Calbuzz Panel: Brown Must Scuttle Other Tax Plans

Dec7

The only way Gov. Jerry Brown can win approval of his November initiative to raise $7 billion a year over the next five years is if he can convince other forces who are planning to qualify tax measures to drop their proposals and unite behind his. And even then, the odds are about 50-50.

That’s the consensus of the California Consultanate – a collection of the smartest and most experienced political strategists in the state who are members of the Calbuzz Advisory Board of Leading Experts on Practically Everything.

Under Brown’s plan, income tax rates would grow by one percentage point for individuals making $250,000,one-and-a-half points for those making more than $300,000 and two points for persons making $500,000 a year or more. Also, the state sales tax would be raised by a half cent. Revenues would be dedicated to schools and public safety.

But at least three other individuals or groups are planning tax measures:

– The California Federation of Teachers and Courage Campaign would raise $6 billion by raising income taxes on millionaires.

–Civil rights attorney Molly Munger, who happens to be the daughter of Warren Buffett’s partner, would raise $10 billion by increasing income taxes, especially on the highest-income individuals.

– The Think Long Committee, a business and civic coalition, would raise $10 billion, largely by extending sales taxes to services.

“To have a chance, the governor needs to step up and convince others to withdraw their initiatives or hold them for a later ballot,” said one GOP member of the Calbuzz panel.

“Brown has to clear the field of the many potential other ballot measures that raise taxes,” agreed a Democratic panelist. “If he can do that he has a chance. But if there are several rival ballot measures on taxes, he will likely lose.”

Brown’s top strategist, Steve Glazer, wouldn’t discuss what negotiations the governor’s brain trust is having with backers of other potential initiatives other than to say he believes Brown’s proposal will enjoy a “good environment” next November.

But everyone knows the electoral calculus: In the history of ballot measures in California, “no” has beaten “yes” two-thirds of the time. And the default position for voters, when the ballot is filled with competing initiatives, is to reject them all by simply voting “no, no, no.”

The governor’s approval rating, right now, is 47%, according to the Field Poll – not great, but not too bad for a chief exec in a state where the Legislature is in budget gridlock and the economy is still lagging. At the same time, two-thirds of voters don’t want the automatic cuts to schools, public safety and other state services that have been negotiated as part of the current budget. So there’s an opportunity to argue, as Brown has and will, that the only way to break the GOP stranglehold on progress is for the voters to elect to temporarily increase their own taxes.

Here are some of the other responses from our panelists when we asked if Brown will be able to pass a tax measure next November.

Democrats:

– No, no and no. The reality of the governor’s proposal is that it raises taxes by $2.5 billion on working families through a sales tax increase – public opinion research has consistently shown that voters do not like raising the statewide sales tax. It isn’t $500,000 – that’s the governor’s spin on it. It is $250,000 for individuals, then $300,000 (1.5% increase) and then $500,000 (2%) increase. Polling has shown these numbers are too low and many voters will view this as hurting “small business owners” (and voters and the press tend to focus on the lower dollar amount – just ask Rob Reiner and his pre-school initiative). It says it will fund “education and local public safety” but in reading the measure, it is about as clear as mud as how it will do that, so much will depend on the title and summary that the Attorney General puts forward. To make it stronger, he should have focused on raising taxes on incomes over $1 million – that would give him a much better chance of winning.

– Yes, if he can get everyone else lusting after those tax revenues from millionaires to stand down. Focusing it on education and public safety connects with the top priorities of voters.  Making it temporary undercuts the critics.  Limiting it to the wealthiest Californians allows most voters to say yes because it’s their favorite kind of tax – a tax on some other guy.

– Voters in recent focus groups show surprising trust in Brown’s motives and give him benefit of doubt. If that holds up his plan could gain enough traction to pass. So yes it passes.

– 45-to-55 if there are other tax increase measures on the  ballot. 55-to-45 if his is the only one. Take that Grover Norquist

– Not unless he gets off his ass and puts forward a more aggressive, strategic public campaign than he did in a) the governor’s race, and b) when he supposedly took his case to the public after his months-long negotiation with Republican legislators failed to produce a single vote for tax extensions.  The latter involved a couple of random, hit-and-miss appearances, then he went MIA for several weeks because he had a band-aid on his nose. It’s not at all clear to me that Brown really understands how to wage a sustained public fight on such a difficult issue in the 21st century . . . Does this guy really have what it takes to pass a tax increase? Don’t bet on it. His approval rating is in the 40s and he has the attention span of a 5-year-old.

– The answer is no. He won’t get a pension reform plan in time, and the governor’s habit of starting late will mean anti-tax advocates will get a chance to define the tax measure as taking from job creators to support public employee pensions before the “yes” campaign even gets out of the starting blocks.

Republicans:

– Depends on the overall trade-offs he asks voters to make, depends on whether his natural allies will be there to support it financially.

– If the measure were the only tax increase on the ballot, I think he would have a better than even chance, given Obama’s likely margin in this state.  (In 2008, L.A. County passed a 1/2 cent sales tax for transportation, by a 2/3 vote, because of the Obama effect.)  But several other tax increase measures have been floated, and I think passage becomes doubly difficult with two tax measures, four times as difficult with three, etc.   Anger over so many “asks,” and the spending against a number of them, will activate that tried and true initiative voters rule of thumb:  when in doubt, or ticked off, vote “no.”

– Jerry’s odds are still pretty long, especially given how many tax measures will be on the ballot. If the ballot has as many measures on it as I think it will, I see confused, frustrated voters voting “no” on every single one of them.

– No. Voters have already said no to higher taxes without corresponding reforms or assurances that the new taxes would be used efficiently.  The Legislature is incapable of enacting any reforms that would achieve this prerequisite and the anti-tax lobby will have the resources to defeat the tax. Moreover, the effort to raise taxes could backfire and become a reason for voters to pass the Paycheck Protection initiative, which would ban corporations and unions from using shareholder dollars/union dues for politics.

– No. There likely will be several tax initiatives on the November ballot, which may doom them all . . . Specifically, the Think Long (aka Think Again or Think Wrong) ideas need to be scuttled. As well as the effort of Ms. Munger, whose motives are a mystery other than sibling rivalry. Still Brown has an uphill battle and will come up short.

– No. He hasn’t offered a reform oriented trade off for voters to believe it’s worth raising taxes.  He needs to pair it with a spending cap or something else that voters see goring public sector oxes a bit to have a chance.  That’s the political reality.


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There are 2 comments for this post

  1. avatar tegrat says:

    The way to get money into the economy in a just manner is to tax those who are holding huge amounts of cash: the wealthy and the corporations. Sales taxes are viciously regressive and don’t add new money to the economy – less wealthy people simply buy less. You can’t get blood from a turnip, but money can be extracted from those hoarding it. That is the purpose of taxation. It is not meant to be punitive, it is meant to implement policy that move the economy. When the economy is moving, you make the proper adjustments. All this BS about class warfare is simply used to divert the conversation away from being useful to being stupid. Grow up, Republicans.

  2. avatar chrisfinnie says:

    Good point.

    The GOP just extorted a whopper of a tax break for the biggest corporations in the state a few years ago. Let’s repeal that first. Then let’s go for an extraction tax on oil like they do in Alaska. It does wonders for their state budget. Finally, we really should do a split roll for property taxes. Hardly anybody who voted for proposition 13 did it to give a big tax break to corporations. We did it so retired people wouldn’t lose their homes. That’s how it was sold. I’ll bet few people realized it was a windfall for big business. And, in these days of occupy everything, more and more people are willing to close corporate loopholes like that one. It would be great timing, frankly.

    After that, then we should raise income taxes, but it should start at $500,00 as the Calbuzz know-it-alls suggest. And I can’t help but also agree that the gov. should have done this about a year ago–as I suggested then.

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