Our View: Attack of competing tax hikes
New year. Same old call to raise taxes in California. So far, there are six possible tax-increase initiatives that could be placed on the November ballot. Backers say they're supposed to prevent budget cuts to education and public safety because of the state's budget problems.
The best-known proposal is the $7 billion boost announced by Gov. Jerry Brown last month in his Open Letter to the People of California. This measure would raise sales taxes half a cent, and bump up income taxes on those making more than $500,000 a year by 2 percentage points. The top state income tax rate would go to 12.3 percent, it the highest in the nation.
Another proposal, sponsored by lawyer Molly Munger, would raise $10 billion through higher income taxes on most Californians.
The problem for the tax increasers is that voters might just shake their heads in disgust and adopt a "pox on all your houses" attitude. "It's possible," sayd Jack Pitney, who teaches politics at Claremont McKenna College. "The more tax increases on the ballot, the more edgy people will become."
Some education and business leaders are urging Brown to organize factions favoring tax increases around a single measure. Their letter to the governor reads, "To ensure that voters pass a measure in 2012, there needs to be only one education initiative, one that ensures major ongoing resources are exclusively for our schools, including early childhood education, along with real structural reform."
The "real structural reform" would include, "a student-centered finance system, ensure true transparency, enact significant workforce reforms, and make new investments to P-12 education through a statewide broad-based revenue source and lowering the voter threshold on local revenue." P-12 refers to preschool through 12th grade.
It's in the obvious interest of all the tax-increase forces to band together. "But never underestimate the power of ego," Pitney observed.
Another factor is that this is an election year that favors Republicans nationally. California remains a Democratic state. But Democrats may not back President Barack Obama as enthusiastically as in 2008.
"We just don't know what the shape of the electorate will be in November," Pitney said. "It looks as if President Obama will carry the state. But in a close election, he might not devote a lot of resources to California. Therefore, the Democratic turnout might not be particularly high." That would give an edge [in a tax-increase ballot battle] to Republicans and independents, who tend to be more anti-tax than Democrats.
Another factor is that voters may not want to spend more on California's public schools until major reforms are instituted. In November, scores from the National Assessment of Educational Progress found that California fourth-graders scored 46th among the 50 states. It doesn't make sense to pay more for something that isn't working.
Our position is that all these tax increases are misguided. A better idea is to cut waste and reform schools and state-worker pensions. The ongoing economic malaise already has forced long-delayed reforms, such as killing redevelopment agencies. Let the reforms continue and the tax increases be defeated.
