The Blog at CTA

Taxes Aren’t Driving Millionaires from California, Stanford Study Finds

A newly released study by two Stanford professors debunks assertions by tax foes that California’s “high taxes,” including past increases and those pending on the November ballot, are leading millionaires to leave the state in droves.

“Millionaire Migration in California: The Impact of Top Tax Rates,” by Stanford Professors Charles Varner Cristobal Young, concludes that the number of millionaires in California fluctuates not because of “net migration,” but because the flow of money results in some rising into millionaire status one year and falling out the next.

The researchers conclude that those who become millionaires are “having a good year” and are reluctant to move out of state.

Further, neither tax increases nor tax cuts had a significant effect on the number of millionaires entering or leaving the state, the researchers conclude:

“Using difference-in-differences models, which compare migration trends of the group experiencing the tax increase to a group of high-income earners not facing a tax change, neither in-migration or out-migration show a tax flight effect from the introduction of the 2005 Mental Health Services Tax. In fact, out-migration has a “wrong-signed” estimate: out-migration declined among millionaires after the tax was passed (both in absolute terms and compared to the control group). In other words, the highest-income Californians were less likely to leave the state after the millionaire tax was passed.”

The issue of whether a millionaires’ tax is counterproductive is one that has been raised by opponents of Proposition 30, the governor’s revenue measure that would provide billions for schools by raising income tax rates on the state’s top 1% wealthiest residents and temporarily boosting the sales tax by 0.25%.

For more information about the study, see Millionaire Migration in California.

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Educators in all-out effort this weekend to GOTV on Nov. 6

We're PUMPED! This is who we're fighting for on election day!

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Governor making rounds to garner support for Prop. 30

Gov. Jerry Brown and Senate leader Darrell Steinberg

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Reporter Hits Prop. 32 as "Unfair," Slams Decisions by Wealthy at State's Expense

During one of two panel discussions that were part of Wednesday morning’s Public Policy Institute of California’s forum on Improving California’s Democracy, former Los Angeles Times Reporter Joe Mathews declared his opposition to Proposition 32, the Special Exemptions Act on the November ballot. As former lawmaker Sunne McPeak looked on, Mathews said, “I’m not a big fan of public employee unions, but Prop. 32 is not fair.”

Further, Mathews took on rule by the wealthy, arguing that “Associations are the real bulwark against people width money ….where all decisions are made by Charlie and Molly Munger at family reunions.”  Molly Munger, the sponsor of Proposition 38, a funding measure on the November ballot, has reportedly put more than $30 million behind the initiative.  Her brother, Charles, has reportedly put more than $4 million behind Proposition 32, the Special Exemptions Act that seeks to undermine the involvement of working women and men in the political process. Mr. Munger has also reportedly put millions into the No on Proposition 30 campaign.

Mathews, author of a political biography of former Gov. Arnold Schwarzenegger and a book on California's political reforms, is now the California edtior of Zocalo Public Square.

Should Proposition 30 fail, automatic trigger cuts would cut another $6 billion from public education funding, on top of more than $20 billion in funding slashes that have decimated the state's K-14  education system. Should Proposition 32 pass, it would increase the advantage that corporations, real estate investment trusts, limited liability corporations, and other corporate entities would have in the political arena. These entities already outspend middle class women and men and the unions that represent them by a ratio of 15 to 1.

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Anti-Prop. 30 Ads Hurting Chances, but Not Helping Prop. 38, Pollsters Suggest

A newly released poll of 830 voters has led its technical leaders to conclude that ads by the Proposition 38 campaign and its primary sponsor, Attorney Molly Munger, are harming Proposition 30 -- the revenue measure sponsored by Gov. Jerry Brown -- widthout materially improving the rival school funding initiative that is also on the November 6 ballot.

Should the negative advertising lead voters to reject Proposition 30, it would cost public education more than $6 billion, the amount to be pared from K-14 public education and the state universities by automatic or "trigger cuts" included in contingency language in the already passed state budget.

Topline results released Thursday morning by the California Business Roundtable, Pepperdine University, and M4 Strategies, show that in the wake of Proposition 38's ads, support for Gov. Brown's Proposition 30 has slipped below the 50% support level for the first time.  Prop. 30, according to the CBRT/Pepperdine Poll, now stands at 49.5% for and 41.7% against and 8.8% unsure.

By contrast, the support for Proposition 38 has remained nearly unchanged, width 41.9% supporting and 45.9% opposing the measure and 12.2% unsure.

The pollsters say the survey has a margin of error of plus/minus 3.4%, based on phone calls made between October 7 and October 10.

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Field Poll: More than 72% Oppose Automatic Cuts to Public Education, Safety

The vast majority of California voters – more than 72% of them – oppose the automatic or “trigger cuts” in the state budget that will take effect if the governor’s November revenue initiative is rejected, according to a Field Poll released on July 4.

Only 19% of those polled say they favor the trigger cuts, which will slash another $6 billion for K-14 public education and the state’s two university systems.

Voters can protect schools and public safety programs from these cuts by approving the governor’s Protect Our Schools and Local Public Safety Initiative on the November general election ballot.

The measure would raise an estimated $9 billion by raising income taxes on the state’s wealthiest residents and temporarily boosting the sales tax by a quarter of one percent.

More information about the Field Poll can be found at July 4 Field Poll Release.

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State Treasurer Lockyer Says He'll Cast Ballot for Governor's Revenue Plan to Protect Schools, Local Public Safety

State Treasurer Bill Lockyer is the latest in a growing list of public officials who are standing width the California Teachers Association and millions of working women and men to support Gov. Jerry Brown's November ballot measure that would stave off additional devastating cuts to public schools and local police and other protection services.

The governor's "Schools and Local Public Safety Protection Act of 2012" would raise $9 billion annually -- more than $6 billion of it for K-12 schools, the community colleges, and the state's university systems -- by boosting income taxes on California's wealthiest families, those earning more than $500,000 annually.  The initiative would also temporarily boost the state's sales tax by a quarter of one percent.

"I'm voting for the governor's tax proposal," Lockyer told members of the Sacramento Press Club Thursday, according to the Sacramento Bee's David Sider.  "The cuts to education if it doesn't pass are so severe that it will injure our ability to produce an informed citizenry and workforce that we need for the future of California, so I'm a 'yes' vote."

To read more about the state treasurer's comments, see Sider's State Treasurer Bill Lockyer says he's a "yes" on Jerry Brown's tax measure.

For more information about the "Schools and Local Public Safety Protection Act of 2012," see  Protect  Schools and Public Safety.



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Empire Strikes Back: “Anti-Tax Crusaders” Launch Attack on Measure to Protect Schools

With the primary election balloting barely a week old, three groups of anti-tax forces are set to announce they have put their gun sights on a November revenue initiative that would protect public schools from another $6 billion in devastating cuts.

The business groups – The National Federation of Independent Business/California,  the Howard Jarvis Taxpayers Association and the Small Business Action Committee  – have scheduled a 10 AM news conference Tuesday in Sacramento to announce their efforts to defeat the Schools and Local Public Safety Protection Act of 2012,  according to Joel Fox, President of the Small Business Action Committee.

That ballot measure – spearheaded by Gov. Jerry Brown and backed by teachers, firefighters, law enforcement officials, and other supporters of vital public services – would provide $9 billion by taxing families making more than $500,000 annually and temporarily boosting the sales tax by one-quarter percent.

The revenues would protect local public safety services and stave off cuts to K-12 public education that could force local schools to cut short their instructional school year by more than three weeks.

Educators, education support professionals, firefighters, police officers, and other backers of the schools and public safety revenue measure are already hard at work educating their colleagues, parents, and community members about the crucially important choice they will have in November.

Click here for an information sheet about the revenue measure: Protect  Schools and Public Safety.

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