There is little doubt that Governor Jerry Brown, who has struggled to get a handle on the budget, will applaud the findings in a recent PPIC (Public Policy Institute of California) poll that shows 68 percent of likely voters (and 72 percent of all adults) favor the his tax proposal.How strong is that support? Even Republicans are found to be slightly more likely to favor (53%) than oppose it (46%).
But digging down even deeper, we see there is a clear driver of these numbers, and it is support for public schools.
As John Myers from KQED writes, “As several other questions in the poll make clear, it’s probably not Brown’s proposal that they love so much… but rather the consequences of its failure that they hate.”
The consequence of failure means more cuts to education that has taken it on the chin virtually every year since the economy began to falter and revenue declined, as early as 2007.
If the tax measure fails, the governor has proposed automatic cuts to education – something that is opposed by three-quarters of likely voters including 67% of Republicans.
“There’s no question that if this was just a general tax increase,” says PPIC president and pollster Mark Baldassare, “that you’d have a whole different response.”
The governor has proposed to get the revenue largely through two different types of taxes – one an increase in the income tax on the wealthy and the other an increase in the state’s sales tax. The initiative would temporarily increase the state sales tax and the personal income taxes of wealthy Californians, with the new revenue going to K-12 education.
The PPIC survey asked separate questions about specific taxes that could be increased to help reduce the budget deficit, including two that are part of the governor’s tax initiative: income taxes on the wealthy and the state sales tax.
Not surprisingly, what the voters really support is the tax hike on the wealthiest Californians, which resonates with the one percent mantra of the Occupy Movement. The poll found that Californians strongly favor (74% adults, 68% likely voters) raising the top rate of state income tax paid by the wealthiest residents.
Voters even support commercial property tax increase protections out of Propostion 13. Mr. Myers notes that “an initiative to do just that was just cleared for signature gathering, though for now it’s seen as a concealed weapon of labor unions in their bid to stifle fundraising for the ground zero initiative on political donations by paycheck deductions.”
At the same time, the willingness to support tax hikes is limited.
However, large majorities of Californians (69% adults, 64% likely voters) oppose raising the state sales tax. Majorities across parties are against this idea, although Democrats (54%) are less likely to oppose it than independents (71%) or Republicans (74%).
“The challenge the governor faces with his tax initiative is that one generally popular tax increase – raising personal income taxes on the wealthy – is paired with one generally unpopular one – raising the state sales tax,” Mark Baldassare notes.
Writes Mr. Myers, “Undoubtedly, the governor’s most liberal supporters will see that kind of poll data as proof that any one of the other tax initiatives that are out there is better than his. And Brown has yet to dissuade all of those groups from launching their own campaigns in competition with his.”
Moreover, a good percentage of the electorate sees government cuts as the way to go.
The PPIC poll also found that while 40 percent of adults and likely voters prefer closing the state’s budget gap with a mix of spending cuts and tax increases – the approach the Governor has proposed – similar proportions (35% adults, 41% likely voters) prefer closing it mainly through spending cuts.
Indeed, Californians are far from happy with the way the state spends its money. Most (59% adults, 55% likely voters) believe state government could cut spending and still provide the same level of services. Most (59% adults, 62% likely voters) also favor strictly limiting the amount of money that state spending could increase each year.
“There remains a strong belief that the state government could spend less and provide the same services even as Californians notice local service reductions from state spending cuts and show early support for a tax increase,” said Mr. Baldassare.
Asked a fundamental question about the size of government, 51 percent of Californians would prefer to pay higher taxes and have a state government that provides more services, while 41 percent would prefer to pay lower taxes and have a state government that provides fewer services.
The bottom line would appear to be that education is driving the support of the governor’s tax plan.
When asked if they would pay higher taxes to maintain funding levels for the state’s four largest areas of spending, Californians are most willing to do so for K-12 public education (72%, adults, 62% likely voters), followed by health and human services (57% adults, 49% likely votes) and higher education (57% adults, 46% likely voters).
On the other hand, just 13 percent of adults and 12 percent of likely voters would pay higher taxes to maintain funding for prisons and corrections.
Californians hold these views at a time when most (62% adults, 60% likely voters) say their local government services have been affected a lot by recent state budget cuts. Most (55% adults, 59% likely voters) say that K-12 public education is the area of state spending they most want to protect from budget cuts.
Far fewer adults choose one of the three other main areas of state spending: higher education (19%), health and human services (17%), and prisons and corrections (6%).
Those who believe that the Davis School Parcel Tax election is going to be another nail biter ought to pay particular attention to these numbers. If 85% of Democrats favor paying more in taxes to support education across the state, you have to think at least that percentage in Davis will be inclined to vote to maintain the current parcel tax.
—David M. Greenwald reporting
The problem with the sales tax increase is that it is a regressive tax that disproportionately effects the poor. Also, CA has the highest sales tax rate in the nation according to: [url]http://retirementliving.com/RLtaxes.html[/url]
[quote]States with the highest sales tax are: California (8.25%), Indiana (7%), Mississippi (7%), New Jersey (7%), Rhode Island (7%), Tennessee (7%), Minnesota (6.875%), Nevada (6.85%), Arizona (6.6%), Washington (6.5%), Kansas (6.3%), Texas and Illinois (6.25%). [/quote]
It’s a real problem when the state is cut off from other more fair and lucrative forms of revenue such as property taxes.
[quote]It’s a real problem when the state is cut off from other more fair and lucrative forms of revenue such as property taxes.[/quote]
Doesn’t make an increase in sales tax any fairer…
An argument can also be made that bc CA’s sales tax is the highest in the country, people are more likely to purchase goods out of state…
“An argument can also be made that bc CA’s sales tax is the highest in the country, people are more likely to purchase goods out of state…”
And once they up taxes on the higher earners, they’ll be moving out of the state.
Elaine: Fair would take a far more in-depth analysis than I’m prepared to get into this morning. It would need to be balanced a whole range of factors.
Rusty: Or they’ll find a way to shelter it.
Let’s get this straight…
ANY tax increase of any kind will be passed on to the consumer/public and will impact low income people the greatest.
Increased property taxes will cause more business ideas to not pencil out and will impact economic development. Increases to residential property taxes will put home ownership out of reach for more people and will impact the construction industry that provides low and medium-skilled jobs needed by low income people.
Raising taxes is worse than a zero-sum-game, because the Laffer Curve is real.
Did anyone read how the increase in Cigarette tax in the state has led to lower cigarette consumption and therefore even lower tax revenue?
A few points in contrast to Jeff’s
First, certainly a sales tax is not only passed on to the public, is put on the public. But other taxes are not necessarily passed on to the public because the market sets the over cost.
Second, raising taxes is not ideal. The problem is that what constitutes raising taxes from your perspective is too limited. Cutting government spending is the alternative – something that we have consistently done. The problem with cutting government spending is that it too harms the economy.
Moreover, cutting government spending not only harms the economy but it can itself led to de facto tax increases. For example, cutting funding to higher education leads to a tax on the parents of middle class students impacted by tuition hikes. That’s just as real a tax as an income tax or a sales tax. But Republicans don’t count it as such. Cutting benefits for food stamps or welfare is also a tax on the poor.
[i]”But other taxes are not necessarily passed on to the public because the market sets the over cost.”[/i]
ALL taxes are passed on. Business does not just absorb it as some charity measure. Over time the comsumers get used to paying the higher prices, but they will still pay higher prices.
I don’t know if you have any experience running a business, but taxes are just another expense. If a business gets hit with increased tax expense, it will either raise prices, or reduce other expenses like employee pay and benefits… or some of both. In any case, it hurts the low income and middle-class folk the most.
[i]”Cutting benefits for food stamps or welfare is also a tax on the poor.”[/i]
Uh, no. Do I need to define to you what a “tax” is?
The strategy should be to grow the economy to REPLACE benefits for food stamps and welfare with pay from a job. You do the oposite if you raise taxes.
Liberals are going to have to learn to get over class envy… since a growing economy means more wealthy people.
“I don’t know if you have any experience running a business”
The Vanguard, while a non-profit, is a business.
“In any case, it hurts the low income and middle-class folk the most.”
As does cutting government spending.
“Uh, no. Do I need to define to you what a “tax” is?”
No. What I suggested to you is that there are cuts to government spending that are de facto taxes – government actions that take away existing money from people. Is it really different to tax cigarettes or raise tuition? No. Only the form differs.
[i]”The Vanguard, while a non-profit, is a business.”[/i]
Okay, so what if your business taxes increased? What would you do to “absorb” the added expense?
And if you say: “get more donors”, then you would of course recognize that your new donors would have less to give to another non-profit… thereby impacting some poor people.
And if you say: “sell more advertising”, then you are working longer hours and not spending time with your kids to help them with their school work… thereby impacting them and increasing the potential they become poor people. Also, companies generally have a fixed marketing budget, so by earning their business you are taking business away from some other hoster of advertising content also dealing with the state-wide tax increase.
And if you say: “take a lower salary” other than being respected for your charity by some, you will have less take-home pay and shop less and cause a local business to have a drop in sales that results in reduced work hours or cut jobs.
Don’t think “cutting”, think “replacing.” Replacing government hand-outs with a job that enables the person to buy her own food and pay her own rent. Growing jobs requires economic development that best responds to low and lowered taxation.
You have a stack of business startup and expansion proposals and a list of exising viable businesses. Raise taxes and more of the new/expansion prosoals go to the “no” pile while more existing businesses fail. Lower taxes and more of the new/expand projects get done, and more existing businesses stay in business.