According to a recent article in the San Jose Mercury News, the American Federation of Teachers (AFT) is pursuing a possible ballot initiative to raise taxes YET AGAIN on California's millionaires. I certainly wish that the members of the American Federation of Teachers (AFT) would actually apply their math, economics, history, and critical reasoning skills. AFT is right. We do have a problem, but the problem is NOT that California's taxes are too low for upper-income earners.
First, a caveat: I am not now, nor have I ever been a "millionaire." However, in 2007, 2008, and 2010, I spent more on federal, state, and payroll taxes than all my other family living expenses COMBINED!
California ALREADY has the second highest marginal tax rate (10.3%) in the nation. Only Hawaii has higher marginal rates (11%). California's 2nd highest tax rate of 9.3% is the fourth highest in the nation behind Hawaii, California's top tax rate, and Oregon. California's 2nd highest tax bracket starts at 48,000 in income.
California ALREADY implements President Obama's so-called "Buffett Test." Capital gains in California are ALREADY taxed EXACTLY like ordinary income.
California's wealthy ALREADY pay the bulk of the state's income taxes. The top 2% pay roughly HALF OF ALL PERSONAL INCOME TAXES (PIT).
The top 33% minority ALREADY pays 94% of the entire Personal Income Tax load. Meanwhile, the bottom two-thirds supermajority contributes JUST 6%. But who has more voting power to raise taxes on the minority?
Similarly, the 33% minority contributes more than half of California's General Fund revenue.
California's upper-income taxpayers ALREADY pay a much higher effective tax rate than do the majority of Californians. I ask you, looking at the chart in the article below, who isn't paying their fair share?
Even though a majority of Californians pay a lower state income tax rate than do a small minority, California's overall state tax burden is ALREADY one of the highest in the nation.
California's high taxes ALREADY places the state at or near the bottom on a variety of business climate surveys. On one survey of 500 CEOs from around the country, California has ranked DEAD LAST as a place to do business since at least 2005! In another survey, 70.5% of respondents ranked California as the least favorable business climate in the U.S.!
http://www.aboutdci.com/wp-content/themes/dci/docs/Winning-Strategies-2011.pdf (See Appendix C).
Is it any surprise then that California also has the nation's second-worst unemployment rate?
AFT is #11 on the list of top all-time national political donors, giving 91% of their member's state-mandated contributions to Democrats, 0% to Republicans. Hmmm.
California's politicians kowtow to the unions. Even fellow career Democrats like former Assembly Speaker Willie Brown recognize this. As he stated in his article, "Jerry Brown won't challenge teachers union," ...
"No one knows the power of such unions in California better than Gov. Jerry Brown.
"You'll notice that even as he's proposed draconian cuts to health and welfare programs and the state's universities, and asked taxpayers to pony up extra for several more years, BROWN HAS BEEN CAREFUL NOT TO TOUCH TEACHERS.
"HE KNOWS GOOD AND WELL WHAT THE CALIFORNIA TEACHERS ASSOCIATION CAN DO FOR HIM - OR AGAINST HIM - IN AN ELECTION."Here's the ironic part of the story.
- BOTH the American Federation of Teachers (AFT) and the California Teachers Association (CTA) are tax-exempt 501(c)(5) organizations, according to Form 990 disclosures on file with the U.S. Government and with Guidestar.org.
- BOTH the American Federation of Teachers (AFT) and the California Teachers Association (CTA) derive the majority of their revenues from state-mandated union dues, paid by hard-working public school teachers.
- This begs the next obvious question: Who pays teachers' salaries? Naturally, these come from the taxpayer.
Instead of using their political clout on REAL solutions, the American Federation of Teachers (AFT) is wasting their member's dues and our time on yet more non-solutions. AFT, how about using your political clout on tax reform, spending reform, or pension reform? For too long, organizations like AFT have blocked prudent reforms in California and in Washington. Consequently, there are likely massive spending cuts coming as part of the Super Committee process, which likely means jobs cuts for AFT members and other public employees. AFT, if you refuse to be part of the solution, then by definition, you become part of the problem.