In a University of California Board of Regents meeting held March 27-29, UC president Mark Yudof publicly announced his support for Gov. Jerry Brown’s newly proposed tax initiative. Yudof urged the rest of the board to do the same.
Brown’s new tax initiative is a negotiated compromise among his original initiative, civil rights attorney Molly Munger’s tax initiative and the Millionaire’s Tax.
Brown’s original initiative would have temporarily increased sales tax by 1-2 percent and raised income taxes for individuals who make over $250,000 and households making over $500,000. In contrast, Munger’s tax initiative focused only on state income tax rates. It would have raised income tax rates in households making $17-$20,000 or more by 2.2 percent and would have been instated for 12 years. The Millionaire’s Tax would have imposed a 3 percent tax increase on those who make more than $1,000,000 and a 5 percent tax increase on those who make more than $5,000,000.
The newly proposed initiative would raise a progressive income tax for individuals making over $250,000 or households making over $500,000 and would increase sales tax by a half cent for four years.
Brown’s initial plan would have been instated for five years. The new plan would be instated for seven.
The majority of surplus revenue generated by the new initiative is expected to be allocated toward funding public education. The remaining surplus revenue would fund other public services.
“Brown’s new tax initiative represents the best opportunity I’ve seen in my four years in California for the state to clamber out of a sinkhole of fiscal uncertainty and move forward into a better, more prosperous future,” Yudof said in a statement at the regents’ board meeting.
Some say that Brown’s compromise was an effort to gather bipartisan support.
“This is a political process and like it or not, Brown’s initial proposal was an effort to get conservative support,” said UCSC professor of economics David Kaun. “You get conservative support with sales taxes, not with income taxes.”
Others say that Brown’s new proposal is a major victory for the Occupy Wall Street (OWS) movement’s most recent actions, including the March 5 occupation of the state capitol. Josh Brahinsky, UCSC history of consciousness graduate student and United Auto Workers Union 2865 activist, addressed OWS’s role in the negotiations.
“Any new tax on the rich, such as Brown’s initial proposal, clearly responded to [OWS’s] calling the 1 percent to account,” Brahinsky said. “Brown’s need to compromise with the Millionaire’s Tax only continued that response.”
Brahinsky said UCSC’s strike on March 1 and participation in the March 5 occupation of the Capitol played a major part in the Millionaire’s Tax campaign. Kaun also acknowledged the role played by the OWS movement.
“There is no question that OWS from day one to its present time has created a much broader awareness in political climate that can’t possibly have gone unnoticed,” Kaun said. “I don’t want to say it’s changed the nature of our society fundamentally, but it was a massive movement.”
Kaun also addressed the role of students in OWS and the November 2012 election.
“It still is the case, at least from the left, that the vote of young people is going to be very important, as it was in the last election,” Kaun said. “Younger people are way more tuned in to OWS kinds of activities.”
Over 50 organizations, ranging from the labor movement to teachers associations, support the new initiative, including the California Teacher’s Association and the UC Student Association.
The new tax initiative is still pending inclusion in the November 2012 ballot.