Dan Walters

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Dan Walters: California's tax-hike advocates may setting up circular firing squad

Published: Friday, Dec. 2, 2011 - 12:00 am | Page 3A
Last Modified: Monday, Apr. 16, 2012 - 11:41 pm

Those who believe that California should raise taxes – including Gov. Jerry Brown – to close its budget deficit or increase spending may be forming a circular firing squad.

Four major tax measures, all with well-heeled support and opposition, appear to be headed for the November 2012 ballot, plus a few lesser tax proposals. Voters could be subjected to weeks of confusing propaganda, and their response could be to reject everything.

The Think Long Committee for California – a group of political and civic figures and financed by billionaire Nicolas Berggruen – wants Californians to approve a sweeping tax overhaul that would extend sales taxes to services, simplify the income tax and generate about $10 billion more year.

Molly Munger – the daughter of Charles Munger, Warren Buffet's chief business partner – wants a sliding scale increase in income taxes to raise $10 billion a year for K-12 and preschool education.

Hedge fund manager Tom Steyer would indirectly boost taxes on out-of-state corporations doing business in California, by changing the way their taxable incomes are calculated, to boost spending on green energy by $1.1 billion a year.

Finally, Brown and his union allies will soon unveil a temporary sales tax hike and income tax surcharge on the affluent to raise about $7 billion a year to close the state's chronic budget deficit.

If they all make the ballot, not only will voters be bombarded by their advocates and opponents, but they create intramural rivalries.

Brown's allies in the public employee unions, especially the powerful California Teachers Association, dislike the Think Long proposal because it would shift the tax burden from higher-income taxpayers to those in the middle-income brackets – and because Think Long wants the schools to give up billions of dollars owed by the state. The Brown and Munger plans would be direct competitors.

It sets up a situation not unlike what happened in 2009, when then-Gov. Arnold Schwarzenegger and the Legislature placed a package of several budget and tax measures on a special election ballot. Voters reacted angrily at its complexity and rejected everything.

The 2009 package violated an unwritten rule of ballot measures, that they should be as simple – perhaps as simplistic – as possible because when voters are confused and uncertain about something, they're more likely to reject it.

The 2012 measures could create the same kind of confusion and play into the hands of anti-tax groups that would like to see everything die.

Obviously, the way to avoid that situation would be for Brown and others who want to raise taxes to make some sort of deal to present one relatively straightforward, poll-tested tax measure.

However, given the big egos involved, it's doubtful anyone has the stature to make that happen.

© Copyright The Sacramento Bee. All rights reserved.


Call The Bee's Dan Walters, (916) 321-1195. Back columns, www.sacbee.com/ walters.

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