California is in crisis. From wildfires, to blackouts, to the deadliest month of the COVID pandemic, disasters of every kind are wreaking havoc across the state. Now with the state facing a $54 billion dollar deficit, due to the economic ramifications of COVID, massive cuts to critical public programs are slated to go into effect come October. That’s only going to make a bad problem immeasurably worse.
Yesterday marked the final day of the legislative session, when representatives had the last chance to pass a tax on multi-millionaires which would have provided desperately needed revenue and curbed growing inequality, but they didn’t even let the bill advance to the floor – let alone receive a vote. This failure ensures that another calamity will inflict widespread damage on the Golden State, but this time it’s not mother nature or aging infrastructure – it’s our legislature’s own creation.
California representatives had months to create a plan to adequately fund our state for the next fiscal year. Instead they stalled for time, hoping the federal government would bail them out. But relying on Mitch McConnell is a losing bet, so the funding never came. By the time they realized it, they bickered to the end of the session waiting to be saved by the bell.
Unlike California state lawmakers, most Californians don’t have the privilege of a deadline releasing them from their responsibilities; the rent is still due and the kids have to eat. However, there are a few California representatives that have been working tirelessly to save the state by taxing the rich, and the fight for a millionaire’s tax is only just beginning.
In mid-July, 15 Assembly Democrats introduced a millionaire’s tax in an effort to tackle inequality and fund our state by providing billions of dollars to schools, housing, and healthcare programs that are crucial to our recovery from the pandemic. This bill would create a permanent 1% surcharge on incomes exceeding $1 million, 3% on earnings above $2 million, and 3.5% on earnings exceeding $5 million, impacting just under 70,000 high earning taxpayers and delivering $6 billion a year to the state’s empty coffers.
Instituting a millionaires’ tax would not only open up new revenue for the state, but it would help solve the soaring levels of inequality that are threatening to push out longtime residents grappling from recession-level unemployment numbers. The last thing we should be doing during these tough economic times is making cuts to middle and low-income communities when the state is home to 165 billionaires (a quarter of America’s billionaires). California is the 5th largest economy in the world with numerous wealthy individuals, why take resources away from vulnerable Californians when there’s already such a massive pool of wealth to pull from?
The additional bonus to unemployment insurance from the CARES act was a welcome reprieve to millions of Califorians throughout the pandemic, but with benefits now long expired and a future Congressional deal seemingly unlikely, residents are now turning toward the state to pick up the ball. Unemployment claims have unsurprisingly jumped to near April level numbers now that federal aid has turned temporary job losses into permanent losses, and hundreds of thousands of workers now face the grim economic circumstances brought about by this pandemic.
Meanwhile, in what almost seems like a different world, tech workers from Silicon Valley are purchasing second homes in resort towns like Tahoe and Aspen at record numbers, while their tech company shares reach record highs. Most Californians are jobless and struggling to put food on the table, while the rich contemplate which vacation house to stay in. If the uber-wealthy can afford a second or third home during this crisis – they can easily afford to dig a bit deeper and give back to our struggling state.
Admittedly, it would take more than a floor vote on one bill to put the state’s economy back on track and widely reduce inequality, but the fact that the legislature couldn’t take this basic action shows they are not addressing this crisis with the urgency it deserves. When the legislature reconvenes in January, we hope that California’s representatives will hear and pass this bill along with a wealth tax, and an unrealized capital gains tax to create a base of equitable funding that would avoid the slip towards years of austerity. The Golden State doesn’t need another disaster.
