Talking Taxes: fixing our futureTalking Taxes: fixing our future
California Federation of Teachers, AFT/AFL-CIO
California Federation of Teachers, AFT/AFL-CIO
The ProblemThe Problem
California has an ongoing budget crisis. Public education and other vital social services have been cut by many billions of dollars, totaling 20%, over the past two years.
California has an ongoing budget crisis. Public education and other vital social services have been cut by many billions of dollars, totaling 20%, over the past two years.
Point One Point One These cuts are devastating public
education, public safety, and public health.
These cuts are devastating public education, public safety, and public health.
Point TwoPoint Two
California already underfunds education and other services.
California already underfunds education and other services.
Point ThreePoint Three
Another way: tax fairness to preserve and improve education and other services.
Another way: tax fairness to preserve and improve education and other services.
Is it true?Is it true?
Actually, California has a revenue problem. Actually, California has a revenue problem.
“California has a spending problem.”
Overspend vs. underfund?Overspend vs. underfund?
47th in the nation in K-12 per student spending, and sinking
45th in the nation in community college per student spending
48th in the nation in government employees per resident
47th in the nation in K-12 per student spending, and sinking
45th in the nation in community college per student spending
48th in the nation in government employees per resident
How are cuts affecting students?How are cuts affecting students?
In K-12: Larger class sizes Fewer resources in the classroom No full time library clerks, few nurses Fewer classified staff, reduced busing No elementary music or art Pay to play sports programs
In K-12: Larger class sizes Fewer resources in the classroom No full time library clerks, few nurses Fewer classified staff, reduced busing No elementary music or art Pay to play sports programs
How are cuts affecting students?How are cuts affecting students?
In higher education: Increased tuition and fees Layoffs of faculty and staff Fewer classes and support services Longer time to graduate Failure to adequately serve adult
students during a recession
In higher education: Increased tuition and fees Layoffs of faculty and staff Fewer classes and support services Longer time to graduate Failure to adequately serve adult
students during a recession
Obstacles to adequate fundingObstacles to adequate funding
lower tax rates for the wealthy, corporations
State budget process State tax rules
lower tax rates for the wealthy, corporations
State budget process State tax rules
Obstacle 1: lower tax rates for wealthy and corporations
Obstacle 1: lower tax rates for wealthy and corporations
15 years ago: those who made at least $250,000/year paid 10%, and those who made $500,000/year paid 11%
Today: both pay 9.3% The difference: 2.5 to 6 billion
dollars less per year for education and other services
15 years ago: those who made at least $250,000/year paid 10%, and those who made $500,000/year paid 11%
Today: both pay 9.3% The difference: 2.5 to 6 billion
dollars less per year for education and other services
Growing gap between wealthy and the rest of us
Growing gap between wealthy and the rest of us
• Richest 1% of population owns more than a third of the country’s wealth; worst wealth distribution since before the Great Depression
• Richest 1% averages 1.6 million dollars per year in income
• Richest 1% of population owns more than a third of the country’s wealth; worst wealth distribution since before the Great Depression
• Richest 1% averages 1.6 million dollars per year in income
U.S. Wealth Distribution, 2007U.S. Wealth Distribution, 2007
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Public attitudesPublic attitudes
Most likely state voters would choose to add fair taxes on the wealthy in order to maintain school funding [PPIC poll, 4/30/08]
Most likely state voters would choose to add fair taxes on the wealthy in order to maintain school funding [PPIC poll, 4/30/08]
Corporate loopholesCorporate loopholes
Corporate loopholes allow big companies to avoid paying fair share of taxes
One example: the oil severance tax
Corporate loopholes allow big companies to avoid paying fair share of taxes
One example: the oil severance tax
Corporate loopholesCorporate loopholes
Obstacle 2: state budget process
is undemocratic and broken
Obstacle 2: state budget process
is undemocratic and broken Instead of simple majority, state legislature
must vote by a two-thirds margin to pass budget
California is one of three states to require a 2/3 margin to pass budget
This allows for a “tyranny of the minority” to thwart the will of the majority
Instead of simple majority, state legislature must vote by a two-thirds margin to pass budget
California is one of three states to require a 2/3 margin to pass budget
This allows for a “tyranny of the minority” to thwart the will of the majority
Obstacle 3: rules for raising state taxes are undemocratic Obstacle 3: rules for raising state taxes are undemocratic
The state Legislature needs a two-thirds margin to pass any new tax, instead of a simple majority
California is the only state in the country to require supermajority margins to pass a budget and a tax
It only takes a simple majority to reduce or eliminate an already existing tax
The state Legislature needs a two-thirds margin to pass any new tax, instead of a simple majority
California is the only state in the country to require supermajority margins to pass a budget and a tax
It only takes a simple majority to reduce or eliminate an already existing tax
“No New Taxes”?“No New Taxes”?
“My goal is to cut government in half in 25 years, to get it down to the size where we can drown it in a bathtub.” —Grover Norquist
“My goal is to cut government in half in 25 years, to get it down to the size where we can drown it in a bathtub.” —Grover Norquist
“No New Taxes”?“No New Taxes”?
“Taxes are the price
we pay for living in
a civilized society.”—Oliver Wendell Holmes
“Taxes are the price
we pay for living in
a civilized society.”—Oliver Wendell Holmes
Some fair tax ideasSome fair tax ideas
Return the top income tax brackets to 11% Re-assess non-residential real property Enact severance tax on oil produced in
California Enact modest taxes on stock transactions Reinstate the full vehicle license fee Repeal corporate tax loopholes put in
place during last dozen years’ budget deals
Return the top income tax brackets to 11% Re-assess non-residential real property Enact severance tax on oil produced in
California Enact modest taxes on stock transactions Reinstate the full vehicle license fee Repeal corporate tax loopholes put in
place during last dozen years’ budget deals
What can you do to help?What can you do to help? Share information with co-workers,
family, friends, and neighbors Attend public board meetings, ask
boards to pass resolutions and lobby to change state budget process and tax structure, and fully fund public education and other services
Demonstrate Write to your legislators – take a
brochure
Share information with co-workers, family, friends, and neighbors
Attend public board meetings, ask boards to pass resolutions and lobby to change state budget process and tax structure, and fully fund public education and other services
Demonstrate Write to your legislators – take a
brochure
For more information:For more information: www.cft.org
California Federation of Teachers
www.cbp.org
California Budget Project
www.caltaxreform.org
California Tax Reform Association
www.cft.org
California Federation of Teachers
www.cbp.org
California Budget Project
www.caltaxreform.org
California Tax Reform Association
What do we say?What do we say?
“Close loopholes, not schools!!”
“Close loopholes, not schools!!”