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Millionaire's Tax On the Way in California? Backers Make Deal With Governor Brown

As progressive groups and unions make a deal to push for a tax increase on the rich coupled with a small sales tax hike, some wonder if they've compromised too much.

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But not everyone's on board. Amanda Armstrong, a head steward for UAW Local 2865 at UC Berkeley, says she’s “dissatisfied that the CFT, but also other unions, earlier, basically abandoned the millionaires tax initiative and basically capitulated to what incredibly strong pressure from the Governor.” (Full disclosure: The UAW and AFSCME are both In These Times sponsors.)

Armstrong, who’s also active with Occupy Education, says that while the compromise is “much better than the Governor’s initial proposal,” the inclusion of a sales tax “really muddies the political content of the initiative.” Whereas the old proposal offered “an opportunity to clearly articulate a kind of politics of redistributing wealth from property owners, the meeting people’s basic needs,” she says the compromise “doesn’t break with this notion of shared sacrifice,” or “the politics of austerity.”

Jacobs says he understands there’s been “a time of mourning” for some progressives over the compromise, because “this was a movement-based campaign” to an extent that hasn’t been seen behind a tax measure since the right-wing Prop 13 in 1978. “Here we had a movement-based campaign in a progressive direction," says Jacobs and now it has become something different.” However, he warns that with California's several-billion dollar deficit, the consequences of failure would be “really unthinkable.”

Armstrong says when students marched from the Bay Area to the capitol in Sacramento in support of the Millionaire’s Tax, it was in part because CFT leaders told them “they needed political support in order to make the millionaire’s tax viable.” “The people who were in the inner circle with the Millionaire’s Tax were basically encouraging the grassroots movement to take on the issue,” she says, “but not to be actively involved with the decision-making process.” 

Pechthalt acknowledges that “we probably could have had a more transparent process.” But he says that while the measure “may have had community support…at the end of the day, there are a group of people who put their resources and their organizations behind the thing, they’re the ones who have to call shots. We couldn’t hold town hall meetings to make these decisions, and frankly the Governor wouldn’t have gone for it anyway.”

Pechthalt says that “very few” of the signatures for the more progressive measure were collected by volunteers—rather, almost all came from paid signature-gatherers. “If the movement had been so strong,” says Pechthalt, “why was it that it was my organization and the community organizations that put in 99 percent of the money... ?” Armstrong says CFT had indicated to activists that “they didn’t really need support in terms of signing people up for example, or they didn’t really need help with fundraising.”

Pechthalt told  In These Times in December it would be more difficult to galvanize union members to volunteer on behalf of Brown’s proposal because it included a regressive sales tax. Asked last week whether the new compromise will face the same challenge, Pechthalt says “it is a bit more difficult,” but “we’re trying to put this in some context.” He says a “united effort” behind the “overwhelmingly progressive” current compromise will fare better than a push for the more progressive version could have in the absence of “broad labor support and the support of the Democratic Party.”

Among the points of contention is where the money will go. The old “Millionaire’s Tax” guaranteed that some revenues would be used for higher education. The new one doesn’t. Pechthalt says he asked the governor’s staff to include such a guarantee in the compromise, but was rebuffed because legislative leaders wanted to first address “programs for the poor” and then turn to education.

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