Campaign 2012: It is Possible California Voters May Face Two Rival Initiatives to Raise Taxes - By Richard Markuson, PHCC Lobbyist

Editor’s note: One of the proposals is from Gov. Jerry Brown. It is not as far along as a different revenue plan put forth by a group of very wealthy individuals whose plan is due out soon. The coalition backing this plan goes by the name Think Long Committee for Calif. Here’s our analysis & commentary…

 

…Brown’s idea first. He’s still in the drafting stage. The Think Long group already has a 23-page report ready to be released very soon. Brown is tussling with several different options: the type of taxes voters might agree to; a temporary hike in the sales tax; and expanding the sales tax to products and services that are not now covered…

 

…And lastly, and most important, Brown needs to assemble a coalition of supporters (labor, business) to help raise money for such a campaign. And he needs to hire a campaign team…

 

…Think Long is further along with their deep pocket supporters. They have been working on this project for more than a year.. It’s bipartisan and includes former officeholders and many familiar names. Former Assembly Speaker Bob Hertzberg is a member of the committee. He’s a go-to guy and something like this appeals to Hertzberg. “As Washington is in gridlock, maybe Calif.. can lead the way again by showing that we know how to fix things,” Hetzberg told the Sacto BEE. Optimistic and upbeat…

 

 …The Think Long plan has huge backing from billionaire investor Nicolas Berggruen. He has agreed to put up $20 million dollars of his own. There are other deep pocketed individuals who also plan to help with the money…

 

…There are two parts to the Think Long proposal. One measure is aimed at an overhaul of Calif.’s tax system. This part of the plan could raise $10 billion dollars for the budget, according to a draft which the Sacto BEE obtained. The critical part of this plan is that all Calif. residents and visitors would pay sales tax on all services – except health care and schools – beginning in 2013. Part of these funds would help to erase bond debt and then go for schools…

 

…TheThink Long proposal would also simplify person taxes in 2014. Some people wouldn’t have to pay if their income was $45,000 for joint filers. A 2% tax on income between $45,000 and $95,000 and a 7.5% tax on those with income above $95,000. Deductions would be eliminated on everything except mortgage payments, property taxes, charitable contributions and R&D…

 

…Does this Think Long plan have opponents? The Calif. Republican Party is on record as opposed. CRP Chair Tom Del Beccaro issued a statement, saying in part, “Facing double-digit, structural unemployment, and its corresponding weak consumer purchasing power, those businesses won’t be able to simply pass on the tax increases to consumers and it will amount to a tax on those employers. In turn that will create more unemployment and lower revenues not higher.” Don’t know yet if the Calif. Teachers Assn. will support this. When Calpeek finds out, we’ll pass it to our readers…

 

…FYI: Where there are attempts to raise taxes, you’ll find Grover Norquist and his anti-tax pledge. Don’t think you’ll find too many Calif. GOP officeholders supporting either plan. It’s just to risky to cross Norquist. Stay tuned…