Brown compromise may water down Millionaires Tax

At a rally March 5 that drew thousands to Sacramento, support for the Millionaires Tax was widespread

The Restore California campaign and Governor Jerry Brown's—the authors of two competing ballot initiatives that would both raise taxes to fund education—are in talks today. The two groups hope to strike a deal and agree on one measure.

“I think we’ll have a compromise measure that will be more progressive than governor’s current one,” said Fred Glass, communications director for the California Federation of Teachers (CFT).

The CFT, along with the measure's co-sponsor Restore California, have seen widespread support for their proposed Millionaires Tax. In its current form, the measure would raise taxes on the state’s highest income earners. California residents earning $1 million per year would pay an additional three percent in income taxes; those making $2 million or make per year would add five percent. 60 percent of funds raised would go towards education.

The proposed initiative would not raise taxes on anyone earning less than $1 million per year, and tax increases would be permanent.

Brown’s plan included a half-cent sales tax increase and would expire after five years.

But Brown has expressed concern that competing measures would mean defeat for any plan to fund education, and now a deal may be reached between the two parties.

The Sacramento Bee reports that the compromise measure may lower Brown's proposed sales tax increase to a quarter-cent and extend the tax increase to seven years.

But the deal could pose an organizing challenge. Polls have consistently shown majority support for the Millionaires Tax, and signature gathering is already well underway; if a new deal is reached, proponents would need to start fresh and may face only four to five weeks to gather more than one million signatures.

According to Glass, many lawmakers might have supported the Millionaires Tax in its original version if it hadn’t been for Brown’s competing version.

“Everybody wanted to support the governor. There was enormous pressure on the legislature, even those who were sympathetic [to the Millionaires Tax],” said Glass.

Details of a finalized compromise measure could be announced as soon as this afternoon.


High earners already pay most of the tax and it's led to a volatile system. When the economy tanks, those people make a lot less, and revenues dry up.

Posted by The Commish on Mar. 14, 2012 @ 12:21 pm

raise the highest level of CA income tax to about 15%. That is way higher than any other State, and remember that we already have the highest state sales tax in the land as well.

Even though I will not be affected by this, I cannot support income tax rates in the double digits. It effectively would be at the level of the federal taxes, but at least I can see what I get from the Feds.

We need a broader tax, not a narrow and complex one.

Posted by Anon-y mouse on Mar. 14, 2012 @ 3:29 pm

Sales tax is the most regressive form of taxation and is bad for small businesses. It should not be part of the package.

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