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Will California Supreme Court Axe This Tax Limitation Initiative?

Will California Supreme Court Axe This Tax Limitation Initiative?

The California state legislative offices in Sacramento, Calif., on Aug. 29, 2023. (John Fredricks/The Epoch Times)

John Seiler

John Seiler

12/7/2023

Updated: 12/21/2023

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Commentary
For Gov. Gavin Newsom and some members of the California Legislature, state taxes can never be high enough. That’s why they are trying to stop voters from deciding the fate of the Taxpayer Protection and Government Accountability Act. According to Secretary of State Shirley Weber, the act scored the required number of signatures and is eligible for the Nov. 5, 2024 ballot.
The California Supreme Court now has taken up the attempt to throw the initiative off the ballot, denying voters their right to decide the issue. Said Newsom spokesperson Omar Rodriguez, “This radical effort led by wealthy business interests impermissibly seeks to completely restructure our system of government in a way that will hobble the state’s ability to respond to future crises. We are pleased the Court decided to hear this important case.”
Mr. Newsom himself is a “wealthy business interest.” Yet the initiative mainly would limit how much more the middle-class could be gouged.
According a comprehensive tally by Madison Trust Company, “California has the highest state sales tax, with a rate of 7.25 percent.” Many local governments add their own sales taxes. The California Department of Tax and Fee Administration lists all city and county tax rates. The highest currently are the cities of Alameda, Albany, Hayward, Newark, San Leandro, and Union City, all in Alameda County, at 10.75 percent.
For income taxes, Madison Trust found, “California has the highest state income tax, with a rate of up to 13.3 percent. California has graduated-rate income taxes that range from 1 percent to a 13.3 percent tax rate on income of more than $1 million. Middle-class Californians pay an income tax rate in the range of 6 percent to 9.3 percent.”
Note the 9.3 percent rate paid by the middle-class, the highest by far in any state. In rival states Florida and Texas, there is no income tax for the middle class or anybody else.
Worse, on Jan. 1 what’s called a “stealth tax increase” will hit, with the top income tax rate of 13.3 percent, already the highest in the nation, pushing up to 14.4 percent.
No wonder so many people keep fleeing the once Golden State. The latest data shows between 2021 and 2022, 818,000 Californians left the fun in the sun. However, 476,000 moved here. The net loss was 342,000.
Having come here in 1987, during a decade that saw the state’s population soar by 6 million, this is just strange. Only defective policies, especially high taxes and housing prices, could cause so many to flee paradise.

Inaccurate Title

The title and summary voters see on their ballots for initiatives is written by the state attorney general. Incumbent Rob Bonta generally has been fairly objective. He has shunned the blatant bias of such predecessors as Xavier Becerra, who in 2020 was sued by four separate initiative efforts for bias.
Unfortunately, in the case of the Taxpayer Protection Initiative, here’s what Mr. Bonta came up with for the title: “Limits Ability of Voters and State and Local Governments to Raise Revenues for Government Services. Initiative Constitutional Amendment.”
Note it doesn’t say “taxes” but “revenues.” And voters will lose all those wonderful “services.”
The summary, which fewer voters will read, is better: “For new or increased state taxes currently enacted by two-thirds vote of Legislature, also requires statewide election and majority voter approval. Limits voters’ ability to pass voter-proposed local special taxes by raising vote requirement to two-thirds.”
According to Ballotpedia, so far the Yes side has garnered $17 million in contributions, including $8 million from the California Business Roundtable and $3 million from emergency medical service provider AMR Holdco. As of now, the No side has no listed contributions, as they are awaiting a court decision.
But if the court lets the initiative remain on the ballot, expect a “battle royale,” with the contributions on each side soaring above $50 million, maybe $100 million. Listed opposition groups all have campaign war chests filled with money derived from the taxpayers and want to make sure the tax spigots remain open:

Unions

  • AFSCME California
  • California Professional Firefighters
  • California State Council of Laborers
  • SEIU California State Council

Organizations

  • California Alliance for Jobs
  • California Contract Cities Association
  • California Special Districts Association
  • California State Association of Counties
  • League of California Cities
  • Rebuild SoCal Partnership
Supreme Court of California. (Google Maps/Screenshot via The Epoch Times)

Supreme Court of California. (Google Maps/Screenshot via The Epoch Times)

Conclusion: Voters Likely Will Get to Decide

The general rule for California initiatives is the courts let them stay on the ballot, then decide any issues after the vote. That way, if the initiative fails, there’s no issue for the court to decide. If it passes, then any problems can be cleared up.
An exception was Proposition 9, which would have carved up California into three separate states. As the San Francisco Chronicle reported on Aug. 15, 2018, “The court said it usually allows ballot measures to go to the voters before considering constitutional challenges. But in this case, the six justices said, ‘significant questions regarding the proposition’s validity’ and the ‘potential harm’ of allowing a public vote before those questions are resolved ‘outweighs the potential harm in delaying the proposition to a future election.’”
It was never revived. And in any case, if it had passed, it’s unlikely U.S. Congress would have given final approval for the statewide divorce. Most Americans already consider one California too many.
That exception obviously does not apply to a dispute over the Taxpayer Limitation Initiative’s particulars. Indeed, this is just the kind of initiative Gov. Hiram Johnson intended when he enacted his progressive reforms. As he said in his 1911 First Inaugural Address: “I commend to you the proposition that, after all, the initiative and the referendum depend on our confidence in the people and in their ability to govern. The opponents of direct legislation and the recall, however they may phrase their opposition, in reality believe the people cannot be trusted.”
Although Mr. Newsom and many state lawmakers don’t trust the people to decide how much they will be gouged by taxes, the Supreme Court probably will.
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John Seiler

John Seiler

Author

John Seiler is a veteran California opinion writer. Mr. Seiler has written editorials for The Orange County Register for almost 30 years. He is a U.S. Army veteran and former press secretary for California state Sen. John Moorlach. He blogs at JohnSeiler.Substack.com and his email is writejohnseiler@gmail.com

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