Response to “Reduce spending and don’t tax the rich!”

May 25, 2012 Leave a comment

I have talked with many people who have concerns about state spending and taxing the rich. This blog is a response to them, and a reply to a comment Vibora Volando posted to my Open Letter to Governor Jerry Brown (click here to see the initial blog and comments).

VIBORA VOLANDO: When will you sympathizers get it through your heads. We have a spending problem, not a revenue problem. Democratic legislators have taken us down the road to perdition because they don’t know how to balance a checkbook, or insist on a $100bln railroad to nowhere, when there isn’t a dollar on hand we haven’t borrowed. It is sickening. We have been promised too much “heroin” in the form of government welfare and finally someone is at least bringing it to the press. California’s education system is fiscally unsustainable due to waste, giveaways, bloated salaries and pensions. Yet the lazy solution is to raise more money to throw at the problem rather than find real long term solutions. And this thing about the rich paying their fair share. LOL. Take away the rich and Cali goes down the tubes. Then those nice new “temporary” taxes will be re-calibrated to slip down to ever lower income brackets until things blow up. It is laughable that people are all energized about taking more money from the wealthy when they contribute virtually nothing in comparison. Extortion cloaked in the faux fur of democracy.

MY RESPONSE:

First, I agree that a high-speed rail system is not what we need right now. That’s like frosting on the cake, when we don’t have the cake, and not even the main dish. We need good transportation systems like regional public transit that is frequent and affordable; that’s what encourages people to use it. We also need roads with potholes filled and parking available; that helps neighborhood businesses.

I also agree that we should not be borrowing, and throwing money away in interest. The state pays out about 5% interest while it has billions of dollars sitting in Wall Street banks earning less than 1% interest. That does not make sense. North Dakota is the only state without a budget deficit since the global meltdown, and it is also the only state with a State Bank. See http://publicbankinginstitute.org/  I think you’ll like the idea.

As to the disparity of wealth, it’s a question of scale. It has gone too far. What was called rich used to be seven times richer than the rest of us; now it’s 300 times or 1000 times. California’s 94 billionaires could solve the budget gap without affecting their or their children’s quality of life. To build up wealth of one billion dollars, you would have to earn $1,000,000 a year for 1,000 years. Or if you only worked 50 years full-time, you would have to earn $10,000 an hour and tighten your belt – only spend $800,000 a year during those fifty years. That’s a billion dollars. Who needs it? Who is worth $10,000 an hour at age 21 if someone else is worth $8?

All this, all the money they’ve accumulated, would not be a problem if it didn’t bring with it the closing down of schools, libraries, parks and so many things that have now given our next generation fewer educational and economic opportunities than the prior generation. And their elders are suffering too.

For decades we have been reducing taxes on the rich, and if it actually did create jobs and help the whole state, we would not have the unemployment rates we have.

This is real: we are now in the situation where the lower income families pay a higher percentage of their income in state and local taxes than the richest 1%. It has to do with taxes other than income tax; taxes like sales tax, property taxes, and fees fall harder on lower incomes.  My guess is that you and your family and friends, like the vast majority of Californians, are on the wrong side of that balance of tax fairness; my guess is that you pay at a higher rate than the richest of the rich.

The super-rich used to be taxed more and could still get wealthy. They actually get a lot of financial benefit from the government. Corporations for example, in addition to having departments that ensure they pay as little tax as possible (their spending side), have departments dedicated to getting government contracts and subsidies, not to mention the Wall Street bailouts (their revenue side). And as to helping the state, scandals like those of Enron and the savings and loans cost our state billions. And then, in an amazing example of weapons of mass distraction, immigration gets blamed for economic problems.

If the super-rich move away from this wonderful state, then I’m sorry for them because California is truly special.

We won’t stop fighting to balance the budget and reduce the disparity of wealth. We want to increase the chances for the rest of us to have good jobs and good lives.

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Video “Open Letter to Governor Jerry Brown”

April 5, 2012 8 Comments

See my new video with great graphics half-way through, at about minute 2:00.

To read text only, click “Open Letter ….” at the right. The text below provides an introduction to two ideas for a better California, with the possibility of creating a ripple effect across the country. First we need to fix our budget. The budget affects everything else: economy, education, environment, jobs, justice, health and housing!

Tell me what you think, and please feel free to forward.

My two favorite solutions are these:

(1) Implement a State Bank for California, a publicly-owned bank that would not only protect us from the destructive games of Wall Street, but it would allow us to invest in California. Imagine a bank run by professional managers with no incentives for risk taking — no super-sized salaries, no fabulous bonuses, no recurring commissions for a short-term focus on boosting profit for quarterly statements. The state-owned bank would partner with local community banks and credit unions, and make good loans to students, homeowners, and local businesses. There are 17 states that are exploring publicly-owned banks. The California legislature passed a bill last fall to establish a task force to study a state bank. Unfortunately, Governor Jerry Brown did not sign it.

(2) Keep only the good of good old Proposition 13. Fix the rotten parts so we can halt the ever-growing disparity of wealth and power. That disparity causes the wealth of very few people to sky-rocket beyond what anybody needs, and hurts the opportunities for the rest of us and especially our youth.

Again, let me know what you think, and please do pass the video along. There is a way out of this mess.

Credit goes to Art Ramsey for the video and especially for the great graphics starting half-way through. Thank you, Art.

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Millionaires Tax wins in polls vs. Jerry Brown’s

March 20, 2012 Leave a comment

The Millionaires Tax was winning in polls as compared to Jerry Brown’s more regressive tax measure, and so he pushed the California Federation of Teachers for a still regressive “compromise” measure.

People know millionaires have gotten all the prosperity, why should Brown deal all of us the austerity? There’s a rally to Continue the Millionaires Tax at the State Building,1515 Clay in downtown Oakland at 4:00 pm today – the first day of spring!

In the interest of pushing for a tax measure than can win in November, last night I emailed the following to CFT contacts.

Begin forwarded message:

From: Laura Wells <info@laurawells.org>
Date: March 19, 2012 10:47:03 PM PDT
Subject: Support a compromise tax initiative that can win

Respecting your time, I’m keeping this under 200 words, and emailing it to all CFT officers and contacts.

How can unions achieve a tax initiative that can win in November, and avert even more draconian cuts to education, social services and labor? Based on attending many meetings this past week, the answer could well be this: eliminate the sales tax increase completely.

Given that the newest initiative petition hit the streets within days of the compromise reached last Wednesday, then there is still time for a new compromise, if Governor Jerry Brown wants to put his power, together with union power, behind an initiative that can win.

In summary:

  • No sales tax increase! This is crucial.
  • Permanent – not temporary income tax rate increases – no ending date.
  • Make total revenue larger than both the Millionaires Tax and the first “compromise” – and have the revenue come from the very highest incomes.
  • Change only the tax specifics, and leave the rest of the initiative. In other words, apply revenue to close the budget gap.

What do you think? Can do?

Sincerely,
Laura Wells
Blogger on the California Budget
2010 Green Party candidate for Governor

LAURA WELLS
blog:  LauraWellsSolutions.com
twitter: Wells4Gov
www.LauraWells.org
510.225.4005

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Occupying Government in Sacramento: Boomerang on the 1%

March 1, 2012 Leave a comment

In places as close as Richmond, California and as far away as South America, people have been combining strong social and electoral movements, so that their governments make decisions for the 99%, not the 1%. We can create participatory democracy and run to win in our representative democracy, side by side.

THE PAST, AND THE 1%: In past elections a majority of people exercised only three choices: vote Democratic, vote Republican, or don’t vote. The 1% loves that system and calls it democracy.

THE PRESENT: Elections changed in California in June 2010 when a so-called “Open Primary” was approved. People like the idea of voting for anyone regardless of political party. But it has a catch, and should be called “Top Two Primary.” Only two candidates go to the November election. Where this has been tried in the past, only incumbents and highly-funded candidates – the 1% candidates – were left standing. But this can boomerang!

THE FUTURE: People in South America – especially the young and impoverished – are voting in much greater numbers than ever before. The 1% loses big. In many South American countries, contrary to the misrepresentation of mainstream media and the powers-that-be, the disparity of wealth is decreasing, and education, healthcare, and people’s participation in their governments are improving. The “Top Two Primary” can boomerang on the 1%. In primaries for California state offices, we can vote for anyone regardless of political party, so we can freely vote for Green, Peace and Freedom, and independent candidates who are not controlled by corporate campaign cash! Then in November we will have real choices. What happened in South America can happen here.

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Open Letter to Governor Jerry Brown

January 5, 2012 13 Comments

I heard your voice on the radio saying that if more cuts are needed, they will come from education because “that’s where the money is!” The reference was to the oft-quoted answer to the question, “Why do you rob banks?”

That little joke, right there, points to the heart of our budget disasters and to the thinking that keeps the disasters in place.

Where is the money? In cuts to public education? In cuts to welfare and childcare? No, the money is in the hands of the super rich. Not in public schools where California’s spending is near the bottom of all the states.

Every single time that you speak about the budget you have a chance to improve the system, or not. You and your Democratic Party colleagues hold huge majorities in both houses of the legislature and 100% of the statewide offices from Governor to State Controller to Insurance Commissioner. Every time you speak and do not condemn the two-thirds majority required to raise taxes, you are selling out the 99% and pandering to the 1%.

I cannot wait until representatives in Sacramento – the current batch or new ones we will elect – catch up with the rest of us. Led by the young people of Occupy, the social movements have shifted from the plea of “Stop The Cuts” to demanding the solution, “Tax The Rich.”

Statistics are readily available to explain to people who love old Prop 13 and its two-thirds vote requirement that their love is misplaced and unrequited.

Explain that California has 94 billionaires with a total wealth of $311 billion. Only 10% of that wealth would close the budget gap. Although it would be a hardship for 6 people since they would no longer be billionaires, and would only have $900 million, they would probably get it back within a year. California would not have to cut welfare, childcare, and schools.

Explain how our tax structure is upside down. As updated every year by the California Budget Project, when you look at family income and all state and local taxes, not just income tax, the poorest 20% pay a higher tax rate than the richest 1%. Families who average $12,600 pay 11.1% and those who average $2.3 million pay 7.8%. That’s where the money is. Wealth like that used to be taxed at higher rates, and in those times people could still get richer.

Explain that a bipartisan budget agreement in favor of the 99% is a fantasy and will never be reached when slightly more than 1/3 of California legislators have signed a pledge that they will never vote to raise taxes. The 2/3 requirement gives that 1/3 minority veto power over taxing the rich. The only bipartisan budget agreement operating right now is the silence about the rotten parts of old Proposition 13.

You were Governor in 1978 when Proposition 13, with all of its damaging unintended consequences (unintended by the voters), was voted into law. It is only fitting that you should undo its damage now.

Sincerely,

Laura Wells

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Who Are Our Champions?

January 4, 2012 Leave a comment

This question from the audience stood out for me more than any other question when I attended the California Budget Project’s 2011 policy conference last March. Sacramento was two months into a budget process that looked like it would be cuts-only, again.

Who Should Be Our Champions?

The 99% in California should be championed by the leadership of the Democratic Party. The people voted Democrats into 100% of the statewide offices (Governor, Lt. Governor, Secretary of State, Attorney General, Controller, Treasurer, Insurance Commissioner, Superintendent of Public Instruction); both U.S. Senate seats; and big majorities in both houses of the state legislature.

Democratic officials should stand together and go to the people who elected them, not to the Republican elected officials who were elected into only 35% of the seats in the Assembly, and 37.5% in the Senate. Almost all of them signed the [Rich] Taxpayer Protection Pledge to never raise taxes no matter what.

What Could Champions Say?

The huge Democratic majority could stand together and tell Californians what politicians have avoided telling us for more than 30 years. Proposition 13 had a rotten part that has hurt California and especially our young people. The 2/3 majority to raise taxes has helped us become a state with 85 billionaires, all the while schools, parks, libraries, water and transportation systems are declining. The 2/3 majority to raise taxes created a situation where the 1% highest income households pay a lower rate of their income in state and local taxes than the bottom 20%.

Education or Excuses?

By education, I mean education both for our youth, and for ourselves so we can improve our situation. By excuses, I mean using the Republican Party as an excuse, instead of using the bully pulpit and all possible power to change the rules and stop granting a small minority veto power over taxing the rich. Will we get education, or will we get excuses and cuts-only budgets, again?

Voters voted in old Prop 13 in 1978. Let’s get educated about the problems Prop 13 brought us and our kids, and let’s vote the rotten parts out.

SOURCES:

85 Billionaires in California

http://www.city-data.com/forum/california/1385158-85-californians-named-among-forbes-400-a.html

Tax rates of the richest 1% vs. poorest 20%

Go to http://www.cbp.org/publications/state_taxes_land.html and click on “Who Pays Taxes?”

Taxpayer Protection Pledge, also called the Grover Norquist pledge

“I, [   ], pledge to the taxpayers of the [   ] District of the state of [   ] and all the people of this state that I will oppose and vote against any and all efforts to increase taxes.”

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Safeguard for You? Two-Thirds Majority to Raise Tax

January 3, 2012 2 Comments

Often when I talk about my wish to get rid of Prop 13’s requirement for a 2/3 majority legislative vote to raise taxes, the word “safeguard” comes up. I hear people say, “You want to do that? I thought needing a 2/3 vote was a safeguard to keep the government from raising our taxes too much.”

That’s a reasonable thought process. Consensus decision-making, with a back-up of super-majority vote, has a long tradition, and is being continued today in the Occupy Movement. It works when a group of people have basically the same agenda, and need to make decisions about how to implement that agenda. However…

How the 2/3 Majority Plays Out in California

California was the only state that required a 2/3 majority to both raise taxes and pass a budget.

The 2/3 requirement to pass a budget was instituted in 1933. Since there were golden years for California’s educational system and employment opportunities in the decades after 1933, apparently the 2/3 majority needed to pass a budget was not a big problem.

The 2/3 requirement to raise taxes was instituted after property-tax-flattening Proposition 13 passed in 1978. A simple majority was kept in place, however, to lower taxes. That resulted in a “ratcheting” effect and a long unlucky streak for California’s schools and opportunities.

In boom years, taxes were lowered with a simple 50% + 1 majority vote. Californians are well aware that the main beneficiaries of lowered taxes in boom years were the 1%, not the 99%. And we’re aware that the 1% is the political donor class, so some of the money kept from taxes went to legislators in the form of campaign contributions. In lean years, we can’t get the revenue back, because it takes a super-majority 2/3 vote.

One 2/3 Majority is Eliminated

In November 2010, a proposition passed to eliminate the 2/3 requirement to pass a budget. A future blog on Bad Budgets Faster will tell behind-the-scenes details about the 2010 movement to eliminate both 2/3 requirements, including how then-Attorney General Jerry Brown impeded the drive to eliminate the 2/3 requirement for raising revenue. We’ll also cover what kinds of taxes do get passed, and which do not, as well as the “Taxpayer Protection Pledge” which should of course be named the “Rich Taxpayer Protection Pledge.”

There are solutions, we need to remember that, solutions including publicly-owned banks like a State Bank and getting rid of the 2/3 majority to raise taxes. Thank goodness we have a growing number of people working on the revolution of solutions.

More to come!

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Crash Course in the California Crash: Prop 13 and the Two-Thirds Majority

January 2, 2012 Leave a comment

You know, it’s my birthday today and I don’t feel like restraining myself, so what if I just let ‘er rip?

Books and articles that focus on the huge problems of California’s government and politics invariably spend a lot of time on good old Proposition 13. I keep trying to come up with a very short phrase to sum up Prop 13 and my latest “slogan” is this: Keep Only the Good of Good Old Prop 13. Here is a two-part definition, the first is more commonly known, even among the youth, who were born after it was passed, and who happen to be on receiving end of its unintended detrimental consequences. That part is “the Good.” The second Part, not so commonly known, is the ugly.

Definition Part I

Proposition 13 was approved by voters in 1978. The voters were sold Prop 13 as a way to solve the problem of seniors losing their homes due to rising property taxes.

Definition Part II – Not So Commonly Known

Proposition 13, in addition to flattening property taxes, “Requires 2/3 vote of Legislature to enact any change in state taxes designed to increase revenues.” (This statement is from the official ballot pamphlet. I point this out because many highly political people do not believe me when I say the 2/3 rule on taxes came in with Prop 13.)

Prop 13 also centralized control of budget and finance, so that cities and localities had less direct control, and Sacramento had more control.

Safeguard?  Governor Brown’s Budget-Busting Role?

These topics will have to be in my next blogs because I’m due at a birthday brunch for me and so I should get going, eh?

Peace and love and all that good stuff,

Laura

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New Year Wishes for the California Budget

January 1, 2012 Leave a comment

Here are my two big wishes for the California budget. The real bottom line is to create a better than ever California, with justice and peace, great schools, environment, and jobs. The challenges are huge, but the Occupy Movement has inspired real hope, and the movement will not stop. My wishes:

One: Begin to get rid of the 2/3 majority vote requirements for raising revenue. My wish is that 2012 will be a banner year for increasing people’s awareness of how the 2/3 requirement has handed a small minority veto power over taxing the rich, and has kept in place an excuse-ridden system that produces cuts-only budgeting in our wealthy state. Voters can fix this.

Two: Begin to implement publicly-owned banks in California. My big wish is for a State Bank to be established, so that it will partner with local banks and credit unions; provide good loans to homeowners, small businesses, and students; and invest in California not Wall Street.

My part in all this? By running for statewide office as a Green Party candidate I’ve become more and more expert on the process of the budget. I plan to share my expertise and insights in every way I can.

Post a Blog-a-Day on the Budget

As we enter January 2012, my goal is to blog frequently on the budget. January is the month the annual budget process (fiasco!) begins in California. The Governor is required to introduce a balanced budget proposal by January 10, and the Legislature is required to pass the annual budget bill by midnight on June 15.

Provide a Voice for Budget Solutions rather than Budget Excuses

We’re setting up speaking engagements and interviews at colleges, on radio and TV, and every other medium possible, How can you help? Post your questions and comments; provide speaking opportunities; and spread the word so people know we can have a “revolution of solutions.”

Another California is possible.

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YouTube: We won’t stop – Tax The Rich!

December 7, 2011 Leave a comment

Just posted to YouTube; text is below and here’s the video link:  Laura Wells – We won’t stop – Tax The Rich!

This is a quick response to an open letter about taxes from California Governor Jerry Brown.

I ran for governor as a Green Party candidate in 2010 against Brown, and was arrested outside a debate. But, just like the people all over this state, we may get arrested, but we will not stop.

There are solutions. We need to know that, to keep heart and to keep growing this movement – this Occupy Movement – which is being led by our young people.

For years, people have been calling on Sacramento to stop the cuts, and now we’re calling for the solution: tax the rich. Thirty to forty years ago the richest 1% were taxed much more, and they could still get richer. Just not filthy rich.

In his letter, Governor Brown talks about a ballot initiative that would increase sales tax on everybody, and would increase income tax a little bit on higher incomes. This proposal would hit the vast majority of us – the 99% – by increasing the tax we pay almost every day: sales tax. Already in California it’s almost 10%.

Proposals like this one from Jerry Brown cause the disparity. When you look at all the state and local taxes in California, people in the lowest one-fifth as to family income – with an average of $13,200 per year – spend 11.1 percent of their income on state taxes. The wealthiest 1%, with an average income of $2.2 million, spend 7.8 percent of their income on state taxes.  That’s what this kind of proposal perpetuates.

Let’s look at real solutions, like a state-owned bank to partner with local banks and credit unions, and invest in California not Wall Street.

As to taxes, let’s look at a tax on financial transactions; let’s look at an oil severance tax, like all other oil-producing states; and let’s look at real progressive income taxes.

In order to correct the trend that started 30 to 40 years ago, let’s keep only the good of good old Prop 13. Close the corporate property tax loopholes, and fix the rotten part of Prop 13 that gave a 1/3 minority veto power over taxing the rich. Bipartisanship is the game they play to keep this system in place. Gridlock is their excuse for drastic cuts, and for taxing the rest of us, and not the rich. Only voters have the power to fix it by passing a state proposition.

We will change this system. They can arrest us, but they won’t stop us.

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