HECTOR AMEZCUA / hamezcua@sacbee.com

Bee file, 2011. Gov. Jerry Brown studies his notes Thursday before presenting his 12-point pension overhaul plan to a legislative committee.

More Information

  • • The income tax hike would apply to individuals earning at least $250,000 and joint filers earning at least $500,000.

    • Under current law, an individual making $750,000 would pay the state 9.3 percent of taxable earnings above $48,029.

    • Under Brown's proposal, that same individual would pay 10.3 percent of income between $250,000 and $300,000; 10.8 percent of income between $300,000 and $500,000; and 11.3 percent of income above $500,000.

Brown initiative seeks higher taxes to avoid deep school cuts

Published: Tuesday, Dec. 6, 2011 - 12:00 am | Page 3A
Last Modified: Tuesday, Feb. 26, 2013 - 8:16 pm

Gov. Jerry Brown asked voters Monday to increase taxes on sales and the rich in California, warning of damaging cuts without new money and blaming Republicans for partisan gridlock.

The Democratic governor's initiative would raise the statewide sales tax a half-cent and impose higher income taxes starting with individuals making at least $250,000 a year.

The plan would raise $7 billion annually for five years to shrink the state's deficit problem. The state's top budget analyst estimated last month that California must tackle a $12.8 billion deficit next year.

"The stark truth is that without new tax revenues, we will have no other choice but to make deeper and more damaging cuts to schools, universities, public safety and our courts," Brown wrote in what he dubbed "An Open Letter to the People of California," which he initially issued through his Twitter account.

Brown's proposal has two components. The half-cent sales tax would apply broadly; in most of Sacramento County, the rate would increase from 7.75 percent to 8.25 percent.

The income tax hike would apply to individuals earning at least $250,000 and joint filers earning at least $500,000 by imposing three new marginal tax brackets.

For example, under current law, an individual making $750,000 would pay the state 9.3 percent of taxable earnings above $48,029.

Under Brown's proposal, that same individual would pay 10.3 percent of income between $250,000 and $300,000; 10.8 percent of income between $300,000 and $500,000; and 11.3 percent of income above $500,000.

Brown joined a crowded field of tax proponents vying for the November 2012 ballot. At least five groups have filed proposals, including a left-leaning coalition led by the California Federation of Teachers and Courage Campaign that submitted a $6 billion tax on millionaires on Monday.

The governor promised during his 2010 campaign that he would agree only to higher taxes with voter approval. He asked Republicans last year to place taxes on the ballot, but talks broke down after disagreements on pensions and regulations. Labor groups also raised concerns that voter support was weak.

In his letter on Monday, Brown blamed GOP lawmakers for blocking his plan.

"I am going directly to the voters because I don't want to get bogged down in partisan gridlock as happened last year," he wrote.

Sen. Bob Huff, R-Diamond Bar, the Senate GOP point man on budget matters, responded, "We worked diligently to find a win-win. It's just they didn't like the answers we had," referring to pension cuts and softer regulations on businesses.

Voters have not passed a statewide tax increase since 2004, when they approved a one-percentage point income tax hike on millionaires to pay for mental health services. Tax proponents are encouraged by polls suggesting voters may be willing to support a tax hike that benefits schools.

© Copyright The Sacramento Bee. All rights reserved.

Read more articles by Kevin Yamamura



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