As we navigate the global COVID-19 pandemic, Californians are experiencing crises that reach far beyond the immediate public and personal health emergencies. The poorest Californians, disproportionately people of color in the service, hospitality, and healthcare sectors, have either lost their jobs, resulting in a spike to unemployment unlike anything we have seen in our lifetimes, or are risking their health performing essential frontline services.
In April, the Bureau of Labor Statistics reported that half of the state and local job losses nationwide were in public education, exceeding the education job losses during the Great Recession. By stark contrast, other segments of our society are thriving under the conditions of this pandemic: between March and May, while most of us were sheltering in place and economic activity slowed dramatically, billionaire wealth grew exponentially. News feeds are markedly silent about the windfall gains the country’s wealthiest are enjoying.
Our current system is turning billionaires into multi-billionaires while teachers are using their paychecks to purchase school supplies. We need our elected leaders to include the mega-profits and accumulated wealth in any plan to help our state weather this storm. The state budget must not be balanced on the backs of our communities, our students, the most vulnerable, and the essential workers that have helped California mitigate the pandemic.
A Billionaire Tax of 1 percent on individuals with net worth over $50 million and 1.5 percent on wealth over $1 billion would bring roughly $18.5 billion to the state each year. Californians deserve a budget that uses the untapped resources of those who can afford to share their pandemic profits.
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- This working paper reviews tax revenue options that could help fill the gaps of our current budget crisis and provide a progressive revenue source to address the economic changes that California needs.
- 1 in 4 of the country’s billionaires call California home.
- The deadly COVID-19 pandemic and the recession it sparked has created an unprecedented budget deficit totaling more than $50 billion. In this way, the virus is also threatening lives indirectly through deep cuts proposed to the state’s critical social services that are often life-saving for the state’s most vulnerable populations.
- Neither the Governor nor the Legislature has included serious revenue proposals in their state budget plans, despite precedent for doing so. For example, in 2009 a republican governor called for temporary tax increases, providing 21% of total budget solutions, yet under the 2020 May Revision temporary tax increases are only at 8%.
- The Great Recession has had long-lasting consequences for California’s public schools and colleges and our education system had not even recovered when the pandemic began. That recession hurt a generation of students, critically needed teachers were pushed out of the classroom, and our schools, colleges, and universities lost thousands of classified employees and faculty whose jobs were cut. (In fact, school funding has not rebounded since the corporate property tax loophole was created in 1978; California’s per student spending on instruction ranked 7th in the nation in 1977 and 41st by 2016).
- The pandemic has been a boon for billionaires around the world, and as ordinary Californians were sheltering in place and losing employment, California’s billionaires were getting wealthier by the day–obtaining $140 billion from March through May of 2020.
- Our state budget must not be balanced on the backs of our communities, our students, the most vulnerable, the essential workers, and the crucial public services that have helped California mitigate the pandemic.
- We need Governor Newsom and our legislators to include the mega-profits and accumulated wealth in any budget plan to help our state weather this storm and repair decades of financial damage to our school system. Californians deserve a budget that uses the untapped resources of those who can afford to share their pandemic profits.
- A net worth tax of 1% on individuals with net worth over $50 million and an additional 0.5% tax on worth over $1 billion would bring roughly $18.5 billion to the state each year.