An odd way of raising taxes

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webmaster | 09/17/12
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Where else but in California, where legislation by ballot box is so common, would three tax increases — Propositions 30, 38 and 39 — appear on the same ballot at a time when tax hikes are likely to less popular than usual among the voters.

Prop. 30, which Gov. Jerry Brown says would help to close the state budget deficit, carries with it a warning: If it doesn’t pass, certain “trigger cuts” will occur, greatly curbing state spending. Schools and corrections budgets would suffer most. It would raise sales taxes slightly, and would tax the incomes of the wealthy at a higher rate than at present.

Brown says he is willing to spend $30 million to get Prop. 30 passed.

Prop. 38, sponsored by wealthy civil rights attorney Molly Munger of Los Angeles, would raise income taxes on most Californians, and channel the money for schools.

Prop. 39 is being advertised as a $1 billion annual “loophole closer” that would increase taxes on multistate businesses doing business in California. The money from that measure would be designated to spending on energy efficiency and clean-energy jobs. Its sponsor is financier Thomas Steyer.

Prop. 39 may be moot. The Legislature is working on a similar measure, and if it passes and Brown signs it, Prop. 39 will be withdrawn.

If Props. 30 and 38 both pass, there is some question over whether both tax plans will be in force, thereby raising the state’s taxes considerably, or whether one will trump the other, or whether they both will wind up in court, duking it out over which one the voters actually preferred.

If Prop. 30 fails, the trigger cuts will take place, even if Prop. 38 passes — or will they?

Again, this is a prototypical California problem, in which well-meaning people try to legislate via the ballot box, and wind up creating confusion. Good luck trying to figure it all out.

 

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