A Progressive Alternative to Austerity

Passing steeper taxes on the rich isn’t as hard as you’d think.

Fred Glass

The "Yes on 30" campaign won billions of dollars for California public schools by increasing taxes on the rich. (Quinn Dombrowski / Flickr / Creative Commons)

There is no alter­na­tive to aus­ter­i­ty,” insist the rich, along with their politi­cians, foun­da­tions, think tanks and media.

Demographic changes favoring a clear progressive message, coupled with the Occupy movement’s lasting insight that the 1 percent are robbing the rest of us blind, provide the opening to beat back the core conservative idea: that the problem is government and society should seek help from the wisdom of the rich.

They’ve been say­ing it for decades, along with, tax­es are bad,” gov­ern­ment doesn’t work” and pub­lic employ­ees are greedy.”

Con­se­quent­ly, com­mon wis­dom had it that you can’t raise tax­es.” Even peo­ple who should have known bet­ter believed this, while the pub­lic sec­tor slid down the tubes.

So how did Propo­si­tion 30 suc­ceed? This mea­sure, passed by Cal­i­for­nia vot­ers last Novem­ber, rais­es $6 bil­lion a year for schools and ser­vices — and in a sup­pos­ed­ly anti-tax” state. The mon­ey comes most­ly through an income tax hike on rich peo­ple, along with a tiny sales tax increase of 0.25 percent.

The sto­ry should be bet­ter known, because with the right prepa­ra­tion, you could make it hap­pen in your state, too.

Test­ing the waters

Short­ly after Demo­c­rat Jer­ry Brown was elect­ed gov­er­nor in Novem­ber 2010, the Cal­i­for­nia Fed­er­a­tion of Teach­ers (CFT) pulled togeth­er labor and com­mu­ni­ty groups to craft a bal­lot mea­sure to raise the rev­enue need­ed to keep schools and ser­vices afloat. (Full dis­clo­sure: I am the CFT’s com­mu­ni­ca­tions director.)

For two years we had been lay­ing the ground­work for a pro­gres­sive tax: cre­at­ing edu­ca­tion­al mate­ri­als, pub­lish­ing opin­ion pieces, hold­ing train­ing ses­sions with our mem­bers and oth­er union­ists, and talk­ing with poten­tial coali­tion partners.

We fund­ed polls and focus groups, test­ing how like­ly var­i­ous types of tax­es would be to gain a majority.

Regres­sive tax­es — like sales tax­es and across-the-board income tax hikes — were viewed unfa­vor­ably. By spring 2011, peo­ple felt ordi­nary folks had already sac­ri­ficed enough, in the worst reces­sion since the 1930s.

The pub­lic believed, how­ev­er, that the rich and large cor­po­ra­tions need­ed to pay their fair share for the com­mon good. They were quite will­ing to vote for high­er tax­es on the rich.

As we refined our research, we decid­ed on three prin­ci­ples: bring in the most rev­enue pos­si­ble; draw it from those who could most afford to pay; and have the best chance of win­ning. We arrived at a Mil­lion­aires Tax: peo­ple who made a mil­lion dol­lars a year would pay an extra 3 per­cent, and peo­ple mak­ing $2 mil­lion an extra 5 per­cent, rais­ing $5 bil­lion a year.

Unfor­tu­nate­ly, Gov­er­nor Brown had his own pro­pos­al that didn’t fol­low those prin­ci­ples — it includ­ed both a half-cent sales tax hike and an across-the-board income tax increase. Peo­ple were out gath­er­ing sig­na­tures for Brown’s ini­tia­tive, our Mil­lion­aires Tax, and a third tax mea­sure spon­sored by a wealthy lib­er­al attorney.

The Mil­lion­aires Tax ran ahead of the oth­er mea­sures in five straight polls.

In ear­ly March 2012, the CFT helped orga­nize a march in the cap­i­tal against bud­get cuts and col­lege tuition increas­es. Thou­sands of stu­dents, fac­ul­ty, and oth­ers parad­ed Mil­lion­aires Tax signs out­side the governor’s window.

Two days lat­er, respond­ing to the governor’s charge that three com­pet­ing mea­sures would all lose, we released the results of a poll test­ing that idea. It found the oth­ers would get less than 50 per­cent, and the Mil­lion­aires Tax would win handily.

At that point the gov­er­nor called in CFT Pres­i­dent Joshua Pechthalt to talk. We com­pro­mised and com­bined the two pro­pos­als into Prop 30. The new mea­sure raised the top tax rates on income of $250,000 by 1 per­cent, on $300,000 by 2 per­cent, and on $500,000 by 3 per­cent. We had want­ed a per­ma­nent tax; Brown’s was for five years. The com­pro­mise extend­ed that to seven.

We knew the sales tax was a poi­son pill and we request­ed that Brown drop it entire­ly, but he explained that, to keep the Cham­ber of Com­merce neu­tral, he had promised not to demo­nize the rich,” mean­ing there had to be a shared sac­ri­fice” com­po­nent. He did agree to reduce it to a quar­ter cent.

Sales tax confusion

Our research was val­i­dat­ed dur­ing the cam­paign — peo­ple don’t like regres­sive tax­es like the sales tax. Mil­lions of dol­lars in oppo­si­tion ads did their best to con­fuse the vot­ers, call­ing Prop 30 a mas­sive tax increase on everyone.”

CFT’s coali­tion, Reclaim­ing California’s Future, includ­ed the Alliance of Cal­i­for­ni­ans for Com­mu­ni­ty Empow­er­ment (which emerged after ACORN’s demise), the Courage Cam­paign and Cal­i­for­nia Calls, a coali­tion of com­mu­ni­ty groups ded­i­cat­ed to reform­ing the tax sys­tem through vot­er edu­ca­tion and expand­ing the electorate.

Our coali­tion empha­sized the tax the rich” mes­sage in our lit­er­a­ture, pub­lic events and door-to-door can­vass­ing, but we were only part of a much broad­er Prop 30 coali­tion. The offi­cial campaign’s TV ads includ­ed ask­ing the wealthy to pay their fair share, but as one mes­sage buried among others.

The polling num­bers grad­u­al­ly sank to a bare 50 per­cent. One poll, three weeks before the elec­tion, had Yes on Prop 30 at just 48 per­cent, while the Nos had crept up to 44 percent.

The gov­er­nor cam­paigned most­ly on the idea that Prop 30 would save edu­ca­tion from fur­ther cuts, but threw in shared sac­ri­fice” and pay­ing down the state’s wall of debt” in his pub­lic pronouncements.

We agreed with the edu­ca­tion mes­sage, dis­agreed with the oth­ers, and insist­ed on a strong empha­sis on tax­ing the rich. We stressed to the gov­er­nor that, in order to neu­tral­ize the opposition’s ads, the pub­lic had to under­stand what ser­vices the tax paid for, who it taxed, and by how much.

In the final weeks, as the gov­er­nor worked with CFT and oth­er allies in ral­lies and media appear­ances, his mes­sage became clear­er and more con­sis­tent: Prop 30 would stop cuts to schools and was fair, because, he said (draw­ing on his Jesuit back­ground and cit­ing St. Luke), it asked those who are blessed with the most wealth to give back a lit­tle bit so every­one could benefit.”

Nine­ty per­cent of Prop 30’s rev­enues would come from tax­ing the wealthy; and the quar­ter-cent sales tax, he said, amount­ed to a mere pen­ny on a $4 sandwich.”

Reshap­ing debate

On Elec­tion Day, Prop 30 won 55 per­cent to 45 per­cent, reshap­ing the decades-old under­stand­ing of Cal­i­for­nia as an anti-tax” state. It is the sin­gle largest pro­gres­sive tax passed in the state since World War II, both in the amount of rev­enue raised and as a per­cent bump on the income tax­es of the wealthy.

What are some lessons from this tremen­dous victory?

If the word can be got­ten out effec­tive­ly, the elec­torate is ready to pass pro­gres­sive tax­es to pay for com­mon needs like schools and services.

Demo­graph­ic changes favor­ing a clear pro­gres­sive mes­sage, cou­pled with the Occu­py movement’s last­ing insight that the 1 per­cent are rob­bing the rest of us blind, pro­vide the open­ing to beat back the core con­ser­v­a­tive idea: that the prob­lem is gov­ern­ment and soci­ety should seek help from the wis­dom of the rich.

Prop 30’s mes­sage was that pub­lic edu­ca­tion is the foun­da­tion of a decent soci­ety and we can restore that promise if the rich pay their fair share of taxes.

The anti-Prop 30 mes­sages were the same as always — gov­ern­ment can’t do any­thing right; the rich will leave Cal­i­for­nia if we tax them; tax­es are too high; if we remove the waste, fraud, and abuse in gov­ern­ment there will be plen­ty of mon­ey for schools.

But these ideas, so effec­tive in the past, had lost their poten­cy, because, espe­cial­ly post-Occu­py, the pub­lic under­stands that eco­nom­ic inequal­i­ty is growing.

Spend­ing tens of mil­lions of dol­lars didn’t work for the rich this time. In fact, it back­fired — they proved our point. We didn’t have to demo­nize” the rich; they did it themselves.

Anoth­er key, of course, was the old-fash­ioned work of reach­ing out to core con­stituen­cies. The Reclaim­ing coali­tion was cru­cial, along with a ground cam­paign by the broad­er labor move­ment, which was heav­i­ly mobi­lized to fight an anti-union mea­sure on the bal­lot (which lost).

Vol­un­teers and staff spent count­less hours knock­ing on doors, phonebank­ing, ral­ly­ing, edu­cat­ing. We reached out sys­tem­at­i­cal­ly to less-like­ly vot­ers — young peo­ple, col­lege stu­dents, immi­grants, low­er-income com­mu­ni­ties of col­or — and con­vinced them to come out to vote for their own futures.

Cred­it for this ori­en­ta­tion is due espe­cial­ly to Cal­i­for­nia Calls, which has tar­get­ed less-like­ly vot­ers and stayed in touch over sev­er­al elec­tion cycles.

This year Cal­i­for­nia has begun to restore funds for pub­lic edu­ca­tion for the first time in years. There is an alter­na­tive to aus­ter­i­ty; its name is pro­gres­sive taxes.”

Reprint­ed with per­mis­sion from Labor Notes.

Fred Glass is com­mu­ni­ca­tions direc­tor for the Cal­i­for­nia Fed­er­a­tion of Teach­ers.
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