NEW YORK - JUNE 02: Warren Buffett, Chairman and CEO of Berkshire Hathaway, looks on before testifying before the Financial Crisis Inquiry Commission (FCIC) at The New School June 2, 2010 in New York City. The bipartisan committee was created by Congress and is investigating the causes of the financial crisis. (Photo by Mario Tama/Getty Images)
David Atkins at the liberal blog Calitics has a new idea for changing taxation in California: change the 2/3 vote requirement for tax increases to make it easier to tax the rich.
He argues that while most voters don't want to change the requirement -- which was part of Prop 13 -- they might be willing to do so if the change affected only tax increases on corporations and on housesholds making at least $250,000 (or $300,000). So for businesses and the rich, a new tax would require only a majority of vote. The rest of us would still have protection.
Atkins is convinced that this would pass constitutional muster. I'm not so sure. Yes, progressive taxation when it comes to rates -- that is, charging higher rates for people with higher incomes -- is constitutional. But having a different constitutional standard for votes on taxes that depend on who is being taxed is another question.
Either way, it's another sign that the left is determined to tax the rich. The California Federation of Teachers recently indicated support for an initiative that would raise taxes on the top 1 percent of California earners.
Whatever you think of the merits of taxing the rich, this much is clear: higher taxes on the rich are not in and of themselves a solution to the budget problem. Part of this reality is math. The revenues from taxes on the rich are not in and of themselves enough to solve the budget crisis. (The CFT tax would bring in only $2.5 billion, at a time when the state is facing a budget hole 10 times that). The other part is that the budget system itself constantly works to create deficits, by ratcheting up certain kinds of spending and ratcheting down the tax base.
That system needs to be blown up and redesigned first. And yes, one change should be the elimination of the two-thirds requirement on tax increases (as well as other supermajority requirements for fees and certain budget items). But it would be better if the elimination of these rules applied to everyone. Democracy isn't just for the rich.