taxes

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Bay Area lawmakers OK medical device tax repeal

Posted on by Josh Richman

Three Bay Area House members were among the 46 Democrats who joined with Republicans on Thursday to approve repealing the medical-device tax enacted as part of the Affordable Care Act.

As the Associated Press reports, the tax took effect two years ago and was designed to help pay for expanded coverage for millions of people. It’s levied on equipment like artificial hearts and X-ray machines but not on items used by individuals, like eye glasses. Foes of its repeal say that this and other taxes the law imposed on the health care industry were outweighed by added customers the law has created, and that repealing it means paying that $24 billion, 10-year cost with bigger federal deficits.

President Obama has threatened to veto the bill, which passed on a 280-140 vote. Reps. Eric Swalwell, D-Dublin; Jackie Speier, D-San Mateo; and Jerry McNerney, D-Stockton voted for it, while the rest of the Bay Area delegation was opposed.

“I support the Affordable Care Act and policies that improve our ability to conquer illnesses and diseases before they conquer us,” Swalwell said in a statement emailed later Thursday. “Today’s vote will help more start-up bio-innovation companies create devices that have the potential to make us healthier.”

McNerney emailed a statement saying that “medical research and technology contribute significantly to California’s economy with more than 75,000 jobs, and advancements in the field are resulting in new treatments and cures that improve the lives of people across the country.

“We should be doing everything to encourage further innovation by removing unnecessary barriers that hinder new research and job growth – especially in California, the home to more medical device companies than any other state in the nation,” he said. “As I’ve said before, this law is not perfect and we should continue to look at ways to improve it. Doing so will not only benefit medical innovation, but lower costs and improve care for individuals and families as well.”

Speier’s office said she was on a plane Thursday afternoon and couldn’t be reached for comment.

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House OKs permanent Internet access tax ban

Posted on by Josh Richman

Tuesday’s House voice vote on making permanent a ban on taxing Internet access was a rare moment of bipartisan rapprochement.

State and local governments currently can’t tax Internet access or place multiple or discriminatory taxes on Internet commerce; that ban is set to expire Oct. 1, but H.R. 235 permanently extends it.

Co-author Anna Eshoo, D-Palo Alto, spoke in favor of the bill on the House floor before the vote.

“At a time when affordability continues to be a key barrier to widespread broadband adoption, this bill reflects our commitment to universal broadband in America. According to a study by the Phoenix Center, an average tax rate of 2.5 percent on broadband could reduce subscribership by anywhere from five to 15 million people,” she said. This is a sensible, bipartisan and effective bill.

Speaker John Boehner, R-Ohio, issued a statement after the vote saying that “Americans are taxed enough already, and they shouldn’t have to worry about facing new taxes on something as important as access to the Internet.”

“The web is a powerful tool that fosters equality, education and opportunity,” he said. “This bill will help keep it that way and encourage economic growth by permanently shielding families and small businesses from higher costs. I applaud Chairman Goodlatte for his leadership on this issue.”

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SD7: Would they extend Prop. 30 taxes?

Posted on by Josh Richman

Orinda Mayor Steve Glazer says Assemblywoman Susan Bonilla flip-flopped on extending Proposition 30’s tax hikes to fund California’s schools, but Bonilla’s campaign said she has been consistent all along: She doesn’t support extending those taxes, but would support imposing new ones in their place.

The two Democrats are facing off in the 7th State Senate District’s special election, scheduled for May 19.

A new Bonilla campaign mailer that attacks Glazer for distorting her positions says she opposes extending the Prop. 30 taxes: “Glazer and his billionaire mega donor Bill Bloomfield are lying about Bonilla because they want to hide the fact that Steve Glazer was the ‘mastermind’ behind Prop 30, the $13.1 billion tax increase.”

The mailer follows that with a direct quote from Bonilla: “Steve Glazer and I both oppose extending Prop. 30.”

Bonilla

Josh Pulliam, Bonilla’s campaign consultant, said late Thursday afternoon that Bonilla has never supported an extension – whether by legislative action or another ballot measure – of Proposition 30’s taxes, and on several occasions has publicly corrected those who said otherwise.

She does, however, support a new, different, voter-approved tax hike measure to fund education in place of Prop. 30, he said.

Many apparently have been confused by this – perhaps including me.

In January, I reported on a TriValley Democratic Club forum at which Bonilla and then-candidate Joan Buchanan (who was eliminated in March’s special primary election) made their pitches.

Unsurprisingly, both said they would work to extend the Prop. 30 sales taxes and income taxes on the rich – due to expire in 2016 and 2018, respectively – in order to keep bankrolling education.

“The governor has made it very clear that the word ‘temporary’ means temporary, but … we need to go out to the people, I believe we can make the case,” Bonilla said. “There’s no way that you can get education on the cheap, it just doesn’t work.”

Contra Costa Times columnist Tom Barnridge wrote this after asking questions at a televised candidates’ forum in February:

What to do when Proposition 30 expires, ending temporary increases in sales and income taxes? Buchanan, Bonilla and Kremin would put an extension before voters. Glazer would let it expire because a temporary tax, he said, is meant to be temporary.

And the Lamorinda Democratic Club’s March newsletter recounted a Feb. 4 candidates’ forum thusly:

Susan Bonilla and Joan Buchanan favored extending Proposition 30 taxes, and a oil severance tax to continue to improve California schools—especially for the less fortunate. Steve Glazer, meanwhile, was against any new taxes and instead believed the government would have to live with the revenues it already receives.

Glazer campaign spokesman Jason Bezis said “there are more flips and flops in the Bonilla tax position than an amusement park roller coaster.

“She blindly supported a Prop. 30 tax extension in the primary, even though the promise to voters in 2012 was that it would be temporary. Now, in the general election, she flops away from it because that broken promise hurts her,” he claimed. “After this duplicity is uncovered, she flips yet again and says she wants to raise billions in new taxes, but just not ‘Prop 30’ taxes. You can see why voters are dizzy with Sacramento politicians like Bonilla. They have had enough of the political doublespeak.”

Incidentally, the Lamorinda Democratic Club – Glazer’s home turf – was scheduled to take an endorsement vote last week, president Katie Ricklefs said Thursday. But the vote was scrapped when a Glazer campaign operative cited a club bylaw – not updated since before the top-two primary system took effect – that essentially precludes the club from picking one Democrat over another in a general election. “We did a straw poll that showed 100 percent support for Susan, though,” Ricklefs said.

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And now, a bit of tax-board marijuana humor.

Posted on by Josh Richman

Best headline I’ve seen in a while on a government news release: “Cannabis Learning Tour Provides Tax Policy Insight into Budding Industry.”

Get it? BUDDING.

Hey, I know it’s not subtle, but most of the releases I see are utterly humorless.

Fiona MaThis one came from the Board of Equalization, announcing that members Fiona Ma and Vice Chair George Runner took a listening and learning tour through Humboldt County this week with leaders in the area’s cannabis industry. Up there in the “Emerald Triangle,” it’s a substantial chunk of the local economy. Ma and Runner sought perspective on the product, from seed to sale, to help shape tax policy; the release didn’t mention whether they inhaled.

“I am proud to be a part of these informational meetings as part of a broader effort to engage stakeholders who will play an integral role in the regulation of this industry,” Ma said in the release. “Our goal is to encourage this industry to come out of the shadows, to register, to become legal, and that is where we must find a balance for the future of our state.”

George RunnerRunner said the tour “provided helpful insights into how we can work with the medical marijuana industry to promote compliance with California tax laws. This is a growing industry [ed. note – pun intended?], but we’re currently missing out on a great deal of revenue that is owed to the state.”

State law requires medical marijuana sales be taxed at the local tax rate where the product is sold or will be used, so Runner and Ma want state and local governments get what they’re due.

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Reich visits Capitol on CEO pay, oil extraction tax

Posted on by Josh Richman

It’s Robert Reich day at California’s State Capitol.

No, there hasn’t been an official proclamation. But the former U.S. Secretary of Labor, now a UC-Berkeley public policy professor, will be under the dome Thursday to speak on behalf of two bills introduced by Bay Area lawmakers.

Reich is doing a news conference with state Sen. Mark DeSaulnier, D-Concord; state Sen. Loni Hancock, D-Berkeley; and California Labor Federation Executive Secretary-Treasurer Art Pulaski in support of DeSaulnier’s SB 1372, which would create a new corporate tax table that increases taxes on businesses with big disparities between the salaries of their workers and their CEOs. The bill is being heard Thursday morning by the State Governance and Finance Committee.

“For example, if the CEO makes 100 times the median worker in the company, the company’s tax rate drops from the current 8.8 percent down to 8 percent. If the CEO makes 25 times the pay of the typical worker, the tax rate goes down to 7 percent,” Reich wrote on his blog Monday. “On the other hand, corporations with big disparities face higher taxes. If the CEO makes 200 times the typical employee, the tax rate goes to 9.5 percent; 400 times, to 13 percent.”

“Pushing companies to put less money into the hands of their CEOs and more into the hands of average employees creates more buying power among people who will buy, and therefore more jobs,” he wrote. “For the last thirty years, almost all the incentives operating on companies have been to lower the pay of their workers while increasing the pay of their CEOs and other top executives. It’s about time some incentives were applied in the other direction.”

And, Reich will testify to the Senate Public Education Committee in favor of SB 1017 by state Sen. Noreen Evans, D-Santa Rosa, which would create an oil extraction tax to fund higher education, health and human services, state parks and more.

Reich endorsed a similar student-organized ballot measure effort last year, saying that using oil severance tax revenue for education “should be a no-brainer. It will only improve our schools. The real question is why California hasn’t done this long before now.”

The California Chamber of Commerce this month put both bills on its list of “job killers,” arguing they create barriers to economic development.

“The economic recovery is still the number one issue for Californians,” Chamber President and CEO Allan Zaremberg said when announcing the list. “These bills pose a serious threat to our economy and, if enacted, would dampen job growth in the state.”

Of Evans’ bill, Zaremberg said “an oil extraction tax will drive up consumer prices, push jobs away and upset a fragile economy that is showing strong signs of life.”

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Activists seek ‘Robin Hood tax’ upon Wall Street

Posted on by Josh Richman

Activists organized in part by the California Nurses Association rallied Friday at congressional offices in 22 cities – including four in Northern California – to call for a tax on Wall Street speculation to relieve economic inequality and address basic needs.

The Oakland-based union scheduled the events for Friday because it’s the 46th anniversary of the assassination of Dr. Martin Luther King Jr., who at the time of his death was amid a campaign for economic justice that included anti-poverty and worker-rights issues.

Supporters of HR 1579 – authored by Rep. Keith Ellison, D-Minn., and cosponsored by local lawmakers including Barbara Lee, D-Oakland; Zoe Lofgren, D-San Jose; Sam Farr, D-Santa Cruz; Jared Huffman, D-San Rafael; and John Garamendi, D-Fairfield – sometimes call it the “Robin Hood tax.”

The bill would levy a tax of 50 cents on every $100 of stock trades and smaller amounts on transactions of bonds and derivatives. Its goal to reduce harmful financial market speculation; discourage high-volume, high-speed trading; and slow down proliferation of complex derivatives while raising hundreds of billions of dollars per year for jobs, health care, education, the fights against HIV/AIDS and climate change, and more.

Several dozen countries have similar taxes, and the United States had one until 1966. Business leaders including Bill Gates, Warren Buffett, Paul Krugman, Joseph Stiglitz, Jeffrey Sachs, Robert Pollin, and Larry Summers have recommended adopting a financial transaction tax, and after Wall Street’s crash 1987, such a tax was endorsed by President George H.W. Bush and U.S. Sen. Bob Dole, R-Kan. And former Rep. Pete Stark, D-Fremont, carried a similar bill in 2010.

There’s no chance the Republican-led House will ever advance this bill.

Still, Northern California activists rallied Friday at the offices of congressmen George Miller in Concord, Mike Honda in San Jose, Ami Bera in Rancho Cordova and Jeff Denham in Modesto – three Democrats and a Republican, respectively.

“My patients are trying to heal from an illness or surgery and when they go home they are forced to make a decision between buying medication or food,” California Nurses Association co-president Malinda Markowitz, an RN at San Jose’s Good Samaritan Hospital, said in a news release. “That’s why I want Rep. Mike Honda to support the people of this community by supporting the Robin Hood Tax.”

The nurses’ union notes King once said, “This is America’s opportunity to help bridge the gulf between the haves and the have nots. The question is whether America will do it.”