Governor Jerry Brown’s defense of labeling his tax initiative a millionaire’s tax on the initiative’s website summarizes California’s fiscal problems. It’s obvious why the governor calls his tax plan a millionaire’s tax when it actually starts taxing income at the $250,000 level, and, oh by the way, includes a quarter-cent sales tax. The reason is the millionaire’s tax label polls well.

Government by slogan has lead California off the rails.

The governor who campaigned that he would tell it like it is did not do that when reporters questioned him about the phrase on the website:

“The Schools and Local Public Safety Protection Act of 2012 is a Millionaires’ Tax…”

Brown’s response to the challenge from the press that the measure really can’t be called a millionaire’s tax if it increases taxes starting at $250,000 was that those taxpayers in question would soon be millionaires. All it takes is four years at $250,000, the governor said.

We’ll assume the governor was trying to put some dry wit into the discussion with reporters with his observation on the soon to be millionaires. However, if you can declare someone a millionaire after four years if they bring in $250,000 a year, taxes — those income taxes the governor wants to increase – will knock that total take for four years below the million mark.

Here is illustrated another problem with government take on finances.

Taxpayers will react to the disincentive of higher taxes by trying to shelter their income. The governor’s comment, dry wit or not, reflects static thinking on taxes that is practiced too often in Sacramento.  The dynamic effect of a tax increase could mean less revenue than anticipated after taxpayers move to protect their resources. It is also possible that some of the true millionaires might decide to reside someplace other than California.