Progressive Taxes: A Solution for Better Schools in the 2016 Election

2. 2016 ELECTION: an opportunity for better schools through progressive taxes

3. WHY DO WE EVEN NEED TO TALK ABOUT THIS?

4. GROWING ECONOMIC INEQUALITY Fortune 500 CEOs [Washington Post, 2014]

5. GROWING ECONOMIC INEQUALITY [Center on Budget and Policy Priorities]

6. GROWING ECONOMIC INEQUALITY [Center for Labor Research & Education, UC Berkeley

7. TAX RATES FOR THE 1% HAVE DECLINED STEEPLY [National Taxpayers Union]

8. Growing national economic inequality, 35 years Richest 1%’s share of income more than doubled over past 35 years, while working people’s share flat-lined.

9. Growing national economic inequality, 35 years

10. In addition, we had California-specific problems: • Until 2010, it took 2/3 of the legislature to pass a budget • Starting with Prop 13 in 1978, it also took 2/3 of the legislature to pass a new tax, or increase an existing one, while it only took a simple majority to eliminate one • California was the only state in the nation with both 2/3 rules

11. What Prop 13 did: • Limited property taxes to 1% of value • Increases in property value limited to annual factor of • no more than 2% • Rolled back assessments to 1975-76 level • • Raised threshold for passing tax in state legislature to • two thirds • • Raised threshold for passing local taxes to two thirds • • Property reassessment to market value only on • change of ownership, and with loopholes even then

13. The Prop 13 ownership loophole To avoid paying taxes on the actual worth of the Miramar Hotel, three “different” buyers bought less than a 50 percent share of the property.

14. RESULTS by 2010 • California K-12 Education spending 49th in nation • 10,000 teacher layoffs per year 2009 – 2011, thousands of layoffs and furloughs for classified employees • Social services slashed ($3 billion in cuts) • State general fund spending reduced by 15% between 2007 and 2010, from $102 billion to $84 billion • Higher education lost thousands of classes, hundreds of thousands of students, due to cuts and skyrocketing fees

15. Q: What did CFT do about this? A: The Fight for California’s Future campaign • GOALS: • Majority rule for budget • Majority rule for taxes • Progressive tax education • Pass revenue measures to fund our state’s future

16. Progressive tax education • 2008 – 2009: developed fair tax education materials • 2010: The March for California’s Future

17. Progressive tax education • 2008 – 2009: developed fair tax education materials • 2010: The March for California’s Future • Restore the promise of education • Government and economy that work • for all Californians • Fair taxes to fund California’s future

18. 2010: We passed Prop 25 • State budget now passes with majority vote • No more “Sacramento gridlock” • No more losing revenue sources each year as part of budget talks endgame

19. 2012: We passed Prop 30 • 6 billion dollars/year for education and services for 7 years with two taxes • A progressive tax: 85% from increased income tax on the wealthy• A regressive tax: 15% from a tiny (0.25%) • sales tax increase • Stopped the bleeding • High income earners now pay a more fair share of taxes to support public education and services

20. What we learned in the Prop 30 campaign: • • As we educated people about taxes we learned: • Always say who is being taxed, how much, for what purpose, and how much it will raise • How to explain the difference between progressive/regressive • Si se puede: we can win tax battles

21. HOWEVER, THERE IS A PROBLEM Prop 30 only brought us part way to restoring the revenues needed to fully fund education and services.

22. Proposition 30 will need renewal. • Prop 30 takes care of approximately half of the structural state budget deficit, and it is temporary. • We will need to generate additional revenues to adequately fund schools and the services Californians need and deserve. • We will need to continue to educate the public about the inequalities in our society and in our tax system.

23. The impact of the Occupy movement was profound Public awareness caught up with the changing economic reality.

24. Some fair tax ideas to think about and work on • Renew Prop 30, either in the legislature or at the ballot box • “Make it Fair”: Reform commercial property tax loopholes, the legacy of Prop 13 • Enact severance tax on oil produced in California • Lower 2/3 rule for local taxes (SCA 11, Hancock) • Replace 2/3 legislative rule for passing taxes with simple majority • Enact modest taxes on financial transactions (Robin Hood tax)

25. What you can do now • Document how Prop 30 is making things better • Educate family and friends • Persuade legislators to pass fair taxes to support • public education and services • Make presentations to groups and build alliances • Join in our long term campaign to Fight for California’s Future.