PRESS RELEASE

Stop tax increases and special interests’ domination of California in
the upcoming November Election

October 12, 2012

Contact: Frank Lee (FLee@Justice-Equality.org)

 

Organization for Justice and Equality

Alliance of Contra Costa Taxpayers

California for Liberty

Pacific Justice Institute

Silicon Valley Taxpayers Association

Solano County Taxpayers’ Association

Waste Management, Inc.

 

Our coalition, the only major taxpayers’ coalition in the San Francisco Bay Area, has been contributing to our society through the years.  Now we want to urge Californians to vote no on Proposition 30, 38, and Alameda County Regional Measure B1, and support Prop 32 in the upcoming election.  We believe that Californians must stop tax increases and special interest’s domination of our state. 

To start with, California already has the highest sales tax rate in the nation.  We have the third highest personal income tax rate and our state individual income tax collections are the highest in the country.  California corporate tax rate, moreover, is the highest in the West and our business tax climate ranks 48th in the country.  Are we still not paying enough taxes?

On the other hand, state governmental spending kept skyrocketing in California, increased 177.66% from fiscal year 1990-91 to the level of $141.9 billion in fiscal year 2012-13.  The average annual spending increase is higher than the combined growth rate and inflation rate, reflecting the unhealthy situation.  How much more do we have to spend to satisfy the politicians and the special interests?

The general rule is that if a state uses more than 6% of the budget to pay off debt, the state government is considered borrowing too much and mismanaging the state.  In California, that number was 7.9% for the last fiscal year and is estimated to be 8.9% for the current fiscal year.  According to Moody, California is the second worst state in debt per capita.  We do have a spending problem!

California politicians must spend effectively and efficiently, spending on basic services that benefit most people rather than government dependents, employees, and contractors.  

While California is a state so broke that we may ask Greece for a loan, many other states begin to climb out of their own budget sloughs.  In the Fall survey of states, the National Governor Association and National Association of State Budget Officers found the overall condition of states improving.  Nationwide, states’ reliance on higher taxes has diminished since 2009.  Why is California still counting on higher taxes even though Californians are already heavily taxed? 

Many states have managed deficit without raising taxes.  Examples include New Jersey Governor Chris Christie and Oklahoma Governor Mary Fallin, gaining national attention for their measures to contain costs and create jobs.   

A report by American Legislative Exchange Council reveals that between 1998 and 2007, states without individual income tax created 89% more jobs and had 32% faster personal income growth than states with the highest individual income tax rates did.  On the other hand, as one of the states with the highest taxes, California has the third highest unemployment rate in the country.  Should Californians keep paying higher taxes?  

Increasing taxes actually would reduce consumer spending and cause our economy to further decline.  This is going the opposite direction.

Finally, the imminent expiration of various federal tax cuts since 2001 probably would cause 90% of U.S. households to have a much bigger tax burden, how can Californians afford more new state and local taxes? 

Based on the above analysis, we should vote no on tax increases including Prop 30, Prop 38, and Alameda County Regional Measure B1 in the upcoming November Election.

Politicians always threaten us that we would have huge problems with education and public safety if we do not raise taxes.  They use this trick again and again.  This is like a broken record which must be stopped! 

Prop 30 does not guarantee any new money for education.  It is because politicians can take away current fund earmarked for education and use it for other purposes, and then replace that money with the new taxes from Prop 30.  Even the California School Boards Association stated in May of this year that Governor Brown’s initiative or Prop 30 does not provide new funding for schools.

In addition to killing jobs and hurting small businesses, Prop 30 just gives more money to politicians to keep spending without really creating meaningful reforms, cleaning up government, and growing our economy to create jobs.

While Prop 30 is bad, Prop 38 is egregious and should also be rejected.  Prop 38, if passed, would throw $120 billion new tax dollars into a new unaccountable state bureaucracy which would create complex red tape but not bring back quality education for our children. 

Alarmingly, Prop 38 is a massive tax increase for the middle class and small businesses. 

Anybody earning $8,000 or more per year in taxable income will see his/her tax rate goes up by as much as 21% for the next 12 long years.  Small businesses which pay individual taxes on their earnings, will be devastated by these taxes and thus causing considerable job loss in California.

Despite that California already has the highest sales tax rate in the country, politicians still keep trying to raise sales tax.  Alameda County Regional Measure B1 is a despicable and unprecedented attempt to permanently raise sales tax by 0.5 percent when our economy is still not in good shape and ordinary citizens are still suffering. 

In 2010, the average annual income of U.S. middle class after inflation adjustment declined by 6%, comparing with that of 2000.  In the Silicon Valley, the same figure declined by a stunning 19% from 2000 to 2010.  Economists have pointed out that this is the worst since the Great Depression.       

Intel’s CEO, Paul Otellini, recently disclosed that Intel had not created any new job in California in the last 10 or 12 years and that his California employees like to ask for relocation to other states after forming their own families due to the high taxes and living expenses here.   

Instead of puzzling the problems out for us, our politicians here focus on making more money from us!  Not only will Regional Measure B1 create a new “storage tax”, hurting employers and individuals who store goods for sale; it will take citizens’ hard-earned money to fund inefficient, expensive, and underutilized public transportation systems.  It will likely create many “pork barrels” to the outrage of Alameda County residents. 

The lack of sunset clause for sales tax increase is a really bad example for politicians in other counties to follow.  It is imperative for voters everywhere to spread the word about this pernicious measure to ensure that it is defeated!

In an attempt to clean up California’s dirty politics which is a major reason causing the spending problem in California, Prop 32 has to be approved.  It will stop the detrimental domination by special interests, labor unions, and large corporations.

According to San Jose Mercury News, 40% of legislations were written by lobbyists and those bills were much likely to become law.  79% of the campaign contributions made to California legislators were by donors residing outside their districts.  California has been plagued by corporate and labor union special interests for too long.  Thus, it is sagacious to vote yes on Prop 32 to ban corporations and unions’ direct contributions to politicians.  Federal Law has had this banned for over 100 years and many states do as well.

Prop 32 will contribute significantly in eliminating “pork barrels” since it prohibits contractors from giving to politicians who approve their contracts.  This is just common sense.  It is about time to get rid of this type of corruption thoroughly.  Opponents of Prop 32 cannot find any proper excuse to defend this.     

Pacific Justice Institute  maintains that under the current law, a union member who disapproves the political actions of a labor union can choose not to pay the union dues if he/she contributes the same amount to a charity of his/her choice.  But most people do not know about this and it is also burdensome for the union members. 

Prop 32 offers a good solution to this intractable problem by banning labor unions from automatically deducting from the paycheck of union members the union dues for political purposes.  Every labor union has to ask for permission of individual union members who can say no.  The same applies to corporations in terms of deducting from employees’ paycheck for political purposes.  This is the correct method in a democratic society.

The opponents claim that Prop 32 has a loophole to benefit the corporations and the wealthy who can fund independent political action committees (PAC).  But the fact is both unions and corporations fund independent PACs protected by the Constitution which cannot be banned.     

According to the Editorial of Wall Street Journal, the clean-up of California’s dirty politics depends much on Prop 32. 

Suffice it to say, voters definitely should vote no on Proposition 30, 38, and Alameda County Regional Measure B1, and vote yes on Prop 32 in the upcoming election.  Californians must stop tax increases and special interest’s domination of the state.


This coalition held a press conference in South San Francisco on October 12, 2012.

    


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