Given last week’s discussion and a blog post on Prop 13, I
thought this might be of relevance.
Background: Prop 30 (titled Temporary Taxes to Fund
Education) was passed in 2012 by CA voters on the ballot. In order to prevent
significant education budget cuts, it called for both a 7 year personal income
tax increase for residents with over $250k income and a statewide sales tax
increase by .25% until 2016. It was estimated to bring in over $6 billion in
additional tax revenue, which would then be used to fund public education.
Article: Activists are currently trying to campaign for Prop
30 extensions; one such campaign backs the “Invest in California’s Children
Act,” which would make the personal income tax increase permanent, while
increasing taxes for $2+ million household earners. Governor Brown, who ardently
campaigned for Prop 30 in 2012, has repeatedly stated that the tax increases
were meant to be temporary (hence Prop 30’s title), and has not come out in support
of such initiatives as of yet. The estimated tax revenue is estimated to be
around $10 billion.
Another such campaign supports the “School Funding and
Budget Stability Act,” which would extend the increased income taxes until 2030
and not raise taxes on households earning more than $2 million.
Arguments against such tax hikes include fears of scaring
away millionaires and business owners due to CA’s high taxes – CA had the
highest sales tax rate in the nation, according to a 2013 study from Tax
Foundation, and a 13.3% income tax rate for $1 million earners, also the
highest in the nation.
So what to do? Increase education funds through higher
taxes? Is this the only viable way to increase the quality of CA’s school systems?
Do these two proposed initiatives seem sound, or is more compromise necessary?
If you were a top earner, what would your incentive be to stay in California as
opposed to moving to Texas, where the income tax rate is 0% and other taxes in
general are much lower?
Tax Foundation Study 2013
1 comment:
If you look at this article here (http://www.mercurynews.com/ci_24443873/proposition-30-year-later-california-schools-seeing-benefits) you can see all the benefits hat Proposition 30 has brought to local public schools. Instead of facing million dollar budget cuts, schools are getting increased funding which means more teachers and programs for students. For example, if Proposition 30 had failed both Palo Alto and San Bernadino school districts would have had cuts of about $5 million. Therefore, I think Prop 30 should be extended. In my opinion, education is one of the most important aspects of people's lives, and all students should have access to resources at their schools, which all require funding. However, as a top earner I would possibly be angered by the tax because a large percentage of people making over $400k send their children to private schools. This means that the people contributing most to schools, are not even receiving the benefits of the funding. I still think as top earners they should be required to fund the schools, but for them it may be an incentive to move away.
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