With the fiscal cliff approaching, four dozen California millionaires have renewed their call for Congress to let tax cuts expire for America’s richest citizens.
The millionaires are part of the national group Patriotic Millionaires for Fiscal Strength, a movement of more than 200 Americans with incomes over $1 million a year calling for higher taxes on incomes of that level. They’re joining with The Action, a broad coalition of labor and progressive groups pursuing the same goal.
“The rich have done extremely well in America for the past 30 years and it is past time for them to begin paying more taxes to support better public services,” retired attorney Guy Saperstein of Piedmont, one of the millionaires, said in today’s news release.
Another of the millionaires, former Wall Street Executive and author Ken Morris of Ross, said “fiscal intelligence suffered while millionaires benefited from GOP intransigence on fair taxation for far too long.”
“For the sake of renewing middle class economic health, it is high time to undo those policies by allowing the Bush tax cuts on the wealthiest 2 percent of Americans to expire,” he said.
Hot on the heels of a poll showing support for altering Proposition 13 so commercial properties can be taxed at their current value, a Bay Area lawmaker says he’ll pursue exactly that.
The “split roll” property tax, in which all of Proposition 13’s protections for residential properties would remain but commercial properties would be regularly re-assessed, has been a goal of many Democrats for quite some time. But now, with a super-majority in both the Assembly and the state Senate as well as a Democratic governor, they may be in a position to actually do something about it.
A Public Policy Institute of California poll found majorities – 57 percent of adults, 58 percent of likely voters – favor such a plan; it’s supported by 66 percent of Democrats and 58 percent of independents, while Republicans are split (47 percent in favor, 48 percent opposed). The poll of 2,001 Californians was conducted Nov. 13-20; it has a 3.5-percentage-point margin of error for all adults and a 4-point margin of error for likely voters.
Assemblyman Tom Ammiano, D-San Francisco, announced this morning he’ll introduce commercial re-assessment legislation this session – not his first bite at this apple, but perhaps he’s feeling better about his chances.
“Prop. 13 is not the untouchable third-rail anymore. It’s more like the bad guy with the mustache who has tied California to the rails with the fiscal train wreck coming,” he said in his news release. “This year’s election, both at the federal and state level, shows that people recognize we have to improve revenue to maintain needed services. Reform of Prop. 13 is one possibility.”
Actually changing Proposition 13 would require another ballot measure, but Ammiano aims to reduce corporations’ ability to structure ownership to avoid having property reassessed when it changes hands. The change would not be a tax increase, he noted, but would increase needed revenues for education and other uses by taxing properties at their actual value, rather than leaving those values at artificially depressed levels.
“Corporations want to be treated as people when it suits them, as in the Citizens United case, but when it comes to paying their fair share of taxes, they are looking for a deal that real people – like you and your neighbor – can’t get,” he said.
Congress and the White House might be at loggerheads over how to address the “fiscal cliff,” but activists in California and across the nation aren’t letting any grass grow under their feet.
The Action – a broad coalition of labor and progressive groups demanding that the Bush tax cuts be allowed to expire for those making more than $250,000 per year – organized phone banks this past Saturday at 38 sites across California, including Burlingame, Daly City, El Sobrante, Los Altos, Martinez, Morgan Hill, Oakland, Palo Alto, San Francisco, San Leandro, San Lorenzo, Santa Clara, Santa Cruz, Santa Rose, Sebastopol and Walnut Creek.
The phone bank targeted California voters, who were urged in turn to call their representatives in Congress.
“For months, Republicans in Congress have held the middle-class hostage to tax cuts for the wealthiest 2 percent of Americans,” said a Friday e-mail announcing the phone banks. “The Senate has already passed legislation to keep middle-class taxes from rising, and it’s time for the House of Representatives to act. It’s time to set our priorities straight: Tax cuts for the wealthy means fewer Pell Grants, fewer Head Starts and more kids shoved into crowded classrooms.”
Former U.S. Labor Secretary Robert Reich, now UC-Berkeley professor, is helping to define the debate for Democrats (via MoveOn.org):
On Tuesday evening, members of the Sacramento Alliance of Californians for Community Empowerment will be out singing some special, re-purposed Christmas carols “to urge Congress to vote for middle class tax cuts without holding them hostage for tax cuts for the wealthy.” They’ll be at 16th and J streets at 6 p.m., performing for shoppers, commuters and people waiting in line to see former President Bill Clinton speak at the Sacramento Speakers Series – a friendly crowd, one would think.
National activism is afoot too: Several organizations are planning a Congressional Call-In Day this Wednesday, with a toll-free number, 800-998-0180, that will connect callers directly to their Congressional leaders. As the National Committee to Preserve Social Security and Medicare puts it, the goal “is to flood members of Congress with calls reminding them that Americans of all ages and political parties oppose cutting middle-class benefits to pay for deficit reduction. Our message to Congress is simple: ‘NO CUTS to Social Security, Medicare and Medicaid. They should not be a part of this deficit debate.’ ”
“We’re not broke,” said Hene Kelly the California Alliance for Retired Americans’ legislative director. “We’ve been robbed. If Congress wants to get our economy back on track we need to focus on additional investments in jobs and services that rebuild our economy. That means Congress must raise more revenue by making the wealthy and big corporations pay their fair share of taxes. Anything less would be a grand swindle of working people, not a grand bargain.”
California’s Franchise Tax Board announced this morning that it’s holding more than $14 million in returned state income tax refunds, mostly for taxpayers who moved and didn’t update their addresses.
“I want to make sure all taxpayers receive their refunds and as quickly as possible,” state Controller John Chiang, who chairs the FTB, said in a news release. “This is an easy way update your contact information and get the refund before the holiday season.”
Nearly 48,000 refunds, ranging from $1 to $35,000, were returned this year by the U.S. Postal Service. Here’s the breakdown for some Bay Area counties:
Alameda – 1,382 returns worth $442,000
Contra Costa – 730 returns worth $254,000
Santa Clara – 1,681 returns worth $590,000
San Mateo – 507 returns worth $159,000
Santa Cruz – 341 returns worth $63,000
San Francisco – 918 returns worth $497,000
Finding some awesome holiday gift deals on this Cyber Monday? They may not be quite as awesome as you think, Californians: You owe taxes on those purchases.
California law imposes tax not only on in-state purchases, but also on items bought out-of-state for use in California; this “use tax” has been law since 1935, to prevent out-of-state retailers from having a competitive advantage over California-based vendors who were required to report sales tax beginning in 1933. And the advent of online shopping hasn’t changed anything.
So if an out-of-state or online retailer doesn’t collect this tax for an item delivered to California, it’s the purchaser’s duty to pay it, based on the tax rate for the area in which they live.
There are two ways to pay any use tax you may owe: Register and pay on the state’s eReg website after each purchase; or pay it as a line item on your state income taxes, using the Board of Equalization’s and the Franchise Tax Board’s use-tax calculation based on your adjusted gross income.
The average California family owes about $61 in use tax each year, and the Board of Equalization estimates that California consumers and businesses failing to report and pay the use tax they owe costs the state more than $1.1 billion a year. Like sales tax, this money helps fund programs such as public education, public safety, and transportation.
The proponent of a proposed ballot initiative that would hike various taxes to fund California’s public universities and community colleges has been cleared to start collecting petition signatures, Secretary of State Debra Bowen said Monday.
Here’s the official title and summary prepared by the state attorney general’s office:
TAXES TO FUND CALIFORNIA PUBLIC UNIVERSITIES AND COMMUNITY COLLEGES. INITIATIVE CONSTITUTIONAL AMENDMENT AND STATUTE. Imposes new taxes on gasoline and diesel fuel ($0.025 per gallon), alcohol ($0.05-$1.65 per gallon), and cigarettes ($0.0125 each); raises vehicle license fees by 0.5% of vehicle market value. Allocates new revenues 80% to University of California and California State University, 20% to California Community Colleges. Maintains state funding for higher education at or above 2009-2010 levels and student financial aid at or above 2010-2011 levels. Caps student tuition and systemwide fees at 2009-2010 levels. Creates joint commission to recommend cost efficiencies in higher education. Summary of estimate by Legislative Analyst and Director of Finance of fiscal impact on state and local government: Additional state tax revenues from increases in various taxes of about $2.2 billion annually that would be dedicated to public universities and colleges. Depending on whether the new state tax revenues are sufficient to replace lost tuition and fee revenues (due to lower student tuition and fee levels), unknown effect on total funding for public universities and colleges. Depending on whether the new state tax revenues are sufficient to satisfy increased state spending requirements on public universities and colleges, unknown effects on other parts of the state budget and the state General Fund. (12-0015.)
Proponent Jesse Lucas – the California State University-Los Angeles Associated Students’ Legislative Affairs Committee Student-at-Large – must collect at least 807,615 valid signatures from California registered voters by April 15 in order to qualify this for the ballot in November 2014.
President Obama today announced he has invited congressional leaders from both sides of the aisle to come to the White House next week to discuss how to handle the tax increases and spending cuts now scheduled to take effect automatically in January.
“The year 2013 should be the year we begin to solve our country’s debt problem through entitlement reform and a new tax code with fewer loopholes and lower rates. The president has an historic opportunity to lead both parties in forging an agreement that averts the fiscal cliff in a manner that ensures 2013 will be that year.
“The increased tax rates that would be allowed under the Senate-passed bill are part of the fiscal cliff that economists are warning us to avoid. Those increased tax rates will destroy jobs in America by hurting small businesses across the country. Republicans are eager to get to work on an agreement that averts the entire fiscal cliff. The House has passed legislation to accomplish this vital goal. We look forward to joining the president next week and working to forge an agreement that will do the same.”
House Minority Leader Nancy Pelosi, D-San Francisco, responded:
“President Obama is exactly right: the American people voted on Tuesday for certainty for our economy and middle class families. Speaker Boehner and House Republicans can provide that certainty, and establish a sound basis for negotiations on comprehensive deficit reduction package, by taking up the Senate-passed bill to extend the middle income tax cuts. President Obama has his signing pen ready, and I am certain that, given the opportunity, Democrats in the House will vote to send the middle income tax cut to the President next week.
“President Obama reiterated today that we must work toward compromise to address our nation’s deficit, and we stand firmly on the side of a balanced approach. President Obama took this issue of tax fairness to the American people with great clarity, and the American people agreed with him. The wealthiest Americans must pay their fair share.
“The tax proposal that the President restated today is the right way to move forward, enabling us to start the conversation about a responsible, long-term deficit reduction plan. The President was clear in the campaign. The American people have spoken. Let’s sit down and get the job done. Every day we delay, adds to the uncertainty of the middle class. Let’s pass the Senate bill now and show the American people that people of goodwill can get the job done. We must.”
The Yes on Prop. 39 campaign sort of declared victory today, announcing it would pull its television and radio ads after hearing that the companies once opposing the measure will do so no longer.
Proposition 39 would close a loophole for multi-state companies, requiring them to pay taxes based on sales in California rather than allowing them to choose how they are taxed. The state would realize about $1 billion more per year in revenue if the measure passes. Thomas Steyer, founder and co-senior managing partner of Farallon Capital Management, has put up $21.9 million to bankroll the measure.
And it looks as if it worked. The committee backing Prop. 39 today said it has been informed by General Motors, International Paper and Kimberly-Clark that they won’t oppose the measure any further. Chrysler and Procter & Gamble, the two other companies that once were part of a coalition opposed to closing the loophole, also recently stated that they would not oppose Proposition 39.
Cal Berkeley researchers have launched a new website to explore how political knowledge can be spread rapidly across big populations using social media – and their test subject is one of this election season’s hottest issues.
The project, from UC’s CITRIS Data and Democracy Initiative, aims to develop a general-purpose system that can be used for a wide variety of issues, but for now it’s being tested on just one: Proposition 30, Gov. Jerry Brown’s tax-hike ballot measure.
Ken Goldberg, an engineering professor, said that “although the outcome of this vote has an enormous potential impact on students, alumni, teachers, parents and employers, many are not aware of Proposition 30. The California Proposition 30 Awareness Project aims to change that.”
Visitors to the website can learn about the ballot measure – a four-year, quarter-cent sales tax hike and a seven-year income tax hike for those making more than $250,000 per year – and receive a custom web link to share with whomever they please using email, Facebook or Twitter. They can return to the site later to see a unique graphic representation of their influence, and track their “influence score;” after the election, the website will list the 50 most influential people.
Influence is computed using a variant of the Kleinberg and Raghavan algorithm, where each visitor’s influence increases by one point for each person he or she recruits, by half a point for every person those people recruit, and so on. This model has been applied in many contexts with financial incentives, but researchers believe this is the first time it’s being tested with intangible rewards.
The researchers say the project and website emphasize awareness and are unbiased; the site includes links to the California Voters Guide and to campaigns on both sides of the issue. Visitors can also indicate their position for or against the proposition, and join an online discussion afterward.
“There are 47 percent of the people who will vote for the president no matter what. All right, there are 47 percent who are with him, who are dependent upon government, who believe that they are victims, who believe the government has a responsibility to care for them, who believe that they are entitled to health care, to food, to housing, to you-name-it. That that’s an entitlement. And the government should give it to them. And they will vote for this president no matter what…These are people who pay no income tax.”
“[M]y job is is not to worry about those people. I’ll never convince them they should take personal responsibility and care for their lives.”
So where are those 47 percent of Americans who pay no income tax?
The Atlantic has the answer, with data from the Tax Foundation. In California, 37 percent of residents pay no income tax, but that only ranks us 16th among the states:
(click to enlarge)
As the Atlantic notes:
This measures only those Americans who filed for taxes with no liability. Millions more didn’t even file; it’s those millions, added to the estimated 52 million here, who combine to make that 47 percent.
It’s important to remember that just because people aren’t paying income tax doesn’t mean they’re not paying taxes — they pay federal payroll taxes and state and local sales taxes, for example. Once those taxes are factored in, the tax regime is basically flat. And the reason that most income tax nonpayers don’t pay is they simply don’t make enough income to qualify to pay. As one might expect, the map of states with the highest poverty levels resembles this map fairly closely.