The Kersten Institute for Governance and Public Policy has formed a PAC called "California's Future," to oppose the Prop. 55 tax increase that is headed for the November 2016 ballot, among other campaign activities.
While some taxpayers, businesses and stakeholders may be content to side on the sidelines and watch Prop. 55 pass, that is not an option for me. Prop. 55 would extend the ultra high income tax brackets set in place by Prop. 30 (2012) tax hikes for another 12 years.
Over the last few years, California has reaped record tax revenues, but the Democrats who control the California Legislature has shown zero fiscal responsibility. Despite collecting record amounts of tax revenue over the past few years, the State of California has continued to go further into debt and now stands more than $400 billion in debt.
I have studied the impact of Prop. 30 and its not pretty. When Prop. 30 was passed in 2012 it was sold as "essential" to "prevent budget cuts" for education and public safety programs. The Legislature and Governor even decided it was prudent to spend most of the revenues for 2012 before the tax increase even passed.
The truth is that the passage of the measure lead to an immediate "chilling" of the California economy, and a steep drop in business activity and tax revenue for the impacted taxpayers which included individuals and small businesses who make over $250,000 per year.
Moreover, new data shows that there has been a recent 15% drop off in income for these same classes of taxpayers from 2015 to 2016. Continuing this tax on individuals and small businesses when it is no longer needed represents nothing less than a $7-8 billion "taxpayer ripoff"--a windfall for special interests.
Prop. 98 education revenues have increased by more than 50% since 2012, yet the public employee unions, who have contributed more than $20 million to the Prop. 55 effort say they need even more money.
This assertion is completely false. Continuing these tax increases will only serve to provide a public slush fund for public employee union interest to further line their members pocketbooks and pay for unsustainable benefit costs, namely pension and heath care. There is zero accountability to how the money will be spent, and no ties to increased results or accountability for the state's education system.
Prop. 55 represents a pure handout to the unions, on the heals of record revenues collected by Prop. 98 education programs over the past few years.
Somebody needs to take a stand against these special interests before it is too late. Polling and focus groups show that voters think the public unions are the "good guys" but the reality is that these interests are just as greedy and corrupt as some of the worst special interests in Sacramento, perhaps even worse due to their unique ability to manipulate the state's political system.
I used to work for the unions, and I know that they will not stop at nothing to maximize their paychecks, even if they are already compensated at rates way over the market value and what is fair based on salary survey data. Excessive public employee compensation represents a raid on the public treasury, and Prop. 55 represents the most egregious example of a pure taxpayer ripoff.
It is a common misconception that these ultra high tax brackets will only effect high earners. That's not true. Small business bears the brunt of the impact, and this will impact all Californian's in terms of lost economic output and wages. Similiarly, the resulting drop off in income tax revenue at the top brackets will hurt the state's general fund and economy, not help us endure a looming recessionary period.
California already has the highest income tax rates in the country on individuals and small businesses. We need to look at reducing these rates, not raising them.
Prop. 55 is currently opposed by the California Chamber of Commerce, National Federation of Independent Business, Howard Jarvis Taxpayers' Association, and the California Republican Party.
I know that many businesses and taxpayer groups plan to oppose Prop. 55 in some way. The activities California's Future PAC intends to compliment, not supplant, these efforts.
The intent is to help coordinate campaign activities against Prop. 55 to maximize the chances for defeating the measure in November.
I welcome all individuals and California businesses who care about California's future to join the efforts of California's Future PAC in opposing Prop. 55.
Some supporters of Prop. 55 think that because they have $20 million plus in the bank, that this campaign is a slam dunk. But the truth is that they are on the wrong side of the issue, and once the true facts of this issue come to light, I believe Prop. 55 is a lot more vulnerable to defeat that most supporters would like to admit.
California's Future PAC is currently in the process of setting up a steering committee to ensure accountability, participation, and communication among major campaign stakeholders. Please do not hesitate to contact the campaign if you have an interest in being part of the effort to defeat this "taxpayer ripoff."
For more information please visit: www.opposeprop55.com