Economy – Key Themes

• Voting rules need to change in Sacramento
• Legislators are prisoners of their own failed policies
• Reforming Proposition 13  – keeping the good and fixing the bad  – is the key to restoring revenues that will enable us to restore California’s greatness
• Implement solutions both tried-and-true and innovative: State Bank for California

Background

California’s economy is in serious trouble, and the bi-partisan quagmire in Sacramento has proved that the old solutions don’t work any more. California needs new rules so Sacramento can pass a budget that taxes people and businesses fairly, and provides services we need. Sacramento cannot pass a fair budget using its current rules and practices.

The current tax system helps, actually coddles, the richest of the rich individuals and corporations. The rest of us – the 80% with less wealth altogether than the top 1% – have to pay more and more in fees and taxes  (look at sales taxes, social security taxes, college tuition, and parking fees), but we get less and less back (look at schools, healthcare, parks, and pot holes). There are many reasons why the budgeting system has been set up to work this way.  

Wealthy interests block fair budgeting

Sacramento cannot pass a fair budget because a Super-Majority of votes is required to raise the taxes needed to run the state. To kill any decent budget, all it takes is 34 out of a 100 legislators to cross their arms over their chests and refuse to budge. The reason a small minority has that much power in the legislature is that a 50% Simple Majority can lower taxes, but it takes a 66.7% Super-Majority to raise taxes.

Bonds aren’t the answer

Although bonds can be seen as a way of avoiding new taxes, bond debt is just another form of buying on credit and having our future generations pay it back. In boom years, the legislators lowered taxes, benefiting the super rich the most. In lean years, they could not undo those tax cuts. Instead they’ve been undoing California’s commonwealth, with severe cuts in education and health services, street maintenance and transit, libraries and parks.

Timid Legislators won’t confront a failed policy

There is something that’s called a “Taxpayer Protection Pledge.” Candidates are sent a form and asked to sign a “pledge to all the people of this state that they will oppose and vote against any and all efforts to increase taxes.” And those that sign in order to get elected are reminded to toe the line. They remember that the first George Bush (“Read my lips; no new taxes”) went back on his pledge, just a little, and he became a one-term president. Rather than risk losing their jobs by establishing fair taxation, too many legislators choose to sacrifice the public wellbeing, to keep low taxes for the benefit of only the very wealthy.

Lowering taxes isn’t always the best solution

The way taxes are lowered now helps you only if you are already super rich. When you look at all the taxes and fees that a person pays to city, local, and state governments, the lowest 20% of income earners pay 12 cents of every single dollar in taxes. The top 5% pay only 7 cents of their dollars, and they have a whole lot more dollars to work with. This grows the inequality, shrinks the middle class, and closes the doors of opportunity that California was known for.

The breakdown has been gradual

The breakdown of California’s strong economy has taken about 30 years of status-quo politicians playing on people’s natural hopes and fears. We have been surrounded by a constant bombardment of organized propaganda and disinformation that has kept us from understanding the gravity of the growing breakdowns.

• Powerful and expensive political ads in the “free press” (we know ads are very expensive not “free”)
• Fear-inspiring ads about individual (vs. corporate) crime
• Powerful and expensive regular ads, with hidden agendas. Look at the ads for non-nutritious children’s food, for expensive drugs (pharmaceuticals), for too-good-to-be-true financial products
• A constant stream of favorable news stories and urban legends that distract from real issues
• Talk show half-truths that are never confronted or corrected. Look at the political coverage that sounds less like deep, informative analysis of policies that affects our lives, and more like movie reviews about personalities, or sporting events about the odds of winning
• Subsidies to the super rich that are blatantly visible, like the bailouts
• “Weapons of Mass Distraction”: Fear-mongering about “They’re trying to change Prop 13!” without information on the destructive parts
• Scapegoat distractions, focusing on issues that are important, but are not the main problem. Look at the focus on politicians’ wages and benefits, undocumented immigrants, youth gangs, welfare recipients
• False causes appearing real. Look at “excessive government spending” being named as the problem, rather than “unfair government taxing” that favors the wealthiest.

Other defects in the system are less visible:

• Audits not happening to the biggest tax evaders
• Super corporations keeping two accounting books legally: one showing low profit for tax, and the other showing high profit, for shareholders
• Campaign donor payback contracts -- behind-the-scenes subsidies to super rich corporations

What We Propose

We now have a run-away system that CAN be fixed if new values and leadership are brought to Sacramento. What cannot be done with status quo politics is that Sacramento cannot create a budget that will keep California great.

Those of us in the middle class may feel that we have been carrying a heavy load of taxes that benefit other folks who haven't been pulling their own weight. This is true; but those who are not pulling their own weight are not those who worse off - it's those who are vastly better off who are being subsidized by lower income, middle class, and even the relatively affluent. We've had deep cuts in the taxes that the super-rich must pay, and deep cuts in services provided to regular neighborhoods and the least fortunate of our state.

There is a lot to learn about how we can get back on track. When California voters really understand what’s going on, we will fix it. Why support candidates whose tired ideas simply don't work? It's time for California to vote for Green systems Green priorities, and Green budgets.

One solution that is both tried-and-true and innovative is to establish a state bank for California, so loans can be made to students and local community businesses at a fair interest rate, and so that the interest stays in California for further investment in the state.

Our Priorities

• Fix Prop 13. Keep the good, and fix the bad. Fixing Prop 13 is going to come through people who are not fooled by the big money that keeps people believing all of Prop 13 is lucky for all of us. Some parts are lucky - keep them. Other parts are very unlucky – change them. The 2/3 majority required to increase taxes has proved to be a safeguard only for the richest of the rich.

• Take responsibility in your personal life step by step, and become politically active. Talk to people. Remember to tell people that you pay 7 cents tax if you’re super rich, 12 cents if you’re not. Specifically, the lowest 20% of income earners pay 12 cents of every single dollar in local and state taxes. The top 5% pay only 7 cents of their dollars. And they have a lot more dollars. If we taxed fairly, we would have the revenue we need.

• When people say: “We should fix the budget by cutting the salaries and benefits of the city council, and the state legislators.”
• Respond: “That will not fix the problem. The super rich individuals and corporations are not paying their fair share into our revenues. Prop 13 makes it so a minority of representatives of the super-rich can call the shots. That’s what’s been hurting our wealthy state.”

• When people say: “Unions or immigrants or welfare recipients are the main cause of economic problems.”
• Respond: “Enron stole billions of dollars from California.”
• Respond: “Bailouts. Huge corporations got over $700 billion in our money, and after they paid themselves bonuses, the big banks bought out local banks.”
• Respond: “Health Insurance and Pharmaceutical Industries. Expensive failures when we compare the results to any other industrialized country. And who wants healthcare reform that would force us to buy these inferior insurance products, and punish us if we don't?”

• When people say: “Prop 13 has been a life saver.”
• Respond: “In some ways, yes, since homeowners, especially seniors, no longer lose their homes because of sky-high property tax increases.” But, two-thirds of the benefit of Prop 13 went to industry, business, and landlords. And a one-third minority of legislators, aligned with the richest of the rich, can vote all benefits and no taxes to their little areas of the state.

We should remember that the Golden Gate Bridge was built in the middle of the Great Depression. As we face the current logjams and failures in Sacramento, we should not settle for anything less visionary for our future, anything less practical, or anything less commanding of world respect than the Golden Gate has been.

There are over 36 million of us who inhabit the length and breadth of this great state, and with proper leadership we should be aspiring to our own Golden Gate challenges, not resigning ourselves to the bi-partisan gloom and poverty of imagination that emanates from Sacramento. There are too many brilliant and talented people among us, too many energetic, entrepreneurial leaders, too many caring and creative citizens among us to settle passively for this sorry state of affairs.

If we start by reforming the obvious defects of Proposition 13, we can begin to rebuild our state for ourselves, our families, and our communities.