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Brown Didn't Get Rolled; We Did

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LA Times columnist George Skelton writes this morning that Gov. Brown got "rolled" by the California Federation of Teachers in a deal to create a new compromise tax-hike initiative.

Brown and the CFT had had competing initiatives.Now they have one initiative, to much applause from Democrats (and the sniping of some commentators).

Skelton sees the deal as favoring CFT because it includes higher taxes for the rich that resemble those in CFT's original MIllionaire's Tax measure -- and were far more than those in Brown's measure. Skelton sees that as problematic because higher rates create more volatility, and volatile revenues have added to the state's budget swings.

But the rates are the wrong point of emphasis -- and thus miss the point.

On the biggest difference between the governor and the CFT, Brown won.

That difference? Whether the tax increase should be permanent or temporary. CFT's Millionaire's Tax was a permanent change in the rate. Brown's initiative was a temporary tax for five years. The compromise? A four-year temporary tax increase on sales of goods, and a a seven-year temporary tax increase on income.

Clear advantage, Brown.

But not advantage, California. If you believe the state's governments need more revenues, and that the state budget is structurally out whack, then permanent tax increases make much more sense than temporary ones.

And on the politics, since passing tax increases is so difficult and so rare -- and the polling on such increases is so positive now -- it's probably a miscalculation to go with temporary tax increases now when permanent increases are possible.

At the very least, Brown and CFT are paying a huge price in energy, time and dollars for revenues that are only temporary.

I'm not sure either side got rolled in the end. But if you were to say that one side did, it wouldn't be Brown.

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