Saturday, March 19, 2011

Opposing Tax Increases on the California Ballot - UPDATE 2

Governor Jerry Brown's plan to combine tax increases with some spending reductions appears to be popular:
A Field Poll released this week showed that 61 percent of voters, including 56 percent of Republicans, want the state to have a special election on the budget. Fifty-eight percent of voters say they would favor extending the temporary taxes.
This poses a difficult question of principle for me. Normally, I am in favor of forcing tax increases to have a public vote. However, I don't think that the public understands that public pensions are not part of the package that the governor is offering. In a little reported upon survey, Californians overwhelmingly support pension reform. From Bloomberg:

California voters support limits on public-employee pensions by a 3-to-1 margin, according to the Field Poll.

Seventy-three percent of those surveyed favor a cap on the amount of salary used to calculate pension benefits, compared with 20 percent opposed, according to the statewide survey by Field and the University of California, Berkeley, released today. Forty-two percent said the pensions are “too generous,” up from 32 percent two years ago.

Right now, the Democrats need a few Republican votes to extend for five more years the one-cent increase in the state sales tax, the ½ percent increase in vehicle license fees and the ¼ percent increase in personal income taxes that the state enacted in 2009. That's quite a few extra taxes, that cost the average family $1000 per year.

I believe the Republicans should demand concessions on pensions before this goes to a vote of the public. But I would like to know what you think? What is the principled position here? Should Republicans use their limited power to push for pension reform as the price to be paid for putting tax increases on the ballot? Please take my poll.


I forgot to mention that I had cross posted this article In the rostra comments, the ever reliable tax-fighter, Richard Rider, provides some additional facts:

Previously, a family with two children received a state income tax credit of $638. Under the “temporary tax increase” package, that credit is slashed to $196 — an effective annual tax increase of $442. For a middle class family suffering in today’s economy, that $442 is a MAJOR tax increase.

Moreover, this 2009 increase, along with the income tax rate increase, EXPIRED on 1/1/2011. Brown’s proposal is not an EXTENSION of the old income tax increase — it is a NEW “temporary” tax. Hence if voters REIMPOSE this expired tax, all the withholding will have to be done in the last half of the year, which will hammer modest income families the worst.


Also, W.C. Varones let me know that the Income tax hike expired Jan 1, so that is a pure tax increase. The media and the governor continue to portray the measure as a tax extension, but that is obviously not true for the income tax.

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