Thursday, October 11, 2012

I have a proposition for you and it's a bad idea...

and it's called Proposition 30.  It's a tax increase that involves temporarily raising income taxes on the wealthiest Californians and raising the sales tax on all of California.

It's the pet project of Governor Moonbeam, who deliberately created the multi-billion dollar shortage in school funding in the current year's budget to drum up support for this ill-conceived notion.

The commercials are misleading and downright dishonest, at least those in support of it.  These ads claim the money will go directly to the schools and that politicians can't touch these funds, meaning they can't be directed elsewhere.  Nothing could be further from the truth.  The truth is found in the non-partisan Legislative Analyst's Office which wrote:  "This measure’s additional tax revenues would be available to help balance the state budget through 2018–19. The additional revenues from this measure provide several billion dollars annually through 2018–19 that would be available for a wide range of purposes—including funding existing state programs, ending K–14 education payment delays, and paying other state debts. Future actions of the Legislature and the Governor would determine the use of these funds."

So the money isn't locked up for the classroom and in fact the Governor and the Legislature can use it to fund any program they desire to fund.

Unions for teachers and other government employees are supporting Prop 30 because they know that some of the money it raises will go directly to helping to fund their underfunded pension liabilities.  They don't care about the negative impact on raising California's already high taxes.

One ranking of tax burden by state shows California as the state with the 15th highest tax burden for its residents.  That means that the combination of state income, sales, property and other taxes combined are higher in only 14 of the other 49 states, and that study was made before the last increase in state sales tax.  We may have cracked the top ten by now.  Proposition 30 will only make things worse.

Governor Brown is the one behind this.  The opposition is being led by Charles Munger Jr., son of Charles Munger who is the #2 man at Berkshire-Hathwaway behind Warren Buffet.  Munger, and his sister Molly are very active in CA politics and spending lots of the money their father gifted them with on their issues.  Munger Jr. is behind Prop 32, which I'll be looking at later.

But in this case the agenda is clear.  Taking money out of the pockets of Californians to allow more profligate spending by the elected leadership.  I'm voting no.  I suggest you do the same, but I totally respect your right to form your own opinions and make your own choices.  I'm merely trying to provide information.