Millionaires Tax Supporters Grapple with Withdrawal of Major Backers

Millionaires Tax Supporters Grapple with Withdrawal of Major Backers

by Jonathan Nack
March 27, 2012

OAKLAND, CA – Supporters of a ballot proposition that would bring a Millionaires Tax to California are grappling with the withdrawal of crucial support by major backers that have made a deal with Governor Jerry Brown (D).

Under an agreement reached with Gov. Brown, the California Federation of Teachers (CFT), and other groups in the Restoring California Coalition, will withdraw their support for the Millionaires Tax. Instead, they will join with the Governor in supporting a compromise tax proposition.

Despite a recent poll which showed the Millionaires Tax outperforming a tax proposal by Gov. Brown, [ http://www.sfgate.com/cgi-bin/article.cgi?file=/c/a/2012/03/11/BAAV1NIOMH.DTL ] the compromise is a modification of the Governor's proposal, not the other way around. It does raise the amount of income tax increases on upper income groups, while halving the sales tax increase, from what the Governor had in his initial ballot proposition.

Occupy Education California, which has been actively supporting the Millionaire's Tax campaign, held a press conference on March 20, to publicize it's rejection of the compromise reached by the other groups, and its decision to press forward with Millionaire Tax signature gathering.

In a press release, dated March 17, 2012, Occupy Education California declared, “[t]he Millionaires Tax remains the only proposal that would take steps to permanently fund public education and services — and it would do this without regressive sales taxes. We reject the notion of “shared sacrifice” — we have already sacrificed more than our share. The 99% should not be asked to pay for the crisis caused by the 1%. “ [ http://occupyeducationca.org/wordpress/?p=704 ]

At the press conference, held in front of the State Building in downtown Oakland, a range of reactions were represented.

Among the speakers, student activists spoke out the most passionately against the compromise reached with the Governor. “It's disgusting that the working class is being asked to pay more when we don't have any more to give. I know I don't. I know my mom doesn't – she works two jobs,” said Ivonne, of Occupy San Francisco State University, in criticism of the sales tax increase included in the compromise.

“We need to continue to back this initiative [the Millionaires Tax]. We need to continue to fight for it. We need to continue to fight for the working class. We need to continue to fight for education,” concluded Ivonne.

“This compromise with the Democrats is another betrayal,” said Honest Chung, an undergrad at U. C. Berkeley. “Within the past ten years, U. C. tuition has risen 300 percent. This policy has been pushed by Republicans and Democrats. This pattern makes one thing clear. Neither Republicans nor Democrats are our friends, nor allies, for public education and public services,” said Chung. He emphasized the need for more protests by students, as well as a greater level of student organization.

Dr. Henry Clarke, of the West County Toxics Coalition, said, “when I heard about this so-called compromise, I immediately got ready to come here today.” Clarke recounted how the City Council of Richmond, where he lives, recently voted to support for the Millionaires Tax, and that excitement about it was building.

“We need to tax the rich and corporations and we need to rip this whole system out of the hands of the rich and put it in the hands of the people,” said Clarke.

While all of the speakers at the March 20 press conference were critical of the compromise, a number of speakers emphasized that they don't blame the CFT and the other groups for having reached it.

“I'm proud of the CFT and the stand it took, and of my union leadership for the courage they showed in taking this stand, and being the last one standing on the Millionaires Tax,” said Peter Brown, who teaches at Laney Community College and is a member of the Peralta Federation of Teachers, and affiliate of the CFT. “While I will be very disappointed and angry if this is dropped, nothing can take away my feelings about my union and my leadership,” said Brown.

“The Millionaire Tax's great sin is that it puts class, wealth and privilege up for discussion...That is why there is such pressure to get this little initiative off the ballot and out of our heads,” concluded Brown.

“The CFT was beaten into submission - don't blame the CFT, and don't blame the organizations that stayed with it, including the UAW and ILWU, and a bunch of others, that were at least supporting it,“ said Steve Gilbert, a retired BART mechanic, who said he'd been working fifty hours a week for the past year and a half pursuing an initiative to tax the rich, which became the Millionaires Tax.

Gilbert recounted how Governor Brown put tremendous pressure on unions to support his measure over the Millionaires Tax. How Brown first succeeded in winning the Service Employees International Union (SEIU) and the California Teachers Association (CTA) over to support his proposal, and how those two unions, which are the two largest unions of state employees, “took a position against the interests of not only their own membership, but of the working people in California.”

“CNA [the California Nurses Association] endorsed us, and then as soon as the Governor called them up, they said they wouldn't fund it,” said Gilbert.

Gilbert did criticize the CFT and it's allies, because “the idea of building a grassroots movement was not a central theme...In labor circles there isn't much confidence that they can build a grassroots movement...” explained Gilbert.

In assessing the Millionaires Tax campaign, Gilbert said, “Brown had to make some concessions... Is that enough? Does that solve our problems? Not really, because, what was at the heart and soul of the Millionaires Tax was an opportunity for us to organize a grassroots movement and to have a real fight.

Could we have pushed forward with this? Yes, with funding we could have – we didn't have the funding. As a volunteer effort we were able to do significant work and make progress, but not enough,” concluded Gilbert.

Virtually no one familiar with California's initiative process thinks the Millionaires Tax can still make it on to the ballot unless new sources of funding to pay for signature gathering emerge quickly. It has an estimated 300,000 of the 800,000 signatures needed to qualify on the ballot, and the great majority of those signatures were acquired by paid signature gatherers. Nevertheless, some supporters, like Occupy Education, refuse to give up.

Alan Benjamin, from the Office and Professional Employees Local 3, a delegate to the S. F. Labor Council AFL-CIO, said, “here we had an opportunity to build a fighting coalition that said we don't have to go along with the deals made by politicians and the union leaders who bend to them. We gave hope to so many young people. I'm ashamed, because our unions threw in the towel step by step, under pressure from the Governor.” Benjamin joined in defending the CFT for its role in initiating the Millionaires Tax, focusing his criticism on the rest of the labor movement that failed to unite in support of it.

Bill Balderston, of the Oakland Education Association, in analyzing the compromise said, “the question is business as usual or a totally different vision of what we want for this state, this county, and this world. What this compromise is about is linking the effort to increase revenues to this Governor's austerity budget and linking it to a neo-liberal program.” Balderston pointed out that the compromise that both of the state's teachers unions are now committed to, includes huge budget cuts to education, particularly higher education.

A press release issued by the CFT lauded the compromise as resulting in, “...a new unified progressive tax initiative.” [ http://www.cft.org/cft-stories/824-cft-restoring-california-coalition-join-with-governor-in-unified-ballot-measure.html ]

“The values and principles of fair, progressive tax policy are clearly reflected in this joint initiative.  The new measure will bring in more money for schools and services, and a greater contribution from the wealthiest Californians.  It boosts the proposal for the top income tax to a 3% contribution from taxpayers making more than a million dollars.  It reduces the governor’s proposed half-cent sales tax to a quarter cent, and thus reduces the burden on working families,” according to Joshua Pechthalt, President of the CFT and Co-Chair of the Millionaire Tax campaign.

The compromise the CFT and the other groups reached with Gov. Brown has sparked debate on the left and in the alternative press. Paul Hogarth, Managing Editor of the web site Beyond Chron wrote of the compromise, “While less progressive than the Millionaires Tax, it is a vast improvement over what the Governor had proposed and will raise more revenue for the state.”

Hogarth laments that, “[g]iven how popular the Millionaires Tax was polling, and given the broad coalition supporting it from the Courage Campaign, the California Federation of Teachers, the California Nurses Association and ACCE, it is incredible that Democratic leaders, rather than get behind and support the measure, spent months urging their progressive base to drop it. But sadly, this was nothing new.”

Hogarth concludes that, “[a]t the end of the day, “the compromise was something progressive backers of the Millionaires Tax can be proud of. Jerry Brown's initial measure would have put 40% of the tax burden on a sales tax increase. This new compromise puts 85% of the new tax burden on incomes making over $250,000 and $500,000. Consider that California's income tax code currently makes no difference between anyone making $50,000 and $900,000 a year; and you start to understand why this compromise is both good policy, and very good politics to bring our forces together.” [ http://quartz.he.net/~beyondch/news/nucleus/plugins/print/print.php?itemid=9983 ]

An article published by Counterpunch by Ann Robertson and Bill Leumer takes a critical view of the compromise. Robertson and Leumer write that, “many supporters of the Millionaires Tax are not simply focused on the money to save their own position; they are intent on creating a movement. And people will hardly want to join a movement led by teachers who pursue raising money for schools with a sales tax that includes in its scope taking money from the poorest people in the state. Teachers do not inspire when they support self-serving proposals that divide rather than unite working people. Moreover, the argument that the “compromise” proposal is progressive since it takes more from the rich than the poor fails to take into consideration the surrounding context where inequalities in wealth have been soaring. Although the measure might take a higher percentage from the rich than the poor, the rich have so much money to spare they won’t feel the bite. The poor already don’t have enough money, and this will leave them with even less.” [ http://www.counterpunch.org/2012/03/21/the-unions-the-millionaires-tax-and-the-road-to-success/ ]

Whether or not the compromise made by the CFT, and the other groups, with the Governor is viewed as worth it, there is no doubt that it means that the Millionaires Tax is now a real long shot to qualify for the California ballot this November.