The California budget crisis continues. Although the California State Legislature has a clear majority
of Democrats, an unfortunate requirement of our laws is that a two-thirds majority is required for
budgets and tax raising. This allow the minority Republicans to obstruct our government and exert
undue influence on budget and tax policy.
Part of the problem is that the legislature Republicans have all signed pledges not to raise taxes, ever. The Republicans ought to have the good sense to admit their mistake and ask their constituents’ forgiveness for facing up to reality.
President Reagan’s tax cuts on the wealthy in the early 80s led to a collapse and recession, just as Bush’s tax cuts on the rich have done the same. Raising taxes on high incomes discourages speculation and encourages long term investments so it leads to long term growth and stability. Investors know that if they will be highly taxed on business profits, then they will be more likely to re-invest profits in building up the company rather than milking it. One way to build companies with excess profits is to raise worker pay to attract a high quality workforce to out-compete investors who drain off capital with high dividends.
We should have a 50% tax rate on income over 3 million annually, 60% tax on income over 6 million, 70% tax on income over 9 million, 80% tax on income over 12 million, and 90% tax on income over 15 million.
We should take the excess tax revenue and fund universal health care and universal education, including free college education for all who have good grades and want to learn. And we should have a constitutional convention to clean up our California Constitution and get rid of the two-thirds majority requirement for budgets and tax increases.