Thank You Proposition 30 Supporters!

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California state sales tax rates, before and after Proposition 30, compared to the state sales tax rate in 49 others states.

California state income tax rates, before and after Proposition 30, compared to the maximum income tax rate in 49 other states.

Top spenders supporting Proposition 30 tax hikes.  The top two spenders on Proposition 30 are also the top two spenders on California politics in general.  Both are public-sector employee unions as are many of the spenders on Proposition 30 tax hikes.  Many of these groups are also major contributors to the ruling California Democratic Party, another major spender on Proposition 30 tax hikes.

California rated 'F' on Kauffman small business sentiment survey.  California is one of only four states to receive an 'F' rating.  The primary reason cited was "Tax code."

California has the lowest overall state bond credit rating according to a report by the California State Treasurer (#50). Illinois was recently downgraded to below California by Moody's rating agency.

California was ranked the worst-run state government (#50).  The California Legislature has been ruled by the same party, the California Democratic Party for decades and holds nearly 2-to-1 majorities in BOTH Houses.

California was ranked the worst state for business for eight consecutive years (#50) by a nation-wide survey of chief executive officers.  This is the group that decides whether a business stays in California or whether or not to move a business to California.  The primary reason for California's low ranking is our tax structure and governmental regulation--both under the control of our state government.

California was ranked as the state with the least favorable business climate for ten consecutive years (#50).

California's 8th-grade public school students ranked #49 on the National Assessment of Education Progress (NAEP) reading achievement test according to the California Legislative Analysts Office. See "California's State School Rankings Are a Mixed Bag." California has the nation's highest public-school teacher salary and the ranks #49 on student/teacher ratio.

California's 8th-grade public school students ranked #48 on the National Assessment of Education Progress (NAEP) math achievement test according to the California Legislative Analysts Office. See "California's State School Rankings Are a Mixed Bag." California has the nation's highest public-school teacher salary and the ranks #49 on student/teacher ratio.

California ranked #48 on state unemployment--third highest in the nation and well above the national average.  California's unemployment rate remains stubbornly high despite California's fastest-in-the-nation job growth since June 2012.

California ranked #48 on business tax climate and has ranked near the bottom nationally since 2007.

California ranked #47 on state lawsuit climate.

California's 8th-grade public school students ranked #47 on the National Assessment of Education Progress (NAEP) science achievement test. California tied with Alabama and ahead of only Washington, D.C. and Mississippi.  Strangely, Proposition 30 champion Jerry Brown proposed eliminating the 2nd-year California high school requirement in order to save money.

California ranked #47 on economic performance.

California ranked #46 on small business survival.

California ranked #43 on affordable electricity costs--above the national average.

California ranked #42 on high school graduation rates.

California ranked #31 on per student spending in public schools, according to the California Legislative Analysts Office (LAO).  See "California's State School Rankings Are a Mixed Bag." California has the nation's highest public-school teacher salary and the ranks #49 on student/teacher ratio.

California is ranked the #2 most broadly and onerously licensed state for business.

California has the nation's 2nd-highest gasoline and diesel taxes in October 2012.  According to the Legislative Analysts Office (LAO), Proposition 30 will not affect gasoline taxes but will affect diesel taxes.

California has the nation's highest percentage of residents receiving Temporary Aid to Needy Families (TANF) welfare benefits--well above the national average.

California has the nation's largest population and the nation's largest percentage of undocumented immigrants according to the Pew Research Center on Immigration.

The undocumented immigrant population is estimated at 6.7% of the total California population, or about 1 out of every 15 people.

The Federation for American Immigration Reform (FAIR) estimates that undocumented immigrants cost California's public school system about $11.27 BILLION annually, or about double the funds provided by Proposition 30 tax hikes.

For Governor Jerry Brown So Loved Public Education ...

For Governor Jerry Brown so loved public education, he sought to eliminate California's 2nd-year science requirement to save money.  This came soon after California's 8th graders ranked near the bottom nationally on the National Assessment on Educational Progress (NAEP) test, just ahead of Washington, D.C. (with some of the nation's highest educational spending) and Mississippi but tied with Alabama.

"California budget proposal would end a science requirement:  Under Gov. Jerry Brown's revised budget proposal, a second year of science would no longer be required for high school graduation. The aim is to save the state money."

http://articles.latimes.com/2012/jun/06/local/la-me-science-schools-20120606

For Governor Jerry Brown so loved public education, he says he WILL NOT CONSIDER and THREATENS TO VETO any attempt to soften the blow of his "trigger cuts" to public education.  That's a little strange since he so rarely ever used his veto power against spending.  I guess we know where public education falls in his spending priorities.  Here are just a few examples.

"California Gov. Jerry Brown Signs $200 Million Movie/TV Production Tax Credit Extension"
http://www.hollywoodreporter.com/news/governor-jerry-brown-200-million-tv-movie-production-tax-credit-extension-375223

"Gov. Brown signs bill spending $2.6B on high-speed rail"
http://www.dailynews.com/news/ci_21102650/gov-brown-signs-bill-spending-2-6-billion

"Jerry Brown signs Dream Act for illegal immigrants"
http://www.sfgate.com/news/article/Jerry-Brown-signs-Dream-Act-for-illegal-immigrants-2327890.php

"Top-paid California legislative employees get pay raises"
http://www.sacbee.com/2012/07/20/4643546/top-paid-california-legislative.html

Californians, we've been played for suckers before.  Remember when 1984's Proposition 37 was going to solve education funding via the Lottery?  Remember when 1998's Proposition 98 was going to end the problem of funding public education?  Remember when 2000's Proposition 20 was going to solve education funding by better spending the Lottery money?  Proposition 30 is just another money-grab by an irresponsible California Legislature and Governor.

VOTE NO ON PROPOSITION 30.  Here's why.
http://soquelbythecreek.blogspot.com/2012/07/california-proposition-30-governor.html

New Jersey vs. California--The Governor Smackdown!

Recently, New Jersey's rotund and robust Governor Chris Christie and California's venerable Governor Jerry Brown entered into what might best be called a smackdown.  The entire escapade is somewhat funny given the horrible economic condition of BOTH states.  It's like the zombie telling the corpse that he stinks.

The battle began when Christie Christie, during a speech at the Republican National Convention, called Jerry Brown an "old retread" and a "bad choice".  Jerry Brown, despite his advanced age, shot back with a physical fitness challenge to the immensely obese Chris Christie, including a three-mile race.  Apparently, Jerry Brown misheard "physical" for "fiscal" fitness.

The real loser in this "Battle of the Governors" are the people of California and New Jersey.  Both California and New Jersey suffer from a variety of similar economic maladies and for similar reasons.

• Both California and New Jersey have among the nation's highest state income tax rates.  New Jersey's top income tax rate is 8.97% and starts at incomes over $500,000 (single taxpayer).  In contrast, California's second-highest rate is 9.3% and starts at incomes over $48,000 (single payer)!  California also adds a 1% surtax on incomes over $1 million, resulting in a 10.3%, which is second nationally only to Hawaii's top rate of 11%.
  
  California Governor Brown wants to raise California's ALREADY-high state income tax rates via Proposition 30.  Under Governor Brown's plan, those making over $250,000 would pay 10.3%, which is the rate currently only paid by millionaires in California.  Proposition 30 adds two new tax brackets, including an 11.3% bracket at incomes over $300,000 and a 12.3% bracket at incomes over $500,000.  Both new brackets are higher than any other state in the nation.  As before, the 1% surtax on millionaires would boost California's top income tax rate to 13.3%--a full 21% higher than the next highest state, Hawaii!

• Both California and New Jersey have among the nation's highest state sales tax rates.  California currently has the nation's highest statewide rate, although the combined state, city, county, and local rates in other states may be higher. Governor Brown's Proposition 30, if passed by California voters, would raise the state sales tax rate to 7.50%.

• California has the nation's highest gasoline tax.  Surprisingly, New Jersey's gasoline tax is relatively low--well below the national average.

• Both the California and New Jersey Legislatures are dominated by Democrats with close ties to powerful public-sector unions.  In California, public-sector unions are among the biggest spenders in California politics.  Both the Speaker of the California Assembly and the President pro Tempore in the California Senate have strong ties to California labor unions.  Perhaps unsurprisingly, California's public-sector unions are also major funders of Governor Jerry Brown's Proposition 30 tax hikes.

• Both California and New Jersey are union-only states, where some jobs in the public sector require union membership. In fact, Jerry Brown expanded collective bargaining for California's teachers.
• Both California and New Jersey have among the nation's worst-rated business climates. Both California and New Jersey duke it out for one of the "coveted" bottom five positions.

On the Kauffman Foundation survey of small business friendliness, California ranked 'F'--primarily for its tax code.  Proposition 30, if passed by voters, will no doubt lower California's already dismal ratings.

• Both California and New Jersey have unemployment rates well-above the national average. As of July 2012, California had the nation's 3rd worst unemployment rate at 10.7%.  New Jersey had the nation's 4th worst but is almost a full percentage point better than California.  California's unemployment remained steady from June-to-July while New Jersey's rate worsened slightly from 9.6% to 9.8%.

• Both New Jersey and California have low credit ratings, although California's currently ranks the lowest in the nation. Illinois has since been downgraded since this chart was created, but still ranks above California.

• California has the nation's largest population of Temporary Aid to Needy Families (TANF) welfare recipients, while New Jersey's TANF population is toward the low end nationally.

While California's Governor Jerry Brown in old and New Jersey's Governor Chris Christie is fat, neither state Governor can boast he has a beautiful economy.  However, in my opinion, Governor Brown is leading California in the wrong direction with his Proposition 30 tax hikes.  I encourage California voters to VOTE NO on PROPOSITION 30 this November.

California's Willie Brown on Pension Reform

Willie Brown is a distinguished, career California Democrat.  He was California's longest-serving Assembly Speaker, never to matched due to California's Legislative term limits.  He was also former Mayor of San Francisco.  The California Legislature recently passed a long-overdue pension reform bill that is a small, but necessary, step in the right direction.  Even with the pension reform legislation, California's public pensions are underfunded by tens of billions of dollars.  California taxpayers are on the hook to make up the difference.

Willie Brown has been open and blunt about the Legislature's role in California's poor condition.  Here's his latest his column in the San Francisco Chronicle.  Scroll down as there are multiple topic in his column.
http://www.sfgate.com/bayarea/williesworld/article/Eastwood-s-act-caught-GOP-off-guard-3834031.php

"As reforms go, the pension deal that Sacramento lawmakers reached last week is just a start to correct the mistakes that former lawmakers, including me, have made over the years. 

"But for all the talk about how the changes were needed to make the governor's tax plan [Proposition 30] more palatable to voters this fall, the fact is that lawmakers bucked the unions for one reason and one reason only: They want to keep their jobs.

"The unions are really bent out of shape because they weren't allowed in the room during the negotiations, as they usually are. But why should they be in the room?

"The world is changing. Years ago it was the likes of Southern Pacific and other big businesses calling the shots in Sacramento, and we were all highly critical of them.

"These days it's labor. That's not the portrayal union leaders like to see in the media, but it's the truth. 

"Real reform would be barring labor leaders from sitting on state pension boards. The boards ought to be made up of money managers who are concerned with how much cash is going in and out of the fund. There is no justification for any trustee on a pension board being more interested in spreading benefits than paying for them."

See also ...

• BLOG: Even Liberal Democrat Willie Brown Sees the Problem!http://soquelbythecreek.blogspot.com/2010/03/even-liberal-democrat-willie-brown-sees.html

• San Francisco Chronicle: Jerry Brown won't challenge teachers unionhttp://www.sfgate.com/bayarea/williesworld/article/Jerry-Brown-won-t-challenge-teachers-union-2528743.php
  
• Los Angeles Times: California Teachers Assn. a powerful force in Sacramento: The union, backed by an army of 325,000 teachers and a war chest as sizable as those of the major political parties, can make or break all sorts of deals.
  http://articles.latimes.com/2012/aug/18/local/la-me-cta-20120819

The Hollywood and Media Hypocrisy on California Proposition 30 and Possible Media Bias

Everybody loves higher taxes ... but only when someone else is stuck paying the bill.

Hollywood and media companies have ponied up big for Governor Jerry Brown's Proposition 30 tax hikes.  Here are the readily-identifiable contributions from various media companies to Californians To Protect Schools, Universities And Public Safety, A Ballot Measure Committee Supported By Governor Jerry Brown, which supports Proposition 30. That each media company contributed the same $100,000 makes it appear that this was part of an organized appeal campaign, organized either by the Governor's office or by the unions funding Proposition 30.

• CBS Corporation: $100,000 (New York)
• Disney Worldwide Services: $100,000 (California) (Disney owns ABC/ABC News)
• NBCUniversal: $100,000 (California)
• Sony Pictures: $100,000 (California)
• Viacom International: $100,000 (New York)
• Warner Brothers: $100,000 (California)
• Dreamworks SKG: $100,000 via individual donations from founders Steven Spielberg, David Geffen, and Jeffery Katzenberg
• Reed Hastings, CEO of Netflix contributed $1 million in support of Proposition 30.  However, he is also a major donor to many activities of the California Democratic Party.

Of course, Hollywood and the media will say that they just want to be "responsible corporate citizens" and ensure that everybody pays their "fair share," especially in these "difficult times" for the California budget.  This could be true, but don't forget that the media companies are first and foremost for-profit businesses with large public-relations staffs.

In the midst of massive multi-billion dollar California budget deficit and proposed tax hikes by the Governor, a California Assembly committee approved a bill for another $100 MILLION in tax credits for Hollywood and California media.  Of course, the fact that Hollywood and media are major contributors to the Democratic Party had nothing to do with it.  Democrats hate corporate welfare (unless you happen to be a major party donor). You scratch my back, I'll scratch yours (wink, wink).

Similarly, these same media companies also own major advertising-driven TV networks.  More than $20 MILLION has been raised so far to support Governor Brown's tax hikes, mostly from public-sector and trade unions.  Naturally, a good amount of that money will find its way back to the media companies as TV  political advertising, and that's just for Proposition 30.  Some companies also have outdoor billboard advertising, like CBS Outdoor.  NBCUniversal also own Spanish-language Telemundo.  Interestingly, California Democratic Party heavyweight, Haim Saban is executive chairman for Spanish-language Univision.  Saban is a major donor to the Democratic Party and is listed as one of the 50 most-influential California Democrats.

The two biggest spenders in California politics are the taxpayer-funded, public-employee unions California Teachers Association (CTA) and Service Employees International Union (SEIU), according to a March 2010 report by the California Fair Political Practices Commission.  Other public-sector and trade unions, traditional allies of the Democratic Party, are also major contributors to Proposition 30.  The unions spend big on TV advertising during every election cycle.  I'm sure the studio bosses see it as just good business to toe the party line.  You scratch my back, I'll scratch yours (wink, wink).

Let's not also forget that at least three of this group have "independent" "impartial" news networks, ABC/Disney, CBS, and NBCUniversal.  NBCUniveral has a number of news outlets, including NBC News, MSNBC, and CNBC.  I wonder how "impartial" coverage of Proposition 30 will be.

In full disclosure, I am a shareholder of Disney, a company I generally admire. But lets also not forget that the California Legislature just approved the latest California High Speed Rail plan involving $7.9 billion in state and federal spending.  Why does that matter?  One of the eventual stops on the high-speed rail is in Anaheim, California.  Why there?  Because that's where Disney's Disneyland and California Adventure theme parks are located.  You scratch my back, I'll scratch yours (wink, wink).

Meanwhile, California ALREADY has some of the nation's highest taxes.  Our high taxes, high costs, and ineffectual government have damaged our already ailing business climate, ranked near the bottom nationally, The California Legislature has given its staff a raise, approved additional educational spending for non-US residents, avoided a spending limit like the plague, approved an expensive high-speed rail plan that not even train lovers like, and debates just about anything other than public pension reform.  The California Legislature needs to stop the scratching and winking and perform their constitutional duty.

One of those duties it to debate tax reform and rates.  In the Legislature, tax hikes requires a 2/3rd majority as a protection for the 1/3rd minority of voters that pays the bulk of California's income taxes.  Meanwhile, Governor Brown's, union-funded Proposition 30 is purposely "electioneered" to circumvent the 2/3rd requirement.  Proposition 30 is an abuse of the democratic initiative process.

Californians, stop the obvious corruption in our political system and Proposition 30.  Vote NO on Proposition 30 this November.  You can learn more about Proposition 30 here.

http://soquelbythecreek.blogspot.com/2012/07/california-proposition-30-governor.html

See also ...

• California Gov. Jerry Brown Signs $200 Million Movie/TV Production Tax Credit Extension
  www.hollywoodreporter.com/news/governor-jerry-brown-200-million-tv-movie-production-tax-credit-extension-375223

Examining Governor Jerry Brown's Proposed Tax Increases

(Updated 27-MAR-2012)

NOTE:  This analysis is for Governor Brown's initial tax hike proposal.  Due to political infighting with the California Federation of Teachers (CFT), Governor Brown has modified his proposal to be more like the CFT's so-called "Millionaires Tax."  Essentially, the new plan has a smaller increase on sales tax revenues, has significant additional income tax increases on upper-income taxpayers, and extends the "temporary" increase to seven years.  A new analysis is in the works but all of the arguments against the increase still hold true. 

It looks like California Governor Jerry Brown is out with his proposed "fix" for California's budget shortfall.  Turning to his exhaustive play book of--how shall I say this politely?--one play, the Governor proposes tax hikes.  And this is from a Governor who sold the electorate on his vast political experience.

First, some background information.  California already has the nation's second-highest marginal tax rate of 10.3%, second only to Hawaii, at 11%.  Even California's 2nd top income tax rate is the nation's 4th highest, after Hawaii, California's top bracket, and Oregon.  California's 2nd top bracket starts at $48,000 in income for single taxpayers.

To fix the multi-billion dollar shortfall, Governor Brown proposes creating new state tax brackets and to increase taxes on those brackets by up to 21.5%.  The Governor's proposal would add the following new brackets.  The dollar brackets shown are for single tax filers; brackets for married filing jointly are doubled.

• Tax rates for those making less than $250,000 remain the same.  California would keep it's current 9.3% rate for those making more than $47,000.
• Income between $250,000 and $300,000 are taxed at 10.3%, which is the same rate currently charged for those making more than $1,000,000.
• Income between $300,000 and $500,000 are taxed at 10.8%.
• Income between $500,000 and $1,000,000 are taxed at 11.3%, which exceeds the highest marginal tax rate from any other state in the nation.
• Thanks to California's Proposition 63, those earning more than $1,000,000 are charged an extra 1% to fund mental health services--proving I guess that you must be INSANE to be a millionaire and have your tax residence in California.
• Unlike the federal government and many of its economic competitors, California treats capital gains exactly like ordinary income and taxes capital gains at the maximum applicable tax rate.  This means that California's budget greatly depends on stock market and real-estate returns on upper-income taxpayers.  The result is a watershed of revenue in good times and a drought during downturns.

The following chart helps to better compare the increased tax rates against those of other states.  (NOTE:  Oregon dropped their top rate from 11% to 9.9%)

The Governor purposely did not increase tax rates on lower incomes, perhaps in a nod to tax fairness.  After all, those making more than $300,000 only currently pay more than eight times more total tax and have an eight times higher average effective tax rate than the vast majority of other Californians.  The only thing lacking from the 1.9% of taxpayers is the votes at the ballot box to prevent more exploitation by the majority.

Those in upper brackets not only pay a higher effective tax rate, they also obvious pay far more in absolute dollars.  Those fortunate 42,517 taxpayers with incomes of $1 million or more paid an average of $304,553 in California income taxes with an effective tax rate of 8.97%.

In all fairness, all taxpayers, especially those at the lower-end of the income spectrum, will be hit by Governor Brown's proposed sales tax increase.  California ALREADY has the nation's highest sales tax rate.  Governor Brown will enshrine our first place finish by adding another 0.5% on top, not including the additional taxes charged by various California counties and cities.  This amounts to a 6% increase over current tax law.

Governor Brown's tax increase proposal will likely be popular with the two biggest spenders in California politics, the California Teachers Association (CTA) and the California State Council of Service Employees (SEIU).  Both are significant donors to the Governor's political party.  Furthermore, even fellow Democrats acknowledge that Governor Brown must kowtow to the teacher's union.

The bulk of any tax revenues is earmarked for education, which is already one of the biggest recipients of taxpayer dollars.

The big questions remain.  How will these proposed tax increases affect California's already damaged business climate--you know, the source for all that tax revenue.  California currently ranks at or near the bottom of various surveys, from multiple independent sources, for multiple years.

California's poor business climate and high taxation resulted in a net migration out of California.  According to the L.A. Times, the percentage of people from other U.S. states is the lowest it has been in a hundred years!  Because California's tax revenues are so dependent on very few, high-income taxpayers, small changes in taxpayer population can have dramatic effects on tax revenues.  Over 50% of income taxes come from less than 2% of the population.

Political columnist Dan Walters has a great summary message for those that oppose the tax increases.

Why should we pay more ...

• when we already have one of the nation's highest tax burdens,

• when the Legislature is handing out raises to its staff,

• when politicians haven't curbed rapidly increasing pension costs,

• when they're wasting billions on prisons, 

• when they've shunned a spending limit,

• when they've squandered money on a hapless bullet train project and unworkable computer systems, 

• when they're spending tens of millions on illegal immigrants' college educations, and 

• most importantly – when the state is mired in recession and 2 million-plus are jobless?

Well said, Mr. Walters!

Who's bankrolling the initiative?


Brown, Teachers, Business And Public Safety, Californians To Protect Schools, Universities And Public Safety, A Ballot Measure Committee Supported by Governor Jerry
www.electiontrack.com/lookup.php?committee=1343257

(as of 13-FEB-2012)

See also ...

• Governor Jerry Brown:  An Open Letter to the People of California (5-DEC-2011)
  www.jerrybrown.org/sites/default/files/GovernorsLetter12_5_11-1.pdf
• Governor Jerry Brown: The Schools and Local Public Safety Protection Act of 2012www.jerrybrown.org/sites/default/files/TheSchoolsandLocalPublicSafetyProtectionActof2012.pdf
• Sacramento Bee: California's high-income taxpayers dropped sharply
  http://blogs.sacbee.com/capitolalertlatest/2012/02/californias-high-income-taxpayers-have-dropped-sharply.html
• Dan Walters: Jerry Brown's tax plan tries easy political routewww.sacbee.com/2011/12/07/4104882/dan-walters-jerry-browns-tax-plan.html
• Soquel by the Creek: Who Pays Their "Fair Share" in California?soquelbythecreek.blogspot.com/2011/10/who-pays-their-fair-share-in-california.html
• Soquel by the Creek: American Federation of Teachers: Part of the Solution or Part of the Problem?
  soquelbythecreek.blogspot.com/2011/10/american-federation-of-teachers-part-of.html