Wednesday, March 14, 2012

Gov. Brown's confusing Tax plans.

Governor Brown‘s competing initiative, on the other hand, is typical of his “canoe” philosophy of governance, where he “rows a little to the left, and a little to the right.”  Governor Brown believes that we should ALL “share the pain,” even though most of us can’t take much more.  Governor Brown’s plan would raise taxes on those making $250,000 and over, and raise a sales tax on all of us for the next five years – sales taxes overwhelmingly affecting the poor and middle class. Brown has for weeks tried to convince backers of the so-called millionaires tax - along with supporters of a third competing tax increase proposal - to hold off on their tax plans and allow his to be the only one on the November ballot.He’s got, like I said, the more conservative SEIU and CTA behind his measure, although their rank and file disagree, and he also has some big business interests backing him, along with much of the Democratic Party leadershipThe new proposal would be a hybrid of the two. It would increase the sales tax by a quarter of a cent instead of Brown's proposed half a cent. Personal income tax would go up by 1 percentage point for individuals making $250,000 a year or couples making $500,000 a year. Individuals making $300,000 a year or couples making $600,000 a year would see an increase of 2 percentage points. And, individuals making $500,000 and couples making a $1 million or more would see a tax raise of 3 percentage points.What if BOTH these measures passed?  The framers of the Millionaires Tax considered that possibility, and allowed for it when they wrote their measure, having no problem with a walloping windfall of $13 billion a year for the next five years.  But then the Governor, aiming to please his big business backers who hate the Millionaires Tax, did not reciprocate.  So the two measures ARE now in conflict – only the one which gets the most votes will go into effect.Thirdly, to confuse things even more, we have the “Our Children, Our Future” initiative being pushed by civil rights attorney Molly Munger (daughter of billionaire would-be Republican reformer Charles Munger.)  This would raise just about EVERYBODY’s income taxes, for a total of 5 billion which would all go to K-12 education and early childhood programs.  Here’s a chart that compares the three different plans:  (click it for bigger PDF, easier to read)The huge tax increases proposed by Gov. Jerry Brown are becoming much less popular as voters learn more about them. At the rate of decline in popularity over just the past two months, there may be no one left in California who will vote for the higher taxes by the time November balloting arrives, save, of course, Mr. Brown and the principal beneficiaries, public employee union members to whom he panders.Meanwhile, an analysis by the state Board of Equalization, which handles state business taxes, has weighed the impact of the governor's higher taxes and found them quite costly. The proposed half-cent sales-tax increase alone would "cost Californians thousands of jobs and millions of dollars in lost investment," says board member George Runner, a Republican.
My question to Jerry Brown and our state legislators is: "Where is this $65 million for the Dream Act supposed to come from? How can we possibly afford this new entitlement program while California is in the midst of a fiscal crisis?"
Any taxes levied on the rich will not be paid by them but by YOU the consumer either by higher priced goods or services or by scaled back employment as the rich shift their investments around which means scaling back on hiring to reduce expansion in order to fall under the scope of any knew tax aimed at them"Temporary" in CA means permanent. Government will spend what they can take. Anyone who thinks this is about paying down deficits will be sorely disappointed. Next, this is a recipe for business owners and high earners to change their permanent residence to states with lower taxes (I will be one of them). Finally, it won't solve the problem. "Taxing the rich" to accomodate 50% of CA residents who pay no tax (yes, it's true) is not a sustainable solution. It's purely a political one.

No comments:

Post a Comment