What’s it going to be – income tax, sales tax, service tax,
split roll property tax, oil severance tax, vehicle license tax or a
combination of these taxes? Which tax will those who plan to raise taxes
through a November ballot initiative choose?
Last Friday, Governor Jerry Brown told the Associated
Press, "We don’t have a clear path yet because you got to find
something that can win … I haven’t decided yet. People are meeting, though.
People are struggling."
Brown offered a possibility on which
tax he might support during a Las Vegas energy conference not so long ago.
He said that sales and income taxes could pass under certain circumstances … or
Time is running short for tax-hike advocates who want a
measure on the November 2012 ballot to decide on which tax the voters might back.
However, they seem to have a problem. Voters are telling pollsters they are not
happy with the idea of raising taxes.
Yes, there have been public polls that suggest a tax on
upper income taxpayers or on businesses might pass. Both of those measures are
sure to have strong campaigns opposed to such a move.
More importantly, in a state sitting on 12-percent
unemployment, taxing the high-end taxpayers and job creating businesses would
likely send California deeper into the economic sinkhole. Even Democratic state
Lockyer has warned that the high-end personal income tax may be at its
limit. Increasing the top rate of California’s progressive income tax could
have a negative impact on job creators, the treasurer said.
As reported in the Sacramento
Bee, the public employee unions that want higher taxes and some of their
Democratic Party allies are having trouble agreeing on which tax to pursue.
Of course, they may choose to solve their differences by
throwing all the taxes against the wall and see what sticks.
This is not a new phenomenon in difficult economic times.
During the Depression, California Governor Frank Merriam proposed a tax package
that would have nearly doubled the state’s existing revenue. The package
included creating a personal income tax, increasing the sales tax and taxes on
corporations and insurance companies, adding a tax on admission to movies and
plays and an oil severance tax. There was also a proposal to increase gasoline,
utility and tobacco taxes.
The governor got a new income tax, and raised sales and
corporation and bank taxes.
Now that President Obama is seeking a tax on millionaires
the chant of "tax the rich" gets louder. I wondered
on this page a month ago if the Obama administration sought a tax on the
rich would that undercut a similar effort in California. Now he is pushing
forward on that front.
Despite the administration’s move to tax millionaires, tax
increase supporters still believe their best shot at victory at the polls will
also be a tax on the rich plan for California.
If that is so, we should soon see the initiative authors
decide what level of income is "rich" for tax purposes.