EDITORIAL: Yes on Prop. 30

By BP Editorial Board

Who knew taxing the one percent one percent could be so hard?

The numbers aren’t exactly that – it’s more like taxing the top three percent one, two or three percent – but the problem is the same. In perhaps the most important and closely contested referendum on next month’s statewide ballot — Proposition 30 — Governor Brown proposes we divide the $250,000-and-up state income tax bracket into four different categories, and tax each one at a different rate.

For an annual income of $250,000, the state tax rate would increase from 9.3 percent to 10.3 percent; income at $300,000 or above would be charged 11.3 percent; income at $500,000 and above would be taxed at 12.3 percent, and the California income tax rate on income over $1 million would increase from 10.3 percent to 13.3 percent.

As it stands now, annual incomes between $250,000 and $1 million are taxed the same percentage — that is, California taxes someone who makes $800,000 a year and someone who makes $300,000 a year at the same rate. Only above $1 million does a new bracket begin.

So, right now we differentiate between the rich and uber-rich. But what about the super-rich, mega-rich, and everyone in between? They have expendable wealth; for example, they’ve donated $30 million to the campaign against this proposition. A graduated system of brackets would take advantage of this tiered affluence.

If Prop. 30 is approved — and right now the polls show it leading very slightly with a more than 6 percent of voters still undecided – new revenue estimates range from $6.8 to $9 billion, which California desperately needs to offset state debt, fund public education and critical services, or both.

The arguments against Prop. 30 are generally nitpicky and whiny. For instance, “It doesn’t implement any reforms.” True, it doesn’t extend itself beyond its scope. That’s because it doesn’t have to. No matter how much money we save through reform, we’ll still need to tax to keep our emergency services, social programs, and government working without furthering the debt.

Objections like this are also disingenuous. No societal problem is an island, and even unrelated issues can be concatenated to oblivion. The problem is, and every critic knows this, that the more topics a proposal addresses, the less likely it is that a large population will agree to support it.

Another gripe is the familiar “It’s my money!” This argument and its variants seem to take issue with the idea of paying taxes, not with the relative amounts, so they are hard to address. But to put things in perspective, if the Bush tax cuts — two bills that have lowered income taxes on roughly the same demographic — stay in effect, this small state tax will hardly make a difference. It’s more than fair.

Last year’s Occupy movement tried to divide citizens into the 1 percent who own everything and the 99 percent who struggle. But Gov. Brown’s proposal has had the surprising effect of dividing people along very different lines.  Plenty of people in the top 1 percent – including Steven Spielberg and David Geffen – support this bill, and plenty of middle income people oppose it.

Whatever happens, the result of the election will unite all Californians. If Prop. 30 fails,100 percent of Californians will live in a poorer state. And if it passes, 100 percent will benefit, by living in a state with better public education at all levels, better infrastructure and better fiscal health.  We strongly endorse it.

Related: Death, food and taxes: A trio of moral dilemmas faces California in propositions