Talking Taxes: fixing our futureTalking Taxes: fixing our future

California Federation of Teachers, AFT/AFL-CIO

California Federation of Teachers, AFT/AFL-CIO

The ProblemThe Problem

California has an ongoing budget crisis. Public education and other vital social services have been cut by many billions of dollars, totaling 20%, over the past two years.

California has an ongoing budget crisis. Public education and other vital social services have been cut by many billions of dollars, totaling 20%, over the past two years.

Point One Point One These cuts are devastating public

education, public safety, and public health.

These cuts are devastating public education, public safety, and public health.

Point TwoPoint Two

California already underfunds education and other services.

California already underfunds education and other services.

Point ThreePoint Three

Another way: tax fairness to preserve and improve education and other services.

Another way: tax fairness to preserve and improve education and other services.

Is it true?Is it true?

Actually, California has a revenue problem. Actually, California has a revenue problem.

“California has a spending problem.”

Overspend vs. underfund?Overspend vs. underfund?

47th in the nation in K-12 per student spending, and sinking

45th in the nation in community college per student spending

48th in the nation in government employees per resident

47th in the nation in K-12 per student spending, and sinking

45th in the nation in community college per student spending

48th in the nation in government employees per resident

How are cuts affecting students?How are cuts affecting students?

In K-12: Larger class sizes Fewer resources in the classroom No full time library clerks, few nurses Fewer classified staff, reduced busing No elementary music or art Pay to play sports programs

In K-12: Larger class sizes Fewer resources in the classroom No full time library clerks, few nurses Fewer classified staff, reduced busing No elementary music or art Pay to play sports programs

How are cuts affecting students?How are cuts affecting students?

In higher education: Increased tuition and fees Layoffs of faculty and staff Fewer classes and support services Longer time to graduate Failure to adequately serve adult

students during a recession

In higher education: Increased tuition and fees Layoffs of faculty and staff Fewer classes and support services Longer time to graduate Failure to adequately serve adult

students during a recession

Obstacles to adequate fundingObstacles to adequate funding

lower tax rates for the wealthy, corporations

State budget process State tax rules

lower tax rates for the wealthy, corporations

State budget process State tax rules

Obstacle 1: lower tax rates for wealthy and corporations

Obstacle 1: lower tax rates for wealthy and corporations

15 years ago: those who made at least $250,000/year paid 10%, and those who made $500,000/year paid 11%

Today: both pay 9.3% The difference: 2.5 to 6 billion

dollars less per year for education and other services

15 years ago: those who made at least $250,000/year paid 10%, and those who made $500,000/year paid 11%

Today: both pay 9.3% The difference: 2.5 to 6 billion

dollars less per year for education and other services

Growing gap between wealthy and the rest of us

Growing gap between wealthy and the rest of us

• Richest 1% of population owns more than a third of the country’s wealth; worst wealth distribution since before the Great Depression

• Richest 1% averages 1.6 million dollars per year in income

• Richest 1% of population owns more than a third of the country’s wealth; worst wealth distribution since before the Great Depression

• Richest 1% averages 1.6 million dollars per year in income

U.S. Wealth Distribution, 2007U.S. Wealth Distribution, 2007

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Public attitudesPublic attitudes

Most likely state voters would choose to add fair taxes on the wealthy in order to maintain school funding [PPIC poll, 4/30/08]

Most likely state voters would choose to add fair taxes on the wealthy in order to maintain school funding [PPIC poll, 4/30/08]

Corporate loopholesCorporate loopholes

Corporate loopholes allow big companies to avoid paying fair share of taxes

One example: the oil severance tax

Corporate loopholes allow big companies to avoid paying fair share of taxes

One example: the oil severance tax

Corporate loopholesCorporate loopholes

Obstacle 2: state budget process

is undemocratic and broken

Obstacle 2: state budget process

is undemocratic and broken Instead of simple majority, state legislature

must vote by a two-thirds margin to pass budget

California is one of three states to require a 2/3 margin to pass budget

This allows for a “tyranny of the minority” to thwart the will of the majority

Instead of simple majority, state legislature must vote by a two-thirds margin to pass budget

California is one of three states to require a 2/3 margin to pass budget

This allows for a “tyranny of the minority” to thwart the will of the majority

Obstacle 3: rules for raising state taxes are undemocratic Obstacle 3: rules for raising state taxes are undemocratic

The state Legislature needs a two-thirds margin to pass any new tax, instead of a simple majority

California is the only state in the country to require supermajority margins to pass a budget and a tax

It only takes a simple majority to reduce or eliminate an already existing tax

The state Legislature needs a two-thirds margin to pass any new tax, instead of a simple majority

California is the only state in the country to require supermajority margins to pass a budget and a tax

It only takes a simple majority to reduce or eliminate an already existing tax

“No New Taxes”?“No New Taxes”?

“My goal is to cut government in half in 25 years, to get it down to the size where we can drown it in a bathtub.” —Grover Norquist

“My goal is to cut government in half in 25 years, to get it down to the size where we can drown it in a bathtub.” —Grover Norquist

“No New Taxes”?“No New Taxes”?

“Taxes are the price

we pay for living in

a civilized society.”—Oliver Wendell Holmes

“Taxes are the price

we pay for living in

a civilized society.”—Oliver Wendell Holmes

Some fair tax ideasSome fair tax ideas

Return the top income tax brackets to 11% Re-assess non-residential real property Enact severance tax on oil produced in

California Enact modest taxes on stock transactions Reinstate the full vehicle license fee Repeal corporate tax loopholes put in

place during last dozen years’ budget deals

Return the top income tax brackets to 11% Re-assess non-residential real property Enact severance tax on oil produced in

California Enact modest taxes on stock transactions Reinstate the full vehicle license fee Repeal corporate tax loopholes put in

place during last dozen years’ budget deals

What can you do to help?What can you do to help? Share information with co-workers,

family, friends, and neighbors Attend public board meetings, ask

boards to pass resolutions and lobby to change state budget process and tax structure, and fully fund public education and other services

Demonstrate Write to your legislators – take a

brochure

Share information with co-workers, family, friends, and neighbors

Attend public board meetings, ask boards to pass resolutions and lobby to change state budget process and tax structure, and fully fund public education and other services

Demonstrate Write to your legislators – take a

brochure

For more information:For more information: www.cft.org

California Federation of Teachers

www.cbp.org

California Budget Project

www.caltaxreform.org

California Tax Reform Association

www.cft.org

California Federation of Teachers

www.cbp.org

California Budget Project

www.caltaxreform.org

California Tax Reform Association

What do we say?What do we say?

“Close loopholes, not schools!!”

“Close loopholes, not schools!!”