November 1, 2017, will be an important day for San Diegans concerned about what the future of California looks like.
Republicans in Washington DC are scheduled to release the paperwork outlining the #TrumpTaxScam on November 1st. Congressman Paul Ryan told a press conference on Tuesday the House is on track to get a “tax overhaul bill” to the Senate before Thanksgiving.
On November 1st there will be a town hall at San Diego City College about closing a major tax loophole in California that could lessen the impact of the #TrumpTaxScam. The ‘Make It Fair’ forum will discuss a proposal to revise Proposition 13, which currently allows corporations to claim the same property tax protections as the homeowners the measure was intended to protect.
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Republicans and their billionaire backers have been working hard for more than a generation to stack the economic and political deck in their favor. With or without Donald Trump in the White House, they are poised to create a massive transfer of wealth upward under the guise of “tax reform.”
Dr. Martin Luther King, Jr is widely considered to have coined the saying “Budgets are moral documents.” If you apply that standard to the ideas being considered for the President’s concept of tax reform and the priorities of this administration, there should be no doubt of the vile intentions of the Republican Party.
Predictions of the $1.5-trillion shortfall in the Senate’s framework for a budget being covered by spurring economic growth and leading to future tax revenues are simply wrong.
The Trump administration has cooked up a public relations scheme promising the average US household will receive an estimated $4,000 more a year after corporate tax rates are slashed.
This magic number was created via RepubliMath™, which takes the projected tax savings of all income groups and divides it the number of said groups.
So that $4000 number includes the $1.4 million in savings given to the top tenth of the top one percent of filers. You’ll have to be at or near the top 10% of income earners to see a four grand bump.
Passage of the GOP’s budget blueprint last week was really about creating special instructions allowing for approval of a tax plan by a simple majority, without the threat of a Senate filibuster to block it.
“What the entire GOP proposal is about is giving tax breaks to people who don’t need it by making cuts to education, housing, and healthcare,” tweeted the Budget Committee’s ranking member, Sen. Bernie Sanders.
The rich, in case you haven’t noticed, are getting richer, as Ray Dalio, Chairman and Chief Investment Officer at one of America’s largest hedge fund pointed out recently. The top 40% of Americans now have on average 10 times as much wealth as those in the bottom 60%, up from 6 times as much in 1980.
The tax policies in place since the days of Ronald Reagan are, as Matthew Yglesias points out at Vox, a prime driver of this wealth concentration:
…though inequality is surely shaped by big forces like digital technology and globalization, it appears to be more profoundly shaped by tax policy.
Lower taxes on the rich straightforwardly engender inequality by giving rich people more money. But they also shift incentives. In the old days of 70 or even 90 percent marginal tax rates, it wouldn’t make much sense for executives to expend enormous amounts of time and energy trying to maximize the amount of money they can personally extract from a company in the form of salary. Instead, you might chase social prestige or other goals. And last but by no means least, tax cuts on investment income increase the extent to which wealth can mechanically beget more wealth as financial assets inherited from or gifted by parents simply earn their natural rate of return over time.
Instead of a rising tide lifting all boats, most families are left high and dry as the wealthy suck up a larger and larger share of an overall pool of money that isn’t growing very rapidly.
The long-term implications are even worse. The nonpartisan Tax Policy Center’s preliminary analysis estimated that the proposal would cut business taxes by $2.65 trillion over a decade while increasing the tax burden on families and individuals by $471 billion.
At this point. it would appear not many people are buying what the Republicans are selling. A just-released Reuters/Ipsos poll indicates less than 1 in 3 Americans aware of the tax scheme thought it was a good idea.
From Reuters:
More than half of the adults surveyed in the poll agreed that “cutting taxes for the poor is more important than reducing the federal deficit,” with 68 percent of Democrats and 47 percent of Republicans in accord with that statement, the poll showed.
The Oct. 20-23 poll found that only 15 percent of registered voters said Republicans in Congress should prioritize tax reform over other issues. About a quarter of those polled, including 23 percent of Democrats and 30 percent of Republicans, agreed that Congress should continue working on a healthcare bill.
Of those adults who said they had heard of the “tax reform plan recently proposed by congressional Republicans,” just 28 percent said they support it, while 41 percent said they oppose it and another 31 percent said they do not know.
Maybe people aren’t buying into the idea of lower taxes equalling economic growth because they’ve heard just how bad things went in Kansas.
Public disapproval won’t stop the Republicans from doing anything more than telling bigger lies to sell their tax & budget plan. And lest we forget, corporate America is just wild about the idea.
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Californians will be disproportionately impacted, according to the California Budget and Policy Center:
In terms of budget cuts, the significant cuts to Medicaid and SNAP (Medi-Cal and CalFresh in California) would likely result in reduced or eliminated benefits for millions of Californians with low incomes — over 13 million(34.2 percent) who are enrolled in Medi-Cal and over 4 million (10.8 percent) who receive food assistance through CalFresh.
These cuts would also likely undermine California’s fiscal health, forcing state leaders to choose between destabilizing the state budget by trying to fill fiscal holes as a result of federal tax and budget cuts or, on the other hand, destabilizing vulnerable individuals and communities across the state by reducing benefits.
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The movement to close the corporate loophole embedded in California’s property tax system predates Donald Trump, but it’s obviously more critical than ever before. With or without #TrumpsTaxScam, we need to address the mechanisms being used to gut the social safety net.
MakeItFairCA has been holding town halls and forums around the state over the past few months, setting the groundwork for a Constitutional Amendment reforming Proposition 13.
Here’s their summary of what reform would look like:
- Make It Fair is a constitutional amendment to reform commercial property taxes, while guaranteeing existing protections for residential property and agricultural land.
- Make It Fair will close the millionaire, billionaire, and big corporation tax loophole by requiring all commercial and industrial properties to be assessed at fair market value, putting California on par with how the vast majority of the country assesses these properties. California’s commercial property taxes will still be among the lowest in the country because of Proposition 13’s limits on property tax rates, which Make It Fair does not change.
- Make It Fair will restore over $9 billion a year for services that all Californians rely on. Roughly half of the new revenues, $3.6 billion, will support schools and community colleges. The remainder will be shared by counties, cities and special districts to support community services, including health clinics, trauma care and emergency rooms, parks, libraries and public safety.
- Make It Fair mandates full transparency and accountability for all revenue restored to California from closing the commercial property tax loophole.
- Make It Fair also benefits small businesses in three ways: it exempts owner-operated small businesses from reassessment until they are sold, it levels the playing field so small businesses can compete more fairly with big corporations, and it reduces their taxes by eliminating the property tax on fixtures and equipment (the business personal property tax) for all small businesses.
- Make It Fair is a common-sense reform – it puts California on par with how the vast majority of states treat commercial property by assessing them at fair market value. Make It Fair only affects undervalued commercial properties, creating a level playing field for those businesses that already pay their fair share. And California’s commercial property taxes will still be among the lowest in the country because of Proposition 13’s cap on tax rates, which Make It Fair does not change.
Hundreds of community groups, school districts, churches, social justice organizations, and prominent individuals have signed on to support this effort.
Renowned labor and immigrant rights activist Dolores Huerta is one of many high profile supporters:
Credit: Felix Adamo
We’ve all heard a lot of fear mongering about this issue over the past 40 years, from corporations and out-of state investors who don’t have our communities best interests at heart. What they will not tell you is this simple truth: all homeowners including seniors, residential renters and farmers will continue to receive existing Prop 13 protections. So, too, will small businesses that will benefit from a level playing field. This is only about changing the commercial property tax loophole.
The only ones who have anything to worry about are the millionaires, billionaires and big corporations currently profiting $9 billion a year from this loophole.
From serving as an example in the fight against climate change, to leading the way on women’s empowerment, to having the most humane immigration policy in the nation, California knows what it takes to be a leader. It is time we become leaders against selfish corporations, who, like our president, get wealthier at the expense of hardworking Americans.
The list of endorsees, by the way, does not include the San Diego City Council or the County Board of Supervisors.
San Diego Make It Fair Town Hall
Sponsors of the Wednesday, November 1st event, to be held at the SD City College Math Center, starting at 6pm, include:
- Alliance San Diego (ASD)
- League of Women Voters San Diego (LWV SD)
- Pillars of the Community, Partnership for the Advancement of New Americans (PANA), San Diego Education Association (SDEA)
- American Federation of Teachers (AFT)
- California Calls
- California Teacher’s Association (CTA)
- California Federation of Teachers (CFT)
- PICO California
- Service Employees International Union
Speakers will include:
- Ismahan Abdullahi, Director of Community Partnerships and Civic Engagement at Partnership for the Advancement of New Americans (PANA)
- Kisha Borden, Vice President of San Diego Education Association
- Richard Barrera, San Diego School Board Member
- Andrea Guerrero, Executive Director of Alliance San Diego (ASD)
- Isaac Martin, UC San Diego Professor
- Kelly Mayhew, San Diego City College Professor
- Jim Miller, San Diego City College Professor
For more information, and to RSVP, check out the event page for the San Diego Make It Fair Town Hall.
Looking for some action? Check out the Weekly Progressive Calendar, published every Friday in this space, featuring Demonstrations, Rallies, Teach-ins, Meet Ups and other opportunities to get your activism on.
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Doug Porter
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They are also trying to take away deductions for home interest, state tax deduction etc. especially punishing CA