Millionaire's tax on its way to California ballot?
Posted: 10/18/2011 06:01:37 AM PDT
SACRAMENTO -- Occupy Wall Street protesters may be long gone by November 2012, but labor leaders are hoping that voters' anger toward the wealthy won't be going anywhere as the election season unfolds.
For that reason, the California Federation of Teachers and a coalition of liberal allies are moving forward with plans to place a millionaires tax measure on the ballot next year. Millionaires, in this case, are defined as individuals whose annual income is $1 million or more.
Josh Pechthalt, the president of the 100,000-member teachers union, said the monthlong protests that have spread around the globe have bolstered his group's plan to tax millionaires, which has been in the works since the beginning of the year.
He's hoping to sell other labor groups and Gov. Jerry Brown on the plan to boost tax revenues for schools, colleges, social services and other programs, but he says his group will move ahead without them if they're not ready to catch the tax-the-rich wave.
"With the Occupy Wall Street actions, the American public is being educated on the disparity that has gotten so profound, the crisis that has gotten so bad," Pechthalt said. "We're committed to this and we want to convince others it's much needed and the right time to do it."
The teachers union can expect a big, expensive fight if it continues its push to tax the wealthy, said Jon Coupal, president of the Howard Jarvis Taxpayers Association.
"In the polling we see, there is no appetite for additional taxes of any kind," Coupal said. "Labor groups aren't going to ask me for permission, and they can do what they want. But they've got an uphill fight. The trend is toward fiscal conservatism."
Coupal called the Occupy Wall Street protesters a "bunch of trust fund babies who need a reason to protest," adding that labor groups are fueling the rallies.
The 1 percent of the American population being targeted by protests pay 40 percent of U.S. income taxes, and the top 10 percent pay 70 percent of taxes, said Carl Guardino, president and CEO of the Silicon Valley Leadership Group.
"At what level is the right level when they are already paying most of the taxes?" Guardino asked. "I'm also worried about divisive talk that pits Americans against Americans rather than pulling us together."
California voters have approved a millionaire's tax before: in 2004, they voted for a 1 percent surcharge on the income of millionaires to fund mental health programs.
The political arm of the teachers federation earlier this month gave the OK to move ahead with a millionaires tax, though they haven't determined yet how big of an increase they would seek.
Whether the tax rate on millionaires' income would jump from the current 9.3 percent to 11 or 13 percent, the state would get billions in new revenues, going directly into specified services such as schools, colleges, health care, social services and parks, rather than into the general fund budget, Pechthalt said.
This weekend in Los Angeles, the larger and more politically potent California Teachers Association's state council will decide on their strategy for a 2012 tax initiative. The California Labor Federation is also nearing a decision.
"Folks are taking a wait-and-see approach to see which approach the governor is taking," said Steve Smith, spokesman for the California Labor Federation. "The clock is ticking, but there's still time to figure out things."
To get a measure on the November 2012 ballot, backers of an initiative drive must begin gathering signatures by January, which means they will have to lay out their plans by the end of October so they can begin raising funds for signature gathering.
Brown has said he too wants to place a tax initiative on the ballot, but he's hoping to limit it to one that won't provoke a costly fight with business and anti-tax groups. The governor assembled a coalition of business, labor and other groups to back a measure to extend taxes on purchases, income and vehicle license fees but was rebuffed by Republican legislators.
"The governor knows the issues and will choose the course he thinks is best and the most honest way to address the need for revenues," said Gil Duran, Brown's spokesman. "He believes in doing what is possible."
What was not likely a few months ago may be more possible in coming months as Democrats amp up for the 2012 elections. President Barack Obama has begun a more full-throated call for taxes on the wealthy. The Democratic-led U.S. Senate called for a 5.6 percent tax increase on millionaires in its recent jobs proposal. And the message of Elizabeth Warren, the Democratic candidate for U.S. Senate in Massachusetts who spoke of the social responsibilities of the wealthy to give back, has gone viral.
"I do think the American public is angry, dissatisfied with where things are and this tax the rich movement is growing and it couldn't be happening at a better time," said Pechthalt. "If we can help build this movement, we'll be in a good position to move this tax initiative."