Advocates Demand Lawmakers Vote on Two Bills to Tax Mega-Millionaires & Billionaires Before Legislature Adjourns
Contact Anthony Matthews, (202) 297-3830
Revenue needed to invest in California’s recovery before today’s crises become catastrophes
Sacramento, CA — The Commit to Equity coalition is demanding lawmakers vote on new legislation to tax the income and wealth of mega-millionaires and billionaires before the State Legislature adjourns at the end of this month, arguing more tax revenue is needed to invest in California’s recovery from the COVID-19 pandemic, historic unemployment, and enduring racial inequity. With the state’s finances in deficit, cuts to schools, healthcare, and essential community services will be inevitable without new taxes, which will set back California’s recovery and widen racial inequity as they did in the Great Recession.
The coalition’s demand follows wealth tax legislation being amended into AB 2088 today by Assemblymember Rob Bonta (D-Oakland) and last week’s Senate hearing with no vote taken on a millionaire’s income tax in Assemblymember Miguel Santiago’s (D-Los Angeles) AB 1253. Both bills were introduced in the context of growing inequality. During the first months of the COVID-19 pandemic, the 154 billionaires who live in California got over $175 billion richer, and 11 more became billionaires.
“Students, teachers, and staff are relying on the legislature and governor to fully fund our schools so that they have the resources to safely reopen,” said Jeff Freitas, President of the California Federation of Teachers. “Students are returning to virtual and in person learning across the state, facing real problems today that our state leaders are attempting to push off until tomorrow. A tax on the wealthiest Californians, who are continuing to profit in the midst of a global pandemic, would be a massive investment in our kids and their futures.”
“Millions of Californians are living on the edge and urgently need help. It’s time to demand sacrifice from those most able to carry the burden for the greater good,” said Denise Solis, Northern California Vice President of SEIU-United Service Workers West. “People are suffering. They need leadership and it would be scandalous for lawmakers not to go to the mat for the communities they’ve promised to fight for – especially the communities of color who were left most exposed to the virus because of generations of racism. Another future is possible and it is worth fighting for.”
“California students, parents and educators are facing a school year like none we’ve seen before,” said E. Toby Boyd, President of the California Teachers Association. “Before the COVID-19 pandemic shut down our schools and colleges, California already ranked 39th in education funding. Now, with budget deferrals and a reduction in Prop. 98 revenues, schools are facing a $20 billion shortfall. We need additional revenue now to reopen and keep our schools safely open. Our most vulnerable students and communities pay the highest price when schools don’t have a stable, reliable funding source from year-to-year. The time is now for lawmakers to boldly adopt increased taxes on California’s wealthiest billionaires whose portfolios increased exponentially in value during this pandemic while our communities struggle to keep the lights on and put food on their families’ tables.”
AB 2088 would apply a 0.4% tax on the net worth of taxpayers holding at least $30 million in net assets, impacting approximately 30,400 people and generating $7.5 billion a year. The tax would apply to all assets and liabilities held by Californians globally, capturing the immense levels of accumulated wealth held by the top 0.1 percent. The formula does not include taxes to real property owned in California.
AB 1253 would impact approximately 70,0000 taxpayers and generate $6.5 billion by raising income taxes on households with incomes above $1 million per year in three tiers:
- income above $1 million, the tax rate would increase by 1% from 13.3% to 14.3%
- income above $2 million, the tax rate would increase by 3% from 13.3% to 16.3%
- income above $5 million, the tax rate would increase by 3.5% from 13.3% to 16.8%.
“While California needs to advocate for federal funds, our state also needs to raise our own revenues to prevent the cuts and make the investments in public health and health care that can ultimately control the coronavirus. We can’t cut our way out of COVID-19—we need to tax our state’s wealth in order to invest in our health,” said Anthony Wright, Executive Director of Health Access California, the statewide health care consumer advocacy coalition. “We shouldn’t be debating billions in cuts to core health coverage and services during a pandemic, especially as California’s multi-millionaire class gets more money. The most fortunate have a stake in the least fortunate, controlling the virus, and allowing California to fully restart education and our economy.”
“When an economic crisis happens in California, it’s always the programs and services that help people experiencing poverty and working families make ends meet that get cut first,” said Mike Herald, Director of Policy Advocacy at Western Center on Law & Poverty. “It took years to restore the cuts made in the last recession, and in some cases they have still not been restored. Now, just as these state programs have gotten back on their feet, they’re on the chopping block again. We can’t repeat the mistakes of the past when we asked those with the least to give while protecting those with the most.”
”The public health crisis and economic crisis we’re experiencing has worsened the inequity already rife throughout California. Californians are demanding a more equitable future, and they can’t afford to wait,” said Mary Creasman, CEO of the California League of Conservation Voters. “Our state leaders have a chance to do something big this year that will ensure we don’t have to make false choices between living-wage jobs, clean air and water, healthy food, quality healthcare and education, affordable housing, and investments in climate resiliency. We can, and must, move forward on all fronts. That’s why we’re calling on the California Legislature to pass budget solutions this year that don’t rely on borrowing or cutting essential programs – which only exacerbates inequality in our state – but instead, rely on taxing the most privileged and wealthy so they pay their fair share.”
“The latest economic crisis has underscored how important it is for California’s political leaders to recognize what so many everyday Californians already have: The super-rich got there in California thanks to past public investments. Now we have to make those public investments again to support our schools, our social safety net, public health and environmental health,” said Kathryn Phillips, Director of Sierra Club California. “AB 2088 is an opportunity for California’s super-rich to take a leading investor role in helping restore the California dream.”
“Communities of color continue to bear the brunt of the pandemic and its social, mental, and economic consequences,” said Kiran Savage-Sangwan, Executive Director of the California Pan-Ethnic Health Network. “The urgency and scope of our situation demands a response that is equally urgent and broad. In order to protect our most vulnerable, we demand that the ultra-wealthy contribute their fair share as they continue to profit. If not, communities of color will continue to face worsening health disparities and job losses. Together, we have a historic opportunity to create a more just and equitable future for generations to come.”
“California is home to the most billionaires in the nation and the highest poverty rate,” said Jane Kim, Senior Advisor for Build Affordable Faster California. “During COVID19, California’s billionaires grew $175B while 7 million Californians filed for unemployment– this is not a California for All, this is a policy failure. While we debate how many billionaires we will lose by modestly increasing taxes on the wealthiest amongst us, we will lose our teachers, nurses and janitors because we are not investing in affordable housing, eviction prevention, and our public schools.”
As the Legislature’s session winds down this month, multiple, mutually reinforcing crises have a firm grip on California.
- 14.9% are unemployed. The majority of jobs lost were in low-paying industries and employment for Black and Latino women fell over 20% – more than three times the decline in employment for white men.
- California faces an eviction tsunami as legal protections lapse on September 1 and 5 million renters face the prospect of eviction, which will be fueled by the loss of $600 in augmented monthly unemployment benefits under the federal CARES Act.
- Schools face a $20 billion shortfall and lack resources to reopen safely, fueling wider achievement gaps, since 1.2 million students lack tools for distance learning.
- With 4,000 childcare providers closing this year because of COVID, and 1,000 closing in July alone, this vital resource is harder to get and more parents are forced to choose between work and caring for their kids.
- A second wave of COVID-19 is taking hold and over 100 state-funded coronavirus testing sites across California face an unknown future after August.
- In the middle of a pandemic, hundreds of thousands of Californians are estimated to have lost health coverage along with their jobs and income, and yet cuts were made to health coverage, and an additional $1.2 billion in cuts are scheduled for Medi-Cal without additional revenue.
- $14 billion in “trigger cuts” are coming to our schools, affordable housing, and safety net services unless the federal government acts responsibly to support essential state and local frontline services by October 15th.
- Billions of additional cuts are coming next year, which will cause inequities to widen given the disparate racial impacts of budget cuts.