Click amount to donate direct to CounterPunch
  • $25
  • $50
  • $100
  • $500
  • $other
  • use PayPal
Support Our Annual Fund Drive! CounterPunch is entirely supported by our readers. Your donations pay for our small staff, tiny office, writers, designers, techies, bandwidth and servers. We don’t owe anything to advertisers, foundations, one-percenters or political parties. You are our only safety net. Please make a tax-deductible donation today.
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

2016 Fund Drive
Smart. Fierce. Uncompromised. Support CounterPunch Now!

  • cp-store
  • donate paypal

CounterPunch Magazine

minimag-edit

Weekend Edition
September 30, 2016
Friday - Sunday
Henry Giroux
Thinking Dangerously in the Age of Normalized Ignorance
Stanley L. Cohen
Israel and Academic Freedom: a Closed Book
Paul Craig Roberts – Michael Hudson
Can Russia Learn From Brazil’s Fate? 
Andrew Levine
A Putrid Election: the Horserace as Farce
Mike Whitney
The Biggest Heist in Human History
Jeffrey St. Clair
Roaming Charges: the Sick Blue Line
Rob Urie
The Twilight of the Leisure Class
Vijay Prashad
In a Hall of Mirrors: Fear and Dislike at the Polls
Alexander Cockburn
The Man Who Built Clinton World
John Wight
Who Will Save Us From America?
Pepe Escobar
Afghanistan; It’s the Heroin, Stupid
W. T. Whitney
When Women’s Lives Don’t Matter
Julian Vigo
“Ooops, I Did It Again”: How the BBC Funnels Stories for Financial Gain
Howard Lisnoff
What was Missing From The Nation’s Interview with Bernie Sanders
Jeremy Brecher
Dakota Access Pipeline and the Future of American Labor
Binoy Kampmark
Pictures Left Incomplete: MH17 and the Joint Investigation Team
Andrew Kahn
Nader Gave Us Bush? Hillary Could Give Us Trump
Steve Horn
Obama Weakens Endangered Species Act
Dave Lindorff
US Propaganda Campaign to Demonize Russia in Full Gear over One-Sided Dutch/Aussie Report on Flight 17 Downing
John W. Whitehead
Uncomfortable Truths You Won’t Hear From the Presidential Candidates
Ramzy Baroud
Shimon Peres: Israel’s Nuclear Man
Brandon Jordan
The Battle for Mercosur
Murray Dobbin
A Globalization Wake-Up Call
Jesse Ventura
Corrupted Science: the DEA and Marijuana
Richard W. Behan
Installing a President by Force: Hillary Clinton and Our Moribund Democracy
Andrew Stewart
The Democratic Plot to Privatize Social Security
Daniel Borgstrom
On the Streets of Oakland, Expressing Solidarity with Charlotte
Marjorie Cohn
President Obama: ‘Patron’ of the Israeli Occupation
Norman Pollack
The “Self-Hating” Jew: A Critique
David Rosen
The Living Body & the Ecological Crisis
Joseph Natoli
Thoughtcrimes and Stupidspeak: Our Assault Against Words
Ron Jacobs
A Cycle of Death Underscored by Greed and a Lust for Power
Uri Avnery
Abu Mazen’s Balance Sheet
Kim Nicolini
Long Drive Home
Louisa Willcox
Tribes Make History with Signing of Grizzly Bear Treaty
Art Martin
The Matrix Around the Next Bend: Facebook, Augmented Reality and the Podification of the Populace
Andre Vltchek
Failures of the Western Left
Ishmael Reed
Millennialism or Extinctionism?
Frances Madeson
Why It’s Time to Create a Cabinet-Level Dept. of Native Affairs
Laura Finley
Presidential Debate Recommendations
José Negroni
Mass Firings on Broadway Lead Singers to Push Back
Leticia Cortez
Entering the Historical Dissonance Surrounding Desafinados
Robert J. Burrowes
Gandhi: ‘My Life is My Message’
Charles R. Larson
Queen Lear? Deborah Levy’s “Hot Milk”
David Yearsley
Bring on the Nibelungen: If Wagner Scored the Debates
FacebookTwitterGoogle+RedditEmail
[i]
[i]
[i]
[i]