#prop 30

New Post has been published on http://citizensjournal.us/new-tax-would-hit-services/

New tax would hit services

By Wayne Lusvardi

.

Republished with permission by Cal Watchdog.com

.

Tax reform is in the air. One proposal is by state Sen. Bob Hertzberg, D-Los Angeles, also a former speaker of the Assembly.

Senate Bill 8, the Upward Mobility Act, would raise $10 billion in sales and use taxes to replace the $7 billion Proposition 30 raised largely from taxes on the

Robert Hertzberg

wealthy. Prop. 30 was passed by voters in 2012 and was heavily supported by Gov. Jerry Brown. Prop. 30 expires in 2018. SB8 would take effect in 2019.

Oddly, SB8 largely would target such Democratic Party constituencies as professionals and service-sector businesses with more than $100,000 in gross income. Health care and education services would be exempted.

The money would be spent this way: $3 billion would go to K-12 schools and community colleges, $2 billion to the university systems, $3 billion to local governments and $2 billion to a new earned-income tax credit for poor families.

The reasoning behind SB8 was spelled out by columnist George Skelton:

“California is relying less on the sales tax, which applies only to purchased goods, while leaning heavily on the richest 1 percent, whose incomes fluctuate like a roller-coaster.

“In 1950, the sales tax generated 60 percent of all state revenue, the income tax just 10 percent. Today, the sales tax brings in around 25 percent, the income tax more than 60 percent.”

Under current law, the sales tax is applied to concrete items, such as a car or computer; food is exempt. The reasoning behind not taxing services is that what is offered – such as business consulting or legal advice – is intangible. Moreover, many such services easily could be outsourced to another state to avoid taxation – such as hiring computer programmers in Texas or India.

The services tax also especially would hit small- and medium-sized businesses, such as independent real estate brokers, auto repairmen and handymen.

Tax boost

By costing $10 billion to the $7 billion of Prop. 30, SB8 would be a 43 percent tax boost. And although the California economy is performing well now, it’s impossible to say how it will be doing four years from now.

A services tax also would encourage the growth of black markets. For example, in September the Los Angeles Times reported:

“Nine people were arrested in raids targeting 75 locations, and $90 million was seized — $70 million in cash. In one condo, agents found $35 million stuffed in banker boxes. At a mansion in Bel-Air, they discovered $10 million in duffel bags. 

“Federal officials said they believe that the drug organizations have used businesses throughout Los Angeles to convert their vast earnings into pesos, turning the city into a hub for ‘trade-based money laundering.’” 

People in black markets obviously don’t pay sales, income or other taxes.

GOP minority

Although Republicans remain a minority in both houses of the California Legislature, on Nov. 4 they gained enough new seats to prevent a two-thirds Democratic supermajority.

All Republicans are expected to oppose any tax increase of any kind.

So it’s the lack of a supermajority that would prevent SB8 from being passed.

Shift to non-profit economy

Oddly, SB8 is being advanced at a time when some tax-generating assets are being taken off the tax rolls, also benefiting the rich at the expense of everybody else.

One is the current shift of private electric utilities to non-profit municipal electricity-buying cooperatives, called Community Choice Aggregation.  Such cooperatives tout savings to customers for avoiding taxes paid by such regulated electric utilities as Pacific Gas & Electric, Southern California Edison and San Diego Gas & Electric.

Currently, 16 cities in the South Bay area of Southern California are planning to opt out of Edison and set up their own cooperatives, with the wealthy cities of Redondo Beach and Manhattan Beach leading the way. That will be lost corporate taxes to the state and property taxes for local government. Effectively, the wealthy people in those areas are sloughing off their tax obligations to those in other areas.

As reported by CalWatchdog.com, electric buying cooperatives not only avoid paying corporate taxes but offload expensive green power costs onto federal taxpayers by buying heavily subsidized green power and Renewable Energy Credits.

The long-term experience of the State of Illinois with electric buying cooperatives is that they show initial benefits to customers, but don’t make economic sense in the long term.

Assembly Bill 2145 of 2014 proposed to make it more difficult for cities to form electric buying cooperatives.  However, it died in the state Senate in September.

New Post has been published on http://citizensjournal.us/lao-no-fiscal-cliff-with-end-of-prop-30-taxes/

LAO: No ‘fiscal cliff’ with end of Prop. 30 taxes

By John Seiler

.

Republished with permission by Cal Watchdog.com.

.

Someone should come up with a T-shirt reading, “STAY CALM AND LET PROP. 30 END.”

Maybe sell it and make a few bucks for ya. At least before taxes.

California Legislative Analyst Mac Taylor’s recent “The 2015-16 Budget: California’s Fiscal Outlook” forecasts:

“the end of the Proposition 30 PIT [personal income tax] rate increases will not necessarily cause a sudden revenue dropoff—a ‘cliff effect’—for the annual state budget process. Because these rate increases expire at the end of calendar year 2018, it means that state PIT revenues essentially will include an entire fiscal year of Proposition 30 revenues in 2017–18, half a fiscal year of those revenues in 2018–19, and none of the Proposition 30 revenues in 2019–20. Accordingly, if the economy is growing at that time, as our main scenario assumes, then the expiration of Proposition 30 is likely to result in a slowing of PIT revenue growth in 2018–19 and 2019–20, but not an outright decline in PIT revenues.”

So, the main thing is to keep the economy growing. Such as, for example, not increasing taxes even higher by passing expected tax initiatives on the ballot in 2016 and 2018.

Or passing even more extremist anti-business legislation like AB32, the Global Warming Solutions Act of 2006, when — lo these eight years later — Weather.com reported on Nov. 22:

“There have been more than 400 record lows and record cool highs set, covering 43 states, since Sunday. That leaves only five states in the contiguous U.S., all in New England, that have not experienced record cold temperatures this week. 

“On Wednesday morning record lows were broken or tied from New York to Houston. Thursday morning 在线扑克 brought more record cold to parts of the Southeast.”

- See more at: http://calwatchdog.com/2014/12/05/lao-no-fiscal-cliff-with-end-of-prop-30-taxes/#sthash.RBZveUt2.dpuf

Smart – We just voted. So, I’m going to take this moment to look back at LAST year’s results on Proposition 30. Prop 30 was CA Governor Jerry Brown’s progressive tax increase – advertised as supporting public schools and social services (that had taken massive cuts in the state budget). Opposition said, Prop 30 did not guarantee that the funding would go to schools. Well, they were right. Fast-forward to the present, and Gov Brown wants to use the funds to expand the prison system! He is investing in future generations... assuming they’ll be better served by a prison than a classroom. Terrible. It's true, the Federal Courts have demanded that the Gov find a solution to our state’s prison over-crowding, but this isn't it. Why isn’t he focusing on releasing non-violent drug offenders into programs, instead of shuffling them to county jails or privately-owned facilities that are staffed with state prison guards? He’s broken the faith of the hundreds of community groups that rallied to pass an income tax increase (a VERY difficult proposition) by doing exactly the opposite of their intentions. Gov Brown has NO better solution or creative problem-solving skills? I find that hard to believe. Who wins, in this scenario? Not students, teachers, communities of color, or ANY voters. Who?

Art – One of the wonderful things about an artists’ community is collaboration! I accompanied my letterpress-printing friend to the studio that she works with for her trusted plate-making needs, and it was so cool! Logos Graphics (www.logosgraphics.net) is on Alabama, in the Potrero-y part of town, and the studio is abuzz with activity. I particularly enjoyed seeing their Heidelberg KS Cylinder press, all shiny and scored from sitting in a school’s storage unit for 25 years. Listen, I know nothing of letterpress printing - but my friend does: these are her people, they are wonderful, and there are dogs (what’s not to love?)! If you’re a letterpress print artist and/or looking for a place to have your plates printed or that fancy colored-edge cut on your paper. Hit up these folks. Apparently, Lars is a wonder-woman who works magic there, but I met John and he’s a gem.

"This refund is based on the Proposition 30 ballot initiative that voters approved in the November 6, 2012 election. As a result, the California State University implemented the tuition fee contingency plan that was previously approved by the Board of Trustees.  The California State University rolled back tuition fees to 2011-12 fee levels, retroactive to the Fall 2012 term."

LOS ANGELES (New York Times) — After nearly five years of brutal economic decline, government retrenchment and a widespread loss of confidence in its future, California is showing the first signs of a rebound. There is evidence of job growth, economic stability, a resurgent housing market and rising spirits in a state that was among the worst hit by the recession.

California reported a 10.1 percent unemployment rate last month, down from 11.5 percent in October 2011 and the lowest since February 2009. In September, California had its biggest month-to-month drop in unemployment in the 36 years the state has collected statistics, from 10.6 percent to 10.2 percent, though the state still has the third-highest jobless rate in the nation.

The housing market, whose collapse in a storm of foreclosures helped worsen the economic decline, has snapped back in many, though not all, parts of the state. Houses are sitting on the market for a shorter time and selling at higher prices, and new home construction is rising. Home sales rose 25 percent in Southern California in October compared with a year earlier.

After years of spending cuts and annual state budget deficits larger than the entire budgets of some states, this month the independent California Legislative Analyst’s Office projected a deficit for next year of $1.9 billion — down from $25 billion at one point — and said California might post a $1 billion surplus in 2014, even accounting for the tendency of these projections to vary markedly from year to year.

A reason for the change, in addition to a series of deep budget cuts in recent years, was voter approval of Proposition 30, promoted by Gov. Jerry Brown to raise taxes temporarily to avoid up to $6 billion in education cuts.

By Nikya Harris

Advertisement for Proposition 30

Students protesting

Castlemont High School is always judged by the bad things that happens in our school community. Proposition 30, which passed in the recent election, works to improve schools like Castlemont.  The proposition seeks to protect schools and local public safety,  by temporarily increasing personal income taxes on the highest earners.

If we had more after school programs, and educational programs then our school would be a success. The passage of Prop 30 gives our kids hope.

 According to the online source www.calaborfed.org, “Prop 30 gives Californians a real opportunity to take a stand for schools and public safety. Prop 30 is the only initiative that will protect school and safety funding, while addressing the state’s budget problems.”

  11th grader Carla Lee said that, “People with more resources and money always manage to succeed" but us, the poor people, “never really get the chance to chase our dreams.” Lee also said that, “Not only Castlemont, but other Oakland public schools will benefit from Prop 30, it will give our young teens a better shot at chasing their dreams”.

 According to www.calaborfed.org, “ Schools and community colleges will lose over half a billion in funding …... students attending the University of California would see tuition increase by 20%" if Prop 30 did not pass.

 Former Merritt College student Joean Harris said that, “Things have totally changed since I was in school.  Getting into community college wasn’t nearly as hard as it is now a days."  Harris continued to state that “Prop 30 is just what Oakland needed.  Young teens need that extra push to complete high school and Prop 30 is that extra push that they need."