Big money backs reshaped tax system

November 20, 2011

A $10 billion tax increase for Californians is the objective of a ensemble of billionaires and political insiders seeking to place an initiative on the Nov. 2012 ballot.

Proposing an answer to the state’s constricting finances, a group calling itself the Think Long Committee (TLC) envisions an additional $5 billion for public schools and billions more for public universities and local governments.  [Los Angeles Times]

Included on the TLC panel are philanthropist  Eli Broad, billionaire investor Nicolas Berggruen, Google Chairman Eric Schmidt, and former governors Arnold Schwarzenegger and Gray Davis. The committee plans to unveil its proposal Monday in Sacramento.

Berggruen said he will sink $20 million of his own money into the campaign.

Funding will “not be a problem this group will have,” he said.

Based on reorganizing the current state tax system, the blueprint would lower California’s personal income and sales tax, create a new tax on services which currently escape levies, and eliminate most state income tax credits.

The proposal’s primary opponents will come from public education unions.


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This is a Trojan Horse!

I interpret this as a new tax on labor aka “services”.

Labor like health care should not be taxed.

Labor is misery in itself, now they want to impose a new labor tax aka “service tax”. This will provide a demoralizing and place additional burden on individual self employed citizens.

Small business and self employed are struggling to afford health care as it is. Now they want to tax a service transaction.

What, is the State Board of Equaliztion going to expand it’s role in our lives by requiring additional paperwork and accounting for this new tax?

Keep taxes in the rhelm of corporate, goods sold and property and not with “labor or services”.

They call it “Services” but it’s labor plain and simple.

This is a huge tax on small business, the real backbone of our economy.

Their proposal reminds me of the new taxes imposed on us by the British just prior to the Revolutionary War. I recall some rather violent opposition to them.

I really dislike the fact that these proposals are designed in backroom meetings without public input. Why make such huge changes? If California wants to test service taxes, why not just start a 1% service tax. But sales taxes and service taxes are regressive and a heavier burden for those who aren’t rich.

They claim that the income tax reductions would save the families in the $45k-$95k income bracket 40% on their tax bill. Yet they claim that their proposal will generate an additional revenue of $10 billion for the state. Who do you think is going to pay the additional $10 billion?

I’m all for closing loopholes and simplifying taxes, but I’m not interested in poorly documented proposals that drastically overhaul our existing systems.

The last paragraph is the headscratcher for me. How do the public education unions have a dog in this fight?

The proposal specifically states that education and medical services will not be subject to the service tax, so I’m wondering why they would be galvanized against it as well.

The proposal also supposedly earmarks over $5 billion to education. If educators were assured of those funds, I would think that they would support it rather than fight it.

Main problem: the $10 billion doesn’t go to balance this state’s budget – already at least $7 billion siphoned off for spending increases, not debt relief. Main benefit: lower income tax rates in exchange for additional sales taxes (this time on services). At least with the sales tax, I get to decide (in most cases) whether or not I pay a tax — want a new deck? Don’t have to do it unless I choose it. Want carpets cleaned? I can do it myself and avoid the tax. I get to decide! (the plumber, now that’s a different deal if it’s an emergency, but not if what I want to do is remodel). On balance, I would support it if it all went to debt and deficit reduction.

Seems to me that the public will start mowing their own lawns, clean their own carpets, snake their own drains etc., and all of those businesses will suffer.

The billionaires never, ever suffer, no matter what happens to our taxes. Paying taxes out of their billions is NOT one of their problems like it is for the rest of us.

I’m inclined to think that the “deficit” is a FRAUD. If I’m wrong and it’s not FRAUD, it was caused by FRAUD.

If I am right and it was caused by FRAUD, it’s for the purpose of perpetuating MORE FRAUD. Either way, FRAUD is involved and I want no part of it.

In any case, the budget could be shored up by closing down needless programs.

What a bunch of bs. OK, you need a plummer, tax that. You need a deck built, tax the contractor labor. You need carpets cleaned, tax that. These guys are promoting this so they don’t get taxed. Lying sobs.

From the LA Times article: “Think Long spokesman Nathan Gardels said members want to “maintain California’s progressive tax system.” Under their proposal, families earning up to $45,000 a year would pay no state income tax, while those making up to $95,000 annually would pay 2%. This would lower some taxpayers’ obligations significantly.” The main increase, it seems, is in starting a new tax, on services not currently taxed, like professional services. This seems on the surface to be somewhat similar to what those who want a “flat tax” to be implemented. I agree that the entire plan needs to be examined fully before it can be truly debated though.

Big money backs nearly every initiative. There are billionaires on all sides of the political spectrum.

Let’s see what it is, and then decide if it is evil. Until then, I am withholding judgement.

I’m not withholding judgment. Those folks all have a track record &, thus far, they’re not pro-liberty by any stretch of the imagination. And it doesn’t take a genius to figure out that increasing taxation is NOT the way to stimulate a depressed economy; it’s a way to completely destroy it.

How so?

See for yourself.

Better yet, watch “The Monopoly Men” the documentary & “Comprehensive Annual Financial Reports,” also a documentary.

KimM, well said, I totally agree. In a bad economy, it is SOP to CUT, CUT, CUT, taxes. That stimulates the hell out of an economy like nothing else. Though it’s counterintuitive, this RAISES tax revenues! It’s a no brainer. It’s Econ 101.

Qui bono?

Millionaires & billionaires pour their own money into a “campaign” to tax other people & we’re supposed to believe it’s a beneficent act?

If they really care so much, why don’t they just pour millions & billions of their own money into the state’s coffers?

THEN I would be impressed.

Love the rich people who want to raise taxes, hey, if you want to give more do it, no one is stopping you. I’m barely making ends meet so leave mine alone!

No where in the article does it say the millionaires would be raising their own taxes. I suspect theirs will be coming down. Ours will be going up.

In the report attached to the article, it says that 62% of CA personal income tax will be paid by the top 5% of filers. How much more should they pay?

What happens when that 5% of the population wants to leave the state? What happens when those 5% have a bad year and make nothing? State tax income goes DOWN and maybe way down. Pretty stupid putting all your eggs in one basket.

Not to mention it’s pretty unfair to the 5%.

But it’s hard for most generate a lot of sympathy for the rich.


I don’t think they are after your money if you’re “barely making ends meet.” I think they are after money that is getting spent, not money that’s getting earned.

Knowing nothing other than this article, it sounds like thems without money to spend will avoid the tax. Thems that hire attorneys, accountants, housekeepers, painters, etc. will be the losers should this initiative bear fruit. I am sure you’ve looked into the issue more than me — school me on how I’m wrong.

Upon further consideration, I see how this will benefit the rich.

Based on my comments above, UNSPENT money avoids taxation. And, who has all the unspent money?