I learned a great journalistic method from Tom Wolfe and his 1979 book “The Right Stuff,” on the early space program. He went back and read the internal newsletters of NASA astronauts, engineers and others in the late 1950s and 1960s.
I used to subscribe to government union and other newsletters, but nowadays all these are online. Although intended for members, they’re not hiding anything. Perusing them shows their mentality when communicating with one another.
A revealing one is CCC Perspective, the newsletter of the Community College Council of the California Federation of Teachers. The October number naturally covers the election. Along with the other education unions in the state, the CCC-CFT forms a formidable voting bloc. The bloc includes not just teachers, but other unionized school workers, as well as spouses, children, other family members and friends. The total of several million voters easily can sway a state or local election.
“Prop 55. Essential to California’s Future,” blares the biggest headline on the newsletter’s front page. Subheadline: “Maintain tax rates on millionaires to fund education.”
That precisely highlights the main themes of the 55 campaign – and encourages community college teachers and others to advance the themes.
First theme: It’s “essential to California’s Future.” So it really isn’t about maintaining high teacher pay, perks and pensions. It’s about “California’s Future.” If taxpayers don’t provide the funding, our children will just turn out a bunch of dummies unable to sustain a high-tech economy.
But what about a 2013 study by California Watch on top-heavy community college administration? “The state’s 72 community college districts spend tens of millions of dollars on administrative positions that could be consolidated or shared by districts a short drive away, a California Watch analysis has found,” it found.
“In the wake of huge budget shortfalls, California’s vast community college system has reduced its core academic functions – slashing millions of dollars by eliminating nearly a quarter of class sections, cutting services and laying off employees. At the start of the fall 2012 semester, more than 470,000 students had been waitlisted for classes at community colleges statewide. But millions of dollars still are spent on duplicative administrative costs.”
As Joel Fox pointed out in the Rebuttal part of the 2012 Guide, “The politicians would rather raise taxes instead of streamlining thousands of state funded programs, massive bureaucracy and waste.”
Moreover, back in 2012, Proposition 30, which voters enacted in 2012, was sold as a temporary tax. From the pro-30 argument in the official Voter Information Guide mailed to voters by the Secretary of State: “temporarily…. temporary…. Temporary…. Temporary.”
Prop. 30 was supposed to just fill in the budget gap from the Great Recession. Piling on the tax increases once again defeats that purpose, baking in higher taxes and spending that only will cause problems during the next recession, requiring yet higher taxes to deal with new deficits.
Second theme: “Maintain tax rates.” This is not correct. Prop. 30 increased taxes about $7 billion through 2018-19. Then it ends. Prop. 55 is something new. You can see that because the sales tax part of the increase is dropped.
Suppose your employer keeps you on for another couple of years at the same salary, but cuts medical care because of Obamacare’s increased premium costs. (This has happened to me.) Does it “maintain” your previous contract, or is it a new contract? Obviously it’s a new one.
Third theme: The tax only is “on millionaires.” Actually, for single-filers, the Prop. 55 tax increase starts at just $263,000 a year. It’s incredible to non-Californians, but that amount still is middle-class here, albeit at the higher end of the middle class. In coastal areas, median home prices run $750,000 or more. The 9.3 percent income tax rate, itself staggering, begins at just $52,000 of income for single-filers. That’s a decent salary in Michigan or Ohio, but about all that amount of income buys you in the Golden State is a U-Haul rental to Vegas.
Although schools are spotty, even in some wealthy areas public teaching can be so bad you need to put your kids in a private school at a cost of $15,000-plus each per year. The sales tax is 8 percent even in conservative Orange County. Gas prices are at least 10 percent higher than the rest of the country.
Inside the CCC-Perspective, in the text of the article backing 55, teachers are informed, “The progressive tax approach of Prop. 55 is a way not only to help our underfunded education system, but also to address the underlying problem of inequality at its root.” That’s stoking envy straight from the 10 Planks of Karl Marx’s “Communist Manifesto.” Plank 2: “A heavy progressive or graduated income tax.” And let’s not forget Plank 10: “Free education for all children in government schools.”
The fact is right now the state’s economic engine, and its tax revenues, are revving high because of Silicon Valley’s record profits. But the next recession could hit next year if the Federal Reserve raises interest rates “relatively soon,” as the minutes from its Sept. 20-21 meeting suggest. A recession will hit tech companies hard. Prop. 55, if it passes, won’t bring in the expected revenues because profits will be way down, along with investor and executive salaries and capital gains. Despite, or because of, Prop. 55, we’ll be back to $20 billion-plus state deficits.
Companies and talent already are fleeing California. But during the next recession, even more will do so, seeking safer tax and regulatory climates, such as Texas, Nevada and Washington State, which have no state income taxes. The pro-55 propagandists don’t understand that rich people don’t spend their money only on yachts and Rolls Royces; although of course they do that.
The main thing rich folks do with profits is to re-invest in the companies they built and love, creating more jobs. Cut their incomes and capital gains with higher taxes, and they create fewer new companies and jobs, while seeking better business climes.
The “Communist Manifesto” was published in in 1848. Why is it still being followed 27 years after the Berlin Wall fell?
John Seiler has written about California for 29 years. His email: mailto:firstname.lastname@example.org