Why Are Gov. Brown and Sacramento Democrats Trying So Hard to Raise Taxes on the 99%?

My old friend Howard Dean shocked the political establishment when he opened his speech with these words at the California Democratic State Convention in 2003:

"What I want to know is what in the world so many Democrats are doing supporting the president's unilateral intervention in Iraq?"

In so doing, he called out a Democratic establishment that was steaming towards a reckless war in Iraq while ignoring reality, facts and common sense.

I must channel Howard in asking the same question about another situation taking place, funny enough, in California. What I want to know is why are Gov. Jerry Brown and the Sacramento Democratic establishment trying so hard to raise taxes on the 99%? It's bad policy and worse politics.

Here's the story: Gov. Jerry Brown is pushing a ballot initiative for November that raises sales taxes on 100 percent of Californians, as well as income taxes on those making over $250,000. The second half of that is OK with me, but there are so many messed up things about including a sales tax in this initiative, and the sales tax isn't the only thing wrong with it. The revenue from his initiative goes to the general state budget where they will spend it on refunding prisons or who knows what. What is really strange is that the tax increases expire in five years, meaning the whole thing will have to start all over again, which seems utterly insane to me: you have to be smoking some really good weed to think all of California's fiscal problems are going to be over in five years. And here's something else that makes me really suspicious: the people funding his ballot measure aren't people (unless you agree with the Supreme Court). They are corporations. Occidental Petroleum, Blue Shield, Kaiser, the California Hospital Association and various casinos, to name a few, have all ponied up big bucks to try and raise this sales tax on the 99%. Lastly, because of the complicated nature of this initiative, the fact that it sends the revenue to Sacramento (which people hate -- the state legislature there has a lower approval rating than Congress, if you can believe it) and the fact that it taxes everybody rather than just the 1%, this will be very tough to pass (polling shows that very clearly), and I believe it will turn into a drag on Democrats politically in November.

Gov. Brown and his allies in Sacramento are messed up fundamentally on their policy as well as their politics: sales taxes are the most regressive taxes there are. If you make $40,000 a year, most of your income outside of housing is spent in necessities that have a sales tax, and that sales tax takes a big percentage of your income. If you are poor, it's an even bigger take of the money you make. But if you are wealthy, the sales tax is something you don't even notice because it is such a small percentage of your income. That's what they call regressive, and that's why progressives who care about the 99% should oppose increasing the sales tax. Progressives know that tax revenue is needed to fund essential government services, but there is no reason to pass regressive tax increases when you can pass progressive measures that are based on the ability to pay.

The good news is that there is a politically viable alternative to Gov. Brown's ill-advised proposal. There is another ballot initiative, though, (the Millionaires Tax of 2012), sponsored by some of my favorite organizations: Courage Campaign, California Federation of Teachers, California Nurses Association and a variety of community organizations. They have written a clean, easy to sell initiative that is a straight up 1% vs. 99% play: Taxes go up 3 percent on every dollar California's millionaires make over $1 million, and 5 percent on every dollar over $2 million. The estimated $6 billion it would generate annually (it doesn't expire) goes to refund budget cuts to progressive priorities like education, public safety, and infrastructure. It is written in a way to unambiguously promote progressive policies, and the politics of it make complete sense in this 99er movement moment. Unsurprisingly, polling shows a whopping 70 percent of likely California voters in November would support it.

So what I want to know is why Gov. Brown is trying to raise taxes on the 100 percent of Californians, particularly the poor and middle class, instead of supporting a measure that raises taxes on the 0.4 percent who can actually afford it?

The dynamic here stinks pretty badly all around. Brown and corporate allies on this poorly thought through tax initiative are leaning heavily on the rest of the Democratic establishment and are getting them to play along. Democratic Assembly Speaker John Perez and Democratic Senate President Darrell Steinberg have decreed that no Democratic lawmaker in Sacramento shall endorse the Millionaires Tax of 2012, and have done the governor's bidding to muscle progressives into dropping their measure. But from a political standpoint, it's bad news -- legislators have to pick between their leadership trying to force a bad idea down their throats versus telling their constituents they want to raise sales taxes on the poor and middle class instead of just taxing millionaires? Like I said, terrible politics and terribly policy.

The question now is whether progressives will fight back, or simply roll over for the governor? I get the strong sense the fight back option is going to be the order of the day, thank goodness. In yet another similarity to the Dean situation, earlier this month, Gov. Brown went to the Democratic State Convention in San Diego. In his speech to delegates and activists, he said there was some sorting out to do on these tax measures, and then said the immortal words: "You'll get your marching orders soon enough." Unfortunately for Brown, progressives aren't waiting around for their marching orders. Those who are fighting for the millionaire tax kicked his butt in organizing at the convention -- from what I hear it was obvious that progressives won the day in terms of who had the most delegate support, and key progressive leaders like Van Jones took Brown on directly by backing the Millionaires Tax.

Brown is trying to impose an unwritten rule in California of late: No one criticizes or even pressures the governor. To hell with that. Progressives have a moral and political duty to take on the Democratic establishment when they are doing the wrong thing on policy, the stupid thing on politics, or -- as in this case -- both. The governor says if competing measures are on the ballot, they will all fail. History doesn't always match up with that, but I do know this: if there are competing measures, the governor should be the one to drop his regressive, corporate-funded, Sacramento-funding, 99%-taxing, movement-killing, inside-the-Beltway measure. Just as Democrats in 2003 ignored reality, facts and common sense, Gov. Brown and Sacramento Democrats are doing so here. In the meantime, the folks behind the Millionaires Tax of 2012 are collecting signatures to put their measure on the ballot, and the progressive movement should come together and close ranks in support of their efforts. I hope California progressives will stand their ground against Gov. Brown, and refuse to take their marching orders from him when he is pushing something this fundamentally wrong.