early May.  But now we have MONEY behind us – listen to me, Occupiers – now we’ll get over $2 per signature – the highest pay out there for sig-gathering.  No longer will we need to sacrifice our days to do the right thing, for free!

Good Golly Miss Munger!

Meanwhile, STILL mucking up the works is a THIRD SECOND revenue measure aiming for the November ballot, the “Molly Munger” initiative, backed by the state PTA and the eponymous billionaire-heiress civil rights attorney, which would raise EVERYONE’s income tax a little and put the money directly into reversing education cuts.  Molly’s measure has consistently polled badly, as most people don’t feel like paying more income taxes, but she continues to pour millions of her own money into qualifying it, and its presence on the ballot will muddy the waters and make it harder for us.

When will she get out?  How can we force her out?  She is endlessly wealthy and stubborn.  She’ll be able to qualify it with paid signature gatherers, and then we’ll have to put our money into a “YES on this, NO on that” campaign but it will still be confusing and make things more difficult.

Hey … wait a second.

WE got concessions from Jerry Brown by standing firm, WE got him to make his plan a lot more progressive, didn’t we?  What if Molly … hm … what if Molly agrees to get out, in return for a percentage of the new revenue going directly to reversing some education cuts?

Hey.  WE could get behind that.  You go, girl!  (Time’s running out though…)


About Vern Nelson

Greatest pianist in Orange County. Performs regularly with his savage-jazz quintet The Vern Nelson Problem, and at regular concerts at the Huntington Beach Central Library.