Boo on You, Millionaires

Sad times if you happen to be a millionaire. Nobody likes you and it doesn’t
matter that you earned your status through blood, sweat and tears (great band
BTW)… the bottom line is you have money and everyone else wants you to give
it to them.

There are going to be no less than five competing tax initiatives on the November 2012 ballot, almost all of which have the concept of taxing millionaires in their respective crosshairs. Rest assured, I have not suddenly become the apologist for millionaires. I just find it fascinating that all these measures should appear
at the same time.

And there’s nothing fancy about what they seek to do. It’s just plain old redistribution of wealth through progressive taxation.

Gov. Jerry Brown this week filed an initiative to increase taxes in an effort to cut the state’s budget deficit. The initiative, which is tied to local government realignment, is estimated to raise $7 billion though the projected budget shortfall next year is estimated to be $13 billion.

First, the Governor’s initiative seeks to increase the state sales tax by .005 (a half-cent) from January 1, 2013 through December 31, 2016, then to increase personal income tax on the state’s top wage earners as follows:

>$250,000 individual/$500,000 joint: 1% increase (to 11.3% marginal)
>$300,000 individual/$600,000 joint: 1.5% increase (to 11.8% marginal)
>$500,000 individual/$1,000,000 joint: 2% increase (to 12.3% marginal) 

FYI: The personal income tax hike would be retroactive to the full 2012 tax year through 2016.

Meanwhile, a group fronted by the liberal Courage Campaign and the California Federation of Teachers has proposed an initiative that would raise $6 billion for K-12 education solely by raising income taxes on Californians who earn more than $1 million a year.

Another proposal, backed by the state PTA, would raise $10 billion a year in new revenue by raising taxes on a sliding scale on nearly all wage earners, with the heaviest burden on the wealthiest. The money would go directly to local K-12 schools and early childhood education PLUS the measure forbids the governor and legislators from using the money or directing how it may be spent.

The Think Long Committee has a proposal to raise $5 billion more for public schools every year and billions for public universities and local governments by reshuffling California's tax code. It would lower the state's personal income and sales tax rates and create a new levy of more than 5% on services that are not currently taxed.

Then there's a very different tax increase initiative that uses Proposition 13.  The proposal would allow "nonresidential real property" to be assessed using its "fair
market value" starting in 2014. County tax assessors would revalue the property at least every three years.

It exempts commercial and agricultural land as well as single family and multi-family residences. The initiative would also, starting in 2016, exempt "the first $1 million of tangible personal property," which backers say will protect small businesses. Finally, the initiative would double the homeowner tax break and increase the tax break offered to renters.

Fortunately or unfortunately (depending on how you view these sorts of things), the California electorate has proven time and again that when faced with competing initiatives (or five) on the same subject, there is a tendency to vote "no" on all of them. Should be interesting to see if one wins the "Gouge the Millionaires" Sweepstakes.