OC Political

A right-of-center blog covering local, statewide, and national politics

Posts Tagged ‘taxes’

Taxes Due Today, But California’s Tax Freedom Day Isn’t Until May 3

Posted by Chris Nguyen on April 15, 2015

Tax Freedom Day in Each State – California is 47th Latest on May 3 (Graphic Courtesy of the Tax Foundation)

So if you’re like me, you’ll be finishing filing your income taxes sometime tonight.  I’m glad e-file has existed since I started filing income taxes.  It’d probably be a disaster driving to one of those postmarking-until-midnight Post Offices if I had to mail in my income taxes.

In fact, there’s only one Post Office in all of Orange County that will still be postmarking mail until midnight tonight: 3101 Sunflower Ave. in Santa Ana (the retail portion closes at 7:00 PM, but they’re still postmarking mail received by midnight). For those in northwestern Orange County, you can drive into LA County before 10:00 PM because the Post Office at 2300 Redondo Blvd. in Long Beach will be postmarking mail until then.

While today is the day we literally pay our income taxes, the figurative day in which we finish paying our taxes is still nine days away nationally and eighteen days away for California.

The Tax Foundation annually calculates Tax Freedom Day, which is the day in which people have earned enough money to pay all their taxes (income, payroll, sales, property, etc.) for the year, assuming no change in income level during the course of the year.  Any income earned after Tax Freedom Day will belong to the taxpayer (again assuming no change in income level during the course of the year).

National Tax Freedom Day for 2015 is April 24, though Tax Freedom Day varies by state.

The earliest Tax Freedom Day is in Louisiana on April 2, followed by Mississippi (April 4), South Dakota (April 8), and Tennessee and Alabama (both April 9).

The latest Tax Freedom Day is in Connecticut and New Jersey (both on May 13), New York (May 8), California (May 3), and Massachusetts (May 2).

That’s right: not only is California 47th in the nation, we’re also worse than Taxachusetts.

To look at this another way, the average Louisianan celebrates Tax Freedom Day on April 2, which is 92 days into the year, or 25.2% of the way into the year.  In other words, the average Louisianan pays 25.2% of their annual income in taxes.

The average Californian celebrates Tax Freedom Day on May 3, which is 123 days into the year, or 33.7% of the way into the year.  In other words, the average Californian pays 33.7% of their annual income in taxes, 8.5% more than the average Louisianan.

All of California’s neighbors celebrate Tax Freedom Day before California does: Arizona celebrates it today (17th in the country), Nevada on April 20 (26th in the country), and Oregon on April 22 (33rd in the country).

Posted in California, U.S. Politics | Tagged: , , | Leave a Comment »

One Race May Determine Whether Taxes Go Up By Billions In The U.S.’s Largest Economy

Posted by Thomas Gordon on August 8, 2014

Received via email:

The top prizes up for grabs in the 2014 mid-term elections are control of the U.S. Senate and 30 of the nation’s governorships, but of more immediate consequence to taxpayers in the most populous state in the union – California – is one single state legislative race that is likely to determine whether or not taxes will rise by billions in the world’s eighth largest economy.
A two-thirds vote is required to raise taxes and fees in California; meaning that if Republicans cannot win over a third of the seats in the Assembly and Senate this fall, they will have no ability to stop Democratic proposals to raise taxes. The only reason that California Democrats are temporarily without a supermajority in both chambers right now is due to the indictment of three Democratic state senators this year. Many of the Golden State’s top political and electoral experts say Democrats’ unchecked ability to raise taxes in 2015 and 2016 depends on one state legislative race in Orange County: California’s 34th state senate district.

“Even with California’s already inhospitable tax climate, the public employee unions desperately need higher taxes to keep their unsustainable pensions and bloated salaries afloat, and they can be expected to pump millions into this one state senate race to ensure that they can continue to advance their agenda at the expense of California taxpayers,” said Jon Fleischman, publisher of California’s Flash Report.

Fortunately for California Republicans, they have a strong candidate in Janet Nguyen, a current Orange County Supervisor, to go up against former Democratic Assemblyman Jose Solorio in this crucial race. Nguyen, who emigrated to the U.S. from Vietnam at age 5, describes herself as “a believer in limited government,” and says that if elected, she would spend taxpayer dollars the way she spends her own. That would certainly represent a stark contrast between both the status quo in Sacramento and her opponent’s legislative record.

During his time in the state Assembly, Solorio was a champion of higher taxes and the state’s high-speed rail project, which is shaping up to be a boondoggle of historic proportions. Solorio, like most California Democrats, also appears to be a candidate safely in the back pocket of the state teachers union. As the Orange County Register recently noted, “he disagrees with the recent landmark Vergara ruling that struck down California’s two-year tenure and seniority (“last-in-first-out”) rules for teachers, saying he would not change those rules.”

“Janet Nguyen’s candidacy for state senate is the most important political fight in 2014 for Californians,” said Brian Calle, Opinion Editor for the OC Register and Editor-in-Chief of CalWatchdog.com. “And if Nguyen is victorious,” added Calle, “Democrats would not have the necessary two-thirds majority in the Legislature to unilaterally raise taxes in the Golden State”

California Democrats have made no secret of their desire to further raise taxes. Many of their proposals have already been filed as legislation. Proposals have been put forth in the past two years that would impose statewide tax increases on soda, energy production, the profits of companies whose executive salaries exceed some arbitrary threshold set by Sacramento bureaucrats, and business property taxes, just to name a few. In fact, California lawmakers are using this time before their September recess to push a plastic bag ban and ten cent tax on paper shopping bags. This bill, which Solorio voted for while in the Assembly, would then take this tax on every paper bag, which will disproportionately harm lower income households, and then turn and give it to the likes of Safeway SWY +0.47%, Ralph’s, and other large corporations.

Republican ability to stop the tax increases is even more important given that the Golden State is already one of the most heavily-taxed jurisdictions in the U.S., and the world for that matter. According to the non-partisan Tax Foundation, California has the fourth highest state and local tax burden in the nation, consuming 11.35 percent of the average California taxpayer’s income. Following passage of the personal and corporate income tax increases championed by Gov. Jerry Brown in 2012, California is now home to the nation’s highest top marginal income tax rate (13.3 percent) on California workers and small businesses. Extending those “temporary” personal and corporate taxes is something California Democrats could do all by themselves if they return to Sacramento in 2015 with a supermajority.

“We have three Democratic state senators that were either convicted or indicted this year alone. Some would say that such corruption is a symptom of the one-party rule that has existed in Sacramento for years,” said Fleischman. “This race,” said the OC Register’s Calle, “will decide whether there is balance of ideas in state government or one-party rule.”

Like George Wallace standing in front of the schoolhouse doors telling Yankees to butt out, many California politicians are fond of telling folks from around the country to mind their own business while the state runs off the rails. However, California’s economy is simply too large and too important to the nation’s economic health for the rest of the country not to be concerned. Keep an eye on California’s 34th state senate district this November. Depending on the outcome, it could cost taxpayers billions.

Read Patrick Gleason’s original story at Forbes HERE

Posted in 34th Senate District, Uncategorized | Tagged: , | 2 Comments »

AD-55 Watch: Ling-Ling Chang Quacks 2.0: Jobs Plan Falls Short

Posted by Allen Wilson on April 21, 2014

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Recently, Ling-Ling Chang sent out a mail piece to voters in the Orange County portion of the 55th Assembly District.

The mail piece touts her “5 Point Plan to Create New Jobs”, which needs thorough plucking and inspection:

ProposalReform the tax code to focus on job creation.

Reality Unfortunately, Chang was MIA as newly elected Walnut-Valley Water Board Director during the 2006 Diamond Bar’s Measure L ($34 Million Parcel Tax) that would have levied huge tax on residential, industrial and commercial property owners in perpetuity tied with COLA (Cost of Living Adjustment). 

ProposalReduce regulatory burdens that chase jobs out of state.

RealityIn 2010, Councilwoman Chang voted to raise fees across the board tied with COLA for the next three years.  We reported this issue regarding Steve Tye’s Fee-Tax Flip.

ProposalTax incentives for employers who hire new workers.

RealitySuch tax incentives has already been in place for years as employers are generally aware of the current $9,600 Work Opportunity Tax Credit (WOTC).

ProposalCut government waste to keep taxes down.

Reality Chang is endorsed by Senator Huff who was one of five GOP Senators who voted Yes on SB 11 (Pavley) that raised $2 Billion tax increase extension for smog abatement, vehicle registrations, boat registrations and tires.

Chang’s Jobs Plan falls short as her proposals which are dramatically different from the reality of the facts.

Therefore, the voters in the 55th Assembly District deserves better than a plucked chicken that would even fail the USDA inspection.

Posted in 55th Assembly District, Brea, California, La Habra, Placentia, State Assembly, Yorba Linda | Tagged: , , , | 3 Comments »

AD-55 Watch: Diamond Bar Councilman Tye Enters and Fee-Tax Position Haunts

Posted by Allen Wilson on January 24, 2014

SteveTye

Diamond Bar Councilman Steve Tye has thrown his hat in the ring as a GOP Candidate for State Assembly in the 55th Assembly District.

Mr. Tye was first elected to the Diamond Bar City Council in November 2005 after losing in a bitter June 2005 Special Election contest to Jack Tanaka for a seat that was vacant due to Bob Huff elevation to the State Assembly in 2004.  Mr. Tye has been re-elected in 2009 and as recently in 2013.

On June 25, 2013, OC Political article entitled “55th AD Watch:  Another Candidate Dual Run?” inquired at the time whether Councilman Tye was flirting a run for two offices:  City Council and State Assembly.

Those inquiries are now put to a rest with confirmation that Mr. Tye is indeed an Assembly candidate.

However, Mr. Tye position on taxes and fees may not sit well with Conservative voters in the GOP safe Assembly District, especially in North Orange County portion of the 55th Assembly District.

On September 21, 2010, the Diamond Bar City Council unanimously approved an increase of user fees for Community Services, Public Works and Community Development Departments to be phased in the next three years tied with CPI (Consumer Price Index) beginning on July 1, 2010.

Diamond Bar City Manager James DeStefano submitted the 40 page report to the council for approval.

This contributor spoke to the Diamond Bar City Council on September 21, 2010 with a reminder that an increase of user fees are misguided in an unstable economy and that such user fees are taxes which comes out of someone’s pocket one way or the other.

Councilmember Tye was adamant with a defensive tone, according to September 21, 2010 Council Minutes, by stating:

“…this is not a tax but a user fee.”

“…was a proponent for adding a fee for licensing a cat.”

“…it is appropriate if it costs $100 to issue a permit to have a water heater install in his home that he should pay the $100.”

“…likes the idea of someone plans to add to his home he pays the fees for it.”

When the City gets closer to recovering those user fees, it will be better for all of the citizens of Diamond Bar.”

The Orange County Register Editorial on September 21, 2010 clarifies during the debate over Proposition 26 proposal to close loopholes regarding fees and the two-thirds vote requirement for approval by the state legislature:  “Calling fees what they are:  Taxes“.

The Howard Jarvis Taxpayers Association has been vigorously fighting over the Fire Fee (Tax) that was approved in 2011 along party lines with Democrats support and Republicans opposed in the state legisature and signed into law by Governor Brown.

The $150 Fire Fee (Tax) for Fiscal Years 2011-12 AND 2012-2013 has effected hundreds and thousands of properties under the CalFire’s jurisdiction known as the State Responsibility Area.

So, Mr. Tye says “a fee is not a tax” may not have read the Orange County Register article, has a lack of understanding of why HJTA is fighting a fire fee that is a tax and surely has a lot of explaining to the voters in the 55th Assembly District whom loathe fees AND taxes.

Posted in 55th Assembly District, Brea, California, La Habra, Placentia, State Assembly, Yorba Linda | Tagged: , , , , , , , | 3 Comments »

New California Tax Policy – Retroactive Tax for Five Years WITH Interest

Posted by Cicero on March 26, 2013

Despite unanimous opposition from newspapers up and down the state, the Franchise Tax Board continues to stick by its decision to retroactively tax small businesses owners back five years for investing in California businesses. These are the people who are creating jobs and California is literally chasing them away.

One group of individuals is taking stand against the policy though – California Business Defense. The group will meet in San Diego next week and is specifically looking for more individuals who will be directly impacted by the policy. More information on the group and the status briefing in San Diego is available on the group’s website at www.cabusinessdefense.org.

Since 1993, small business owners and investors have been able to take advantage of a tax incentive that California actively promoted. The policy allowed stockholders who sold their share in a California business to reduce their tax liability by up to 50 percent or even 100 percent if the money from the sale was reinvested in a California business. The policy basically made it attractive for entrepreneurs to invest in small businesses and create jobs because it significantly reduced the tax liability for doing so.

Now though a court decided that this policy violated the commerce clause in the Constitution because it discriminates against out of state businesses. The FTB decided to embrace the court’s decision by retroactively taxing all the small business owners and investors who took advantage of the policy for the last five years. And not only that, but charge the tax WITH interest! The horrendous policy is expected to earn the state an easy $120 million.

But stop to think about what California is doing and the significance of what it means it could do in the future. These investors did exactly what they were asked to do by risking their own capital and investing in businesses in California. California promoted the tax break because it meant people were creating jobs and more people working. After receiving that benefit for two decades, California now wants to retroactively tax the very people that made the job growth possible. Some of those investments worked out and some of them did not but the FTB does not care and the tax will apply to all individuals even if they lost everything taking a risk to create jobs for California.

This policy has is so shocking that it has made national headlines on Fox News and Fortune, but the FTB stands by the decision. It has been likened to California changing the speed limit back down to 55 mph on highways, and then sending speeding tickets to everyone who drove over 55 for the last five years. That is exactly what is happening, and this decision by the FTB is the tipping point for many individuals, who can no longer justify the expense and risk of doing business in California. What message does it send to people considering starting a business if California can decide years down the road to penalize them for doing so?

Fortunately, Assemblyman Jeff Gorell, R-Camarillo and Sen. Ted Lieu, D-Torrance have stepped up in a bi-partisan effort to right the wrongs of the FTB. SB 209 would prohibit the state from charging interest and penalties in similar situations in the future.

At least one member of the FTB recognizes that this is a bad policy. In a letter to State Controller John Chiang, Board of Equalization Chairman Jerome E. Horton, and Director of Finance Ana J. Matosantos, Board Member George Runner urged them to reverse their decision to implement the policy. Despite the missive, no response has been seen from any of them.

California doesn’t need more laws to correct this policy. It needs needs policy makers with common sense. And this is another unfortunate example of exactly what is wrong with this great state.

 

 

Posted in Board of Equalization | Tagged: , , , , , , , | 3 Comments »

When is a deal not a deal?

Posted by Thomas Gordon on February 28, 2013

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With time running out, President Barack Obama has ramped up the fear tactics on the impending sequester. Massive teacher layoffs, planes falling from the sky’s, massive releases of hardened criminals from prisons and other impending doom as both Barack Obama and his spokespeople would have us believe.

The agreed to spending cuts are only $44 billion out of a total Federal budget of $3.6 billion. That’s still an increase in spending over last years Federal budget of $3.5 billion.

The White House Office of Management & Budget claims the sequester will slice $2 million out of the $20 million budget belonging to the National Drug Intelligence Center. Sounds scary until we dig deeper and find out that program was closed in 2012. Their duties have been absorbed by the DEA and they only requested $8 million of the former $20 million budget to run the same programs.

And despite Barack Obama claiming otherwise, the whole idea of spending cuts were his idea as part of the deal to raise taxes and increase the debt limit back in August 2012. He has been quoted repeatedly as saying we needed a balanced approach of “revenue increases” and spending cuts.

Republicans met Barack Obama half way on tax increases and Barack Obama signed off on agreed too spending cuts.

This President has no one to blame but himself.

Posted in Uncategorized | Tagged: , , , , | 1 Comment »

OC Weekly Exposes Troy Edgar’s Campaign Finance Crimes

Posted by OC Insider on September 26, 2012

OC Weekly’s Scott Moxley has once again exposed potential crimes by an OC Politician.  For those you who are not aware of Moxley’s previous work, he is the same reporters that exposed disgraced Former Sheriff Mike Corona.  Moxley was also the reporter that brought the Mike Duvall sex scandal to light.

It looks like once again, Moxley has manged to get the scoop and expose yet another politician’s dirty laundry.

Excerpt From OC Weekly, By Scott Moxley (0/26/12):

Troy Edgar’s Missing Mailer Money

In January, for his now-defunct congressional campaign, Edgar produced and delivered an eight-page glossy mailer to 3,000 Southern California Republican power brokers. The objective was to win endorsements, raise contributions and frighten potential GOP opponents away from the race. As political literature goes, the piece wasn’t bad. It hailed his leadership skills, conservative policy stances and family values. To bolster credibility, District Attorney Tony Rackauckas declared on the front page of the brochure, “Supporting Troy Edgar for Congress was an easy decision.”

It might be a line the DA, who recently announced he’s seeking additional resources to prosecute corrupt public officials, will soon wish he hadn’t uttered because the brochure could be the centerpiece of two crimes. Let me explain.

Because of anti-public corruption concerns resulting from the Watergate scandal in the 1970s, federal campaign-finance laws require campaigns to publicly disclose major expenses. The rationale is that voters should know if a candidate is up to no good. According to records obtained by the Weekly, the power-broker brochure cost more than $5,668, but Edgar never complied with federal election rules to disclose the spending or reveal who paid for it.

Indeed, he disclosed 41 separate congressional-campaign disbursements but not this one—which also happened to be the committee’s largest expenditure.

Asked to explain, the candidate first said he is unfamiliar with that specific mailer because he has sent out “hundreds” of them. Later, he assured me the power-broker disbursement “absolutely shows up” on a disclosure report. When I told him it didn’t and asked him to resolve what happened, he replied he “printed it at home,” which is troubling because, as I write this column, I’m looking at a detailed invoice for the job from Sparta Graphics.

Read the Rest of the Article Here: Troy Edgar’s Missing Mailer Money

Posted in 47th Congressional District, 72nd Assembly District, Fountain Valley, Huntington Beach, Los Alamitos, Surfside Colony Community Services District, Uncategorized, Westminster | Tagged: , , | 6 Comments »

Menage a Trois Alert: “Taxin” Troy Edgar, Barbara Boxer and Dianne Feinstein

Posted by OC Insider on September 5, 2012

Troy Edgar’s horrendous history of supporting taxes and regulations has been covered pretty well by this and other blogs.  Yet, I was still surprised to learn that in April of 2008, as a member of the Southern California Association of Governments (SCAG) Regional Council, Edgar voted to support S.1499, authored by Senator Boxer and co-authored by Senator Feinstein.

I have to wonder how a bill authored by Boxer and Feinstein did not raise any flags for Edgar. Either he knew the content of the bill and supported it.  Or, he is incompetent and just showed up to receive his per diem and voted yes on every item. Either or, here is what S.1499 does and why Troy Edgar should have stood up and opposed it.

The bill would have given the EPA additional regulatory powers and instructed it to promulgate regulations requiring vessels which use U.S ports to reduce fuel sulfur content from 27,000 to 1,000 parts per million, by 2012.  Why should have Troy Edgar opposed this legislation?

First, this legislation would have been extremely costly and had a devastating impact on the national economy.  According to the Congressional Budget Office, the cost of complying with the low-sulfur regulations would cost $500 million in the first year and the cost would increase in subsequent years.  Additionally, the regulations would have raised the cost of transporting goods and impacted U.S. international competitiveness.  The emission standards would have required new and existing vessels to pay for expensive engine upgrades and technology upgrades.  Furthermore, the Engine Manufacturers Association opposed the legislation because it is doubtful that the appropriate technology could have been adopted in time.

Second, the legislation was not necessary in most of the country. According to the Senate Committee Report for S.1499, “most American ports do not have air quality issues”.  Some California ports do have a continued nitrogen oxide and particulate matter problem, but that is a regional issue.  This legislation would have regulated all American ports and unfairly burden them regardless of air quality.

It is not surprising that S.1499 did not make it very far in Congress.  The bill did not even make it out of the liberal controlled Senate.  However, the bill reveled more about Troy Edgar’s values.  If Troy Edgar is willing to support S.1499, I doubt there is a tax or regulation he will not support.

Posted in 72nd Assembly District, Fountain Valley, Garden Grove, Huntington Beach, Los Alamitos, Orange County, Seal Beach, State Assembly, Surfside Colony Community Services District, Westminster | Tagged: , , , , , | 1 Comment »

Taxin’ Troy Edgar Caught Supporting another Tax

Posted by OC Insider on August 7, 2012

Troy Edgar got dubbed “Taxin’ Troy” because of his record of raising taxes and fees on his City Council. But the more we dig, the more we find that his record of tax and fee increases stretches well beyond just the City Council. Like so many people in local office, Troy Edgar loves serving in regional government. He’s served on most every Board, receiving most every stipend along the way, in Orange County. And he’s raised taxes and fees on most of them.

For those new to the party, here is a quick refresher on Troy Edgar’s taxin’ past.

1.      Troy Edgar rejected the No New Tax Pledge.

2.      Troy Edgar has voted for over a dozen new taxes and fees.

3.      He is pushing for a massive utility tax increase in Los Alamitos. See Here and Here  (The Howard Jarvis Taxpayers Association called it a “massive tax increase”, when Vallejo tried to do the same thing.)

Now new evidence shows Troy Edgar supporting even more tax expansions.  In this case, Troy Edgar’s membership on the San Gabriel and Lower Los Angeles Rivers and Mountains Conservancy (RMC) is the culprit.

From looking at the meeting minutes, Edgar mostly shows up, votes yes on everything, collects his per diem, and calls it a day.

And by voting yes on everything, I mean everything. In May of 2010 for example, Edgar decided it was a great idea to support a resolution advocating for passage of AB 2554 (Brownley 2010).  What is AB 2554 about?

AB 2554 conferred additional fee raising authority upon the LA Flood Control District.  Basically, it made it much easier for the district to raise fees on tax paying homeowners within its boundaries.

Who opposed this massive tax increase?

As you would expect, the Howard Jarvis Taxpayers Association (HJTA) was opposed to the bill. In its opposition letter HJTA states,“Considering that Los Angeles County has a $2.4 billion General Fund budget and record $1 trillion on IRS property tax roll, there is plenty of money to go around.  We simply do not see the need to authorize a new method to exact more money from the California taxpayer.”

In addition to HJTA, every Republican member of the legislature voted against it

Voting NO from the Orange County delegation:

Senate: Harman, Wyland, Correa (Yes, even OC Democratic Senator Lou Correa opposed the bill (Huff and Walters, ABS)

Assembly: DeVore, Hagman, Harkey, Miller, Norby, Silva, Tran

Again, Troy Edgar stands alone in supporting yet another massive tax expansion. With the Republicans’ Legislative Caucuses teetering on falling beneath the 2/3 threshold, sending Troy Edgar to Sacramento is a risk we just can’t afford. He’s just lived up to his name of “Taxin’ Troy” too many times.

Posted in 72nd Assembly District, Fountain Valley, Garden Grove, Huntington Beach, Los Alamitos, Midway City Sanitary District, Rossmoor, Santa Ana, Seal Beach, Sunset Beach Sanitary District, Surfside Colony Community Services District, Uncategorized, Westminster | Tagged: , , , | 5 Comments »

Field Poll: Brown Tax Leads, Even Split on Munger & Steyer Taxes, High-Speed Rail Decreases Support for Brown Tax

Posted by Chris Nguyen on July 9, 2012

Since you’re reading this post, you obviously passed the test we posted on Friday to avert being knocked off the Internet.

Three tax measures have qualified for the November ballot, sponsored by Governor Jerry Brown, multimillionaire heiress attorney Molly Munger, and billionaire businessman Tom Steyer, respectively.

Ballot Measure Proponents Jerry Brown, Molly Munger, and Tom Steyer

Munger Sues State

The battle between Munger and Brown on ballot measure numbering has a hearing scheduled today at 9:00 AM. (Munger asked the court to delay the hearing for another nine days, stating the Los Angeles County Registrar of Voters had refused to supply documents or completely answered questions, but was apparently unsuccessful in getting the delay.)  For more details on the suit, read my post from last Monday (note that on Thursday, the Legislature approved legislation moving the water bond from the 2012 ballot to the 2014 ballot; the water bond would have been Proposition 30 regardless of Munger’s lawsuit, so when reading that post, just remove Proposition 30 and subtract one from the numbering of all the other measures; other than that, everything in the post is still current information).

If Munger prevails, her ballot measure will be Proposition 36 rather than Proposition 38, Brown’s ballot measure will be Proposition 37 rather than Proposition 30, and Steyer’s will be Proposition 38 rather than Proposition 39.  In other words, if Munger prevails, the ballot order will be six other measures, the Munger measure, the Brown measure, the Steyer measure, and two other measures.  If Brown prevails, the ballot order will be the Brown measure, seven other measures, the Munger measure, the Steyer measure, and the Senate redistricting referendum.

Brown’s Income and Sales Tax Increase Measure Leads, But is Threatened by High-Speed Rail

The latest Field Poll finds Governor Jerry Brown’s income and sales tax increase ballot measure leads 54%-38%, with 8% undecided.  (The poll found a similar result in May, with the measure leading 52%-35%, with 13% undecided.)   Brown’s tax increase ballot measure leads among every demographic and geographic group, as well as liberals, moderates, Democrats, and independents.  Only conservatives and Republicans oppose the measure.  However, not all is rosy for the Brown tax increase measure…

21% of the measure’s supporters indicated that they would be less inclined to support the Brown tax increase if the high-speed rail funding bill was approved.  Conversely, only 5% of the measure’s opponents indicated that they would be more inclined to support the Brown tax increase if the high-speed rail funding bill was approved.

(The poll was completed shortly before the Senate passed the high-speed rail funding bill 21-16 on Friday and the Assembly passed the bill 51-27 on Thursday.  Brown is expected to sign the bill this week.)

The high-speed rail bill’s approval may very well endanger Brown’s tax increase initiative.  Ballot measures typically lose support as campaigns wear on, and the high-speed rail may send support for Brown’s tax increase measure under 50%, making it that much more difficult to pass once the campaign season begins in the fall.

Voters Evenly Split on Munger Income Tax Increase Measure

Molly Munger’s income tax increase ballot measure has voters perfectly split, with 46% supporting it and 46% opposing it.

Republicans oppose the Munger income tax increase, Democrats support it, and independents are evenly split.  Conservatives and moderates oppose it while liberals support it.  Men oppose it while women support it.  Whites oppose it, Latinos support it, and other ethnic groups were split.

Voters under 40 support the Munger income tax increase measure while voters over 40 oppose it.  Union households support it while non-union households were split.  People making less than $40,000 support it while voters making more than $40,000 oppose it.

As expected, San Francisco Bay Area voters support the Munger income tax increase measure while other Northern Californians oppose it.  Strangely, Los Angeles County voters are evenly split on the measure while other Southern Californians were supportive, upending the typical result of LA County being less tax-averse than other Southern Californians (in this same poll, on the Brown and Steyer measures, the more-expected result of LA County being less tax averse than the rest of Southern California occurred).

Voters Evenly Split on Steyer Singles Sales Factor for Business Income Tax Calculation Measure

Tom Steyer’s measure requiring the singles sales factor for business income tax calculation has voters effectively split, with 44% supporting it and 43% opposing it.

Conservatives and Republicans oppose the Steyer single sales factor measure while independents, moderates, Democrats, and liberals support it.  While both genders were split within the margin of error, men were more likely to oppose while women were more likely to support.  Whites oppose the measure, Latinos support it, and other ethnic groups were evenly split.

Voters under 40 support the Steyer singles sales factor measure, voters over 65 oppose it, while middle-aged voters were even split.  Union households were supportive while non-union households were evenly split.  Voters making making $40,000-$99,999 support the measure while those making more than $100,000 oppose the measure.  Oddly, those making less than $40,000 were evenly split.

The San Francisco Bay Area and Los Angeles County support the Steyer single sales factor measure while the rest of Northern and Southern California oppose it.

Will the LA County Measure R Sales Tax Extension Accidentally Kill All the Tax Measures?

In 2008, LA County voters approved Measure R, a 0.5% sales tax increase to fund transportation projects that took effect July 1, 2009, and expires 30 years later in 2039.  Inexplicably, the LA Metropolitan Transportation Authority voted to place an extension of Measure R on the November 2012 ballot to add 30 years to the 0.5% sales tax increase making it expire in 2069.

Just four years into a thirty-year tax, voters are being asked to make it a sixty-year tax.  If approved, nearly all people who vote on this ballot measure will be dead by the time the tax expires.

It seems strategically odd to ask for an extension so soon after the initial passage.  It would have seemed more strategically sound to wait until 2030 or so when Measure R was nearing expiration.

The placement of the Measure R extension on the November ballot means LA County voters will be faced with four tax measures on their ballot.  Voter tax fatigue will take its toll in LA County.

Why does LA County tax fatigue matter to the rest of the state?  Well, 1/4 of all Californians live in Los Angeles County.

Look at Prop 29: it failed by 0.6%.  The San Francisco Bay Area went overwhelmingly for it.  Most of Northern and Southern California went overwhelmingly against it.  Los Angeles County narrowly went against Prop 29.

This Measure R extension may be the inadvertent death knell of the tax-related statewide ballot measures in November.

LA County support is pivotal for any tax measure hoping to pass in California.

What the Three State Ballot Measures Would Do

For those of you who are wondering what the three state ballot measures would do…

Brown’s measure (likely Proposition 30 or Proposition 37, it is officially titled, “Temporary Taxes to Fund Education. Guaranteed Local Public Safety Funding. Initiative Constitutional Amendment. “) would increase personal income taxes for amounts above $250,000 per year for seven years and raise the state sales tax by 0.25% for four years. Specifically, income taxes on amounts:

  • between $250,000-$300,000 would increase by 1% to 10.3%
  • between $300,000-$500,000 would increase by 2% to 11.3%
  • above $500,000 would increase by 3% to 12.3%

Sales taxes in OC would climb to 8%, except in La Habra, where it would go to 8.5%. LA County sales tax would go up to 9%.

For seven years, 89% of the tax money is allocated to K-12 schools with 11% to community colleges. On a permanent basis, 1.0625% sales tax would be permanently removed from the Prop 98 education funding formula to fund local public safety realignment programs.

Click here for the Legislative Analyst Office’s official fiscal analysis of the Brown measure.

Munger’s measure (likely Proposition 36 or Proposition 38, it is officially titled, “Tax for Education and Early Childhood Programs. Initiative Statute.”) would increase personal income taxes on nearly all Californians for twelve years.  Specifically, for individuals who are not heads of households, income taxes on amounts:

  • between $7,316-$17,346 would increase by 0.4% to 2.4%
  • between $17,346-$27,377 would increase by 0.7% to 4.7%
  • between $27,377-$38,004 would increase by 1.1% to 7.1%
  • between $38,004-$48,029 would increase by 1.4% to 9.4%
  • between $48,029-$100,000 would increase by 1.6% to 10.9%
  • between $100,000-$250,000 would increase by 1.8% to 11.1%
  • between $250,000-$500,000 would increase by 1.9% to 11.2%
  • between $500,000-$1,000,000 would increase by 2.0% to 11.3%
  • between $1,000,000-$2,500,000 would increase by 2.1% to 11.4%
  • above $2,500,000 would increase by 2.2% to 11.5%

For heads of households, income taxes on amounts:

  • between $14,642-$34,692 would increase by 0.4% to 2.4%
  • between $34,692-$44,721 would increase by 0.7% to 4.7%
  • between $44,721-$55,348 would increase by 1.1% to 7.1%
  • between $55,348-$65,376 would increase by 1.4% to 9.4%
  • between $65,376-$136,118 would increase by 1.6% to 10.9%
  • between $136,118-$340,294 would increase by 1.8% to 11.1%
  • between $340,294-$680,589 would increase by 1.9% to 11.2%
  • between $680,589-$1,361,178 would increase by 2.0% to 11.3%
  • between $1,361,178-$3,402,944 would increase by 2.1% to 11.4%
  • over $3,402,944 would increase by 2.2% to 11.5%

For the first four years, 60% of the tax money is allocated to K-12 schools, 10% to early childhood programs, and 30% to repaying state debt. For the remaining eight years, 85% of the tax money is allocated to K-12 schools and 15% to early childhood programs.

Click here for the Legislative Analyst Office’s official fiscal analysis of the Munger measure.

Steyer’s measure (likely Proposition 38 or Proposition 39, it is officially titled, “Tax Treatment for Multistate Businesses. Clean Energy and Energy Efficiency Funding. Initiative Statute.”) would permanently impose the single sales factor calculation on income taxes for multistate businesses.

For five years, $550,000,000 would be allocated from the state General Fund into the “Clean Energy Job Creation Fund,” which would be used for energy efficiency retrofits and alternative energy installations in government buildings, local government energy retrofit financial assistance programs, and job training and workforce development programs.

Click here for the Legislative Analyst Office’s official fiscal analysis of the Steyer measure.

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