In 2012, those of us who opposed Proposition 30 were told that the measure, which was the largest state tax hike in American history, was just a “temporary” fix to address the emergency of a severe budget shortfall. But just as Milton Friedman noted that “nothing is so permanent as a temporary government measure,” here in California it appears that nothing is so permanent as a temporary tax increase.
However, in their journey to extend the Prop 30 tax hikes, the tax raisers started tripping over their own greed. Even the public sector union bosses weren’t reading off the same page and different proposals began to emerge, each targeting billions of dollars of tax revenue to their respective constituencies. And compounding the problem was the fact that the “emergency,” which was the entire justification for Prop 30 in the first place, disappeared. California now has a budget surplus.
But greed being a powerful motivator, the special interests worked out a compromise that focused on extending only the income tax portion of Prop 30 and jettisoning the sales tax. This move was politically expedient given that only the income tax portion targeted “evil” rich people while the sales tax extension would have been an almost impossible sell. (If the version of the Prop 30 extension currently gathering signature passes, California’s highest in the nation tax rate of 13.3% would be extended until 2030).
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