FacebookTwitterGoogle+RedditEmail

Jerry Brown’s Terrorizing Tactic

by ANN ROBERTSON and BILL LEUMER

Current political developments in California highlight the gaping chasm that divides the established political process – which is routinely mislabeled as “democratic” – with the positions embraced by the vast majority of Californians.

Unfortunately, California is to the United States as Greece is to Europe: both are fiscal basket cases. California has been suffering major budget deficits long before the Great Recession smashed the real estate bubble and drove it further into debt.  But the underlying causes of its chronic fiscal problems are seldom mentioned in the corporate media.

The Great Recession is surely a contributing factor. But more importantly there has been a steady shift of tax revenue away from corporations and the rich – the “people” who can most afford to pay – and onto the backs of working people.

In the late 1970s, for example, Proposition 13 was passed which limited property taxes for homeowners and corporations.  However, because of various loopholes, the proposition has been far more beneficial to corporations than to homeowners, resulting in a major loss of revenue for the state and a downward slide in corporate taxes.

Then in the 1980s the state inheritance tax was abolished, which constituted a huge boon to the rich. The New York Times reported (April 16, 2011, Elizabeth Lesly Stevens, “The Idle Rich Should Give Something Back: Taxes”): “Consider this: If each Californian could bequeath no more than $2 million, a 100 percent tax on the surplus estate assets would wipe out the state’s entire budget deficit.”

Even back in 2003 The New York Times was reporting on declining taxes for corporations across the country and particularly in California:

“Tax sheltering has cost states more than a third of their revenue from taxes on corporate profits, a new study showed yesterday, adding to the severe strain on state finances across the country.” And the article added: “In the 1980s 9 percent of corporate profits were paid to states. This number had declined to less than 6 percent by 2001…” (David Cay Johnston, The New York Times, July 16, 2003).

All these developments have coalesced to produce a perverse tax structure in California: the poor pay at the highest tax rates while the rich pay at the lowest rates. The bottom fifth pay at a 11.1 percent tax rate while the top 1 percent pay only 7 percent.

And these tax trends have in turn contributed to growing inequalities in wealth: during the past three decades the incomes of the wealthiest 1 percent of Californians grew by 81 percent while the income of the bottom 20 percent dropped by 11.5 percent (San Francisco Chronicle, April 1, 2011).

But on those rare occasions when politicians propose raising taxes to reduce the deficit, they fail to mention these staggering trends. Instead they engage in incessant clamoring about “shared sacrifice” and a “balanced” approach. With this as his mantra, Democratic Governor Jerry Brown initially proposed a temporary tax measure that would have raised taxes on everyone. It included a regressive one-half cent sales tax increase that would have burdened the poor far more than the rich and a mere 1 percent increase in the taxes on those making over $250,000 and a 2 percent increase on those making over $500,000.

But what Brown was not expecting was a fight-back mounted by one of the teacher unions. California Federation of Teachers (CFT) proposed its own ballot initiative – the Millionaires Tax – that would have only raised taxes on the rich by raising their rates 3 percent on those making over $1 million and 5 percent on those making over $2 million. Their initiative polled much better than Brown’s.

Under intense pressure, CFT’s leaders eventually capitulated and agreed to drop their initiative and instead opted for a dubious compromise version brokered with Brown. The compromise would reduce the sales tax to one-fourth cent and raise tax rates 1 percent on those making over $250,000, 2 percent on those making over $300,000 and 3 percent on those making over $500,000.

It is not clear this compromise measure will pass because of its ambivalent nature. It currently has the support of 56 percent of likely voters, 58 percent oppose “a key part of it – the quarter-cent sales tax increase (San Francisco Chronicle, May 26, 2012). When CFT’s Millionaires Tax was a contender and was polled, it had 62 percent support.

Thanks to the Occupy Movement, people are becoming increasingly aware of the growing inequalities in wealth and the underlying declining tax burden on the rich. Hence, they have offered strong support to initiatives that target only the rich and have rejected regressive taxes such as sales taxes.

And this tenuous support has led Jerry Brown to resort to his terror tactic, intended to strike fear in the hearts of the public.  He has told the people of California that if they do not support this new compromise tax proposal, then automatic trigger cuts will go into effect that will brutally slash the budget of public education on all levels. According to the same Chronicle article, this threat has evoked hatred: “They [likely California voters] also hate the automatic spending cuts to public education if voters reject the Brown’s tax plan. And we mean hate – 72 percent oppose these trigger cuts.”

If democracy ruled, the sales taxes would be reduced, taxes on the rich would go way up, and our schools and social services would be fully funded. But thanks to the influence of the 1 percent and the politicians they subsidize, the people of California are being terrorized into voting for a measure they actually in part reject.

Ann Robertson is a Lecturer at San Francisco State University and a member of the California Faculty Association.

Bill Leumer is a member of the International Brotherhood of Teamsters, Local 853 (ret.). Both are writers for Workers Action and may be reached at sanfrancisco@workerscompass.org.

 

 


Ann Robertson is a Lecturer in the Philosophy Department at San Francisco State University and a member of the California Faculty Association. Bill Leumer is a member of the International Brotherhood of Teamsters, Local 853 (ret.). Both are writers for Workers Action and may be reached at sanfrancisco@workerscompass.org

June 27, 2016
Robin Hahnel
Brexit: Establishment Freak Out
James Bradley
Omar’s Motive
Gregory Wilpert – Michael Hudson
How Western Military Interventions Shaped the Brexit Vote
Leonard Peltier
41 Years Since Jumping Bull (But 500 Years of Trauma)
Rev. William Alberts
Orlando: the Latest Victim of Radicalizing American Imperialism
Patrick Cockburn
Brexiteers Have Much in Common With Arab Spring Protesters
Franklin Lamb
How 100 Syrians, 200 Russians and 11 Dogs Out-Witted ISIS and Saved Palmyra
John Grant
Omar Mateen: The Answers are All Around Us
Dean Baker
In the Wake of Brexit Will the EU Finally Turn Away From Austerity?
Ralph Nader
The IRS and the Self-Minimization of Congressman Jason Chaffetz
Johan Galtung
Goodbye UK, Goodbye Great Britain: What Next?
Martha Pskowski
Detained in Dilley: Deportation and Asylum in Texas
Binoy Kampmark
Headaches of Empire: Brexit’s Effect on the United States
Dave Lindorff
Honest Election System Needed to Defeat Ruling Elite
Louisa Willcox
Delisting Grizzly Bears to Save the Endangered Species Act?
Jason Holland
The Tragedy of Nothing
Jeffrey St. Clair
Revolution Reconsidered: a Fragment (Guest Starring Bernard Sanders in the Role of Robespierre)
Weekend Edition
June 24, 2016
Friday - Sunday
John Pilger
A Blow for Peace and Democracy: Why the British Said No to Europe
Pepe Escobar
Goodbye to All That: Why the UK Left the EU
Michael Hudson
Revolts of the Debtors: From Socrates to Ibn Khaldun
Andrew Levine
Summer Spectaculars: Prelude to a Tea Party?
Kshama Sawant
Beyond Bernie: Still Not With Her
Mike Whitney
¡Basta Ya, Brussels! British Voters Reject EU Corporate Slavestate
Tariq Ali
Panic in the House: Brexit as Revolt Against the Political Establishment
Paul Street
Miranda, Obama, and Hamilton: an Orwellian Ménage à Trois for the Neoliberal Age
Ellen Brown
The War on Weed is Winding Down, But Will Monsanto Emerge the Winner?
Gary Leupp
Why God Created the Two-Party System
Conn Hallinan
Brexit Vote: a Very British Affair (But Spain May Rock the Continent)
Ruth Fowler
England, My England
Jeffrey St. Clair
Lines Written on the Occasion of Bernie Sanders’ Announcement of His Intention to Vote for Hillary Clinton
Norman Pollack
Fissures in World Capitalism: the British Vote
Paul Bentley
Mercenary Logic: 12 Dead in Kabul
Binoy Kampmark
Parting Is Such Sweet Joy: Brexit Prevails!
Elliot Sperber
Show Me Your Papers: Supreme Court Legalizes Arbitrary Searches
Jan Oberg
The Brexit Shock: Now It’s All Up in the Air
Nauman Sadiq
Brexit: a Victory for Britain’s Working Class
Brian Cloughley
Murder by Drone: Killing Taxi Drivers in the Name of Freedom
Ramzy Baroud
How Israel Uses Water as a Weapon of War
Brad Evans – Henry Giroux
The Violence of Forgetting
Ben Debney
Homophobia and the Conservative Victim Complex
Margaret Kimberley
The Orlando Massacre and US Foreign Policy
David Rosen
Americans Work Too Long for Too Little
Murray Dobbin
Do We Really Want a War With Russia?
Kathy Kelly
What’s at Stake
Louis Yako
I Have Nothing “Newsworthy” to Report this Week
FacebookTwitterGoogle+RedditEmail