Progressives again raise a wealth tax

From: POLITICO California Playbook - Tuesday Jan 24,2023 02:12 pm

Jan 24, 2023

By Jeremy B. White, Lara Korte, Matthew Brown and Ramon Castanos

Presented by Southern California Edison

THE BUZZ: A prosperous upper class, an enormous wealth gap, a yawning budget deficit and the Democratic votes to raise taxes without Republican help.

California would seem to have the groundwork in place to enact a wealth tax. But don’t bet your yacht on it.

Lawmakers launched Sacramento’s latest campaign for the elusive progressive lodestar Monday. This time, they’re clamoring in concert with legislators in seven other blue states. Their object is a national network of wealth taxes that could prevent the ultra-affluent from simply relocating their assets from California to New York or Hawaii. Sen. Elizabeth Warren’s federal fizzle shifts the action to the states.

Progressive backers and their organized labor allies call the effort a matter of basic economic justice. California’s tax system already relies disproportionately on revenue from the richest, thanks to taxes voters approved in 2012 and extended in 2016. The affluent have still flourished to the point that California boasts the world’s fourth-largest GDP and enjoyed titanic budget surpluses. Wealth tax proponents argue the state can distribute that bounty equitably by ensuring people who make more than $50 million return their fair share.

Those arguments have yet to produce any progress toward a California wealth tax. Lawmakers have floated bills every year since 2020, with varying levels of labor support, in addition to tax increases to fund Covid-19 recovery and pay for single-payer healthcare. None of them has received a committee vote — never mind floor votes that would need to clear two-thirds hurdles, or persuading the tax-averse Gov. Gavin Newsom (Wealth tax seekers are “not part of the conversation,” Newsom said in 2021, and their ideas are “going nowhere.”).

Assembly member Alex Lee and his allies hope 2023 will be different. They believe the multi-state movement can build broader momentum to make up for flagging national efforts. They hope Newsom will be moved by polling that suggests voters approve of saturating the wealthy. They note the extra revenue could cover a more-than-$20-billion budget deficit without requiring California to slash climate spending or deplete its rainy day fund.

Anything that did get through the Legislature and Newsom would need the electorate’s approval. That would require a campaign capable of overcoming deep-pocketed opponents — though it may easier to convince a majority of voters than to get 54 Assembly members, 27 senators, and one governor. It's “harder getting it through this building than getting it through voters,” Lee said Monday. This is a state where Sen. Bernie Sanders won a primary plurality, but the talk of millionaires and billionaires may not translate into legislative action.

A message from Southern California Edison:

We believe everyone should have the right to breathe clean air. That’s why we’re leading the charge for more clean, renewable energy. We’re a national leader in battery storage and delivering solar energy to our customers. We’re working to cut emissions from buildings and freeways. And we proudly support the growth of green jobs.

BUENOS DÍAS, good Tuesday morning. California had scarcely begun to grapple with a weekend mass shooting in Monterey Park before another pair of attacks left seven dead in Half Moon Bay Monday, restarting the grim cycle of mourning the dead and seeking a motive for the assailant.

Got a tip or story idea for California Playbook? Hit us up at jwhite@politico.com and lkorte@politico.com or follow us on Twitter @JeremyBWhite and @Lara_Korte.

A message from Southern California Edison:

QUOTE OF THE DAY: ““If you’re going to be in a fight, you want Marjorie in your foxhole. When she picks a fight, she’s going to fight until the fight’s over. She reminds me of my friends from high school, that we’re going to stick together all the way through.” Speaker Kevin McCarthy on his indissoluble bond to Rep. Marjorie Taylor Greene, via The New York Times.

BONUS QOTD: “For the working class, tax avoidance is a felony. For the megarich, tax avoidance is an industry.” Lee on a tax that would fully account for peoples’ net worth.

TWEET OF THE DAY:

A tweet from California Assemblymember Marc Berman.

AsmMarcBerman

WHERE’S GAVIN? Nothing official announced.

A message from Southern California Edison:

This is a time of great change and uncertainty. But what remains constant is our commitment to building a clean energy future for everyone. That’s why SCE is standing with California, leading the charge to reduce greenhouse gas emissions, improve local air quality and support continued economic growth. We’re a national leader in battery storage and delivering solar energy to our customers. We’re working to cut emissions from buildings and freeways. And we proudly support the fastest the growth of green jobs. We’re more than 13,000 employees serving 15 million Californians. When we work together, we can move full speed ahead into a clean energy future.

JOIN POLITICO ON 2/9 TO HEAR FROM AMERICA’S GOVERNORS: In a divided Congress, more legislative and policy enforcement will shift to the states, meaning governors will take a leading role in setting the agenda for the nation. Join POLITICO on Thursday, Feb. 9 at World Wide Technology's D.C. Innovation Center for The Fifty: America's Governors, where we will examine where innovations are taking shape and new regulatory red lines, the future of reproductive health, and how climate change is being addressed across a series of one-on-one interviews. REGISTER HERE.

TOP TALKERS

— “How the Lunar New Year shooting in Monterey Park unfolded,” by the Los Angeles Times’ Jeong Park, Julia Wick, Marisa Gerber, Summer Lin and Richard Winton: “It was late Saturday when Monterey Park police officers — including some rookies who had been on patrol for only a couple of months — rushed to the bloody scene, but the suspect was gone. About 20 minutes later, the gunman barged into another dance studio, the Lai Lai Ballroom & Studio in nearby Alhambra, but two people managed to wrestle the gun away from the suspect, who fled in a white cargo van, according to witnesses.”

— “7 dead, 1 critically injured after shooting at 2 farms in Half Moon Bay; suspect in custody,” by ABC7: “Deputies found four victims deceased with gunshot wounds. A fifth victim, also suffering from gunshot wounds, was transported to Stanford Medical Center with life threatening injuries.”

— “How Kevin McCarthy forged a bond with Marjorie Taylor Greene,” by The New York Times’ Jonathan Swan and Catie Edmondson: The close alliance that has developed between the speaker and the hard-right Georgia Republican explains his rise, how he might govern and the heavy influence of the extremes on the new House G.O.P. majority.

CALIFORNIA AND THE CAPITOL CORRIDOR

— “California lawmakers face Supreme Court limits as they weigh response to Lunar New Year shooting,” by POLITICO’s Lara Korte, Jeremy B. White and Alexander Nieves: Calls for legislative action following the mass shooting at a dance hall outside Los Angeles were tempered Monday by a hard reality: The legal landscape for gun laws has never looked so bleak.

— “Sexual abuse allegations spanning decades hit California area’s Boy Scouts, schools, foster care,” by The Sacramento Bee’s Adam Echelam, Erin Tracy and Kevin Valine: “The girl told her social worker what was happening, but the Stanislaus County Community Services Agency did nothing for a month as the abuse continued, the lawsuit alleges.”

— “S.F. police often use these marijuana-related words to justify fruitless searches of Black people,” by the San Francisco Chronicle’s Susie Neilson and Justin Phillips: “San Francisco police officers regularly claim they suspect marijuana or smell a suspicious odor to justify needless searches of Black people in the city, a Chronicle analysis of more than three years of stop data has found.”

— “Caltrans wants millions of more dollars to clear thousands of California homeless encampments,” by The Sacramento Bee’s Maggie Angst and Lindsey Holden: “California Department of Transportation has requested $20.6 million over the next two years to remove hazardous materials from encampments on its properties. It is also asking for an additional $5.8 million to expand its newly established Office of Homelessness and Encampments.”

— “At an Oakland Art School, a teacher's arrest for alleged sexual abuse reopens a painful history,” by KQED’s Holly McDede: “In December, the alleged victim filed a lawsuit against OSA and the Oakland Unified School District, claiming school officials “did nothing in response to obviously suspicious and dangerous behavior, allowing the abuse to continue and escalate in severity.”

— “S.F.’s plan to build 82,000 housing units has been approved by the state,” by the San Francisco Chronicle’s J.K. Dineen: “‘This finding was based on, among other reasons, programs and actions to affirmatively further fair housing and reduce governmental constraints to facilitating housing production,’ stated the letter from Paul McDougall, HCD’s program manager for planning grants and incentives.”

— “When students change gender identity, and parents don't know,” by The New York Times’ Katie J.M. Baker: “Jessica Bradshaw found out that her 15-year-old identified as transgender at school after she glimpsed a homework assignment with an unfamiliar name scrawled at the top. When she asked about the name, the teenager acknowledged that, at his request, teachers and administrators at his high school in Southern California had for six months been letting him use the boy’s bathroom and calling him by male pronouns.”

BIDEN, HARRIS AND THE HILL

— “Pelosi, Breed to celebrate $400M grant for the Golden Gate Bridge,” by the San Francisco Chronicle’s Jessica Flores: “‘The Federal Highway Administration’s $400 million investment will help ensure that this iconic landmark continues to safely and reliably serve our region for many years to come,’ Pelosi said in a previous news release.”

— “AI needs to be regulated now,” opines Rep. Ted Lieu in The New York Times: “I didn’t write the above paragraph. It was generated in a few seconds by an A.I. program called ChatGPT, which is available on the internet. I simply logged into the program and entered the following prompt: ‘Write an attention grabbing first paragraph of an Op-Ed on why artificial intelligence should be regulated.’”

— “McCarthy hands detractors critical posts to influence legislation,” by POLITICO’s Jordain Carney and Katherine Tully-McManus: The California Republican announced his picks for the Rules Committee on Monday evening, and the nine GOP members on the panel will include Reps. Chip Roy (R-Texas) and Ralph Norman (R-S.C.), two Republicans who initially voted against McCarthy during his 15-ballot speaker fight before ultimately supporting him. Rep. Thomas Massie (R-Ky.), known for being a libertarian-leaning gadfly and thorn in leadership’s side, is also getting a seat.

SILICON VALLEYLAND

— “DOJ Poised to sue Google over digital ad market dominance,” by Bloomberg’s Anna Edgerton, Emily Birnbaum and Leah Nylen: “The lawsuit will mark the Justice Department’s second monopoly case against the company, which is the No. 1 player in the $278.6 billion U.S. digital-ad market, controlling most of the technology used to buy, sell and serve online advertising.”

— “Elon Musk testifies in Tesla ’Funding secured’ securities fraud trial,” by The Washington Post’s Faiz Siddiqui: “I really have two big assets, which is Tesla and SpaceX. I believe with the SpaceX stock alone, I felt like funding was secured,” he said. “It’s very important for the jury to know my SpaceX shares alone would have meant that funding was secured. Very important.”

— “For Tech Companies, years of easy money yield to hard times,” by The New York Times’ David Streitfeld: “Rock-bottom rates were the secret engine fueling $1 billion start-ups and virtual attempts to conquer the physical world. But in 2023, reality bites.”

MIXTAPE

— “Arte Moreno to maintain ownership of Angels after exploring sale,” by ESPN’s Alden Gonzalez.

— “The killer of a skateboarding legend went unnamed for years. Could deaths have been prevented?” by The San Francisco Standard’s David Sjostedt.

— “Wetsuit shaming in San Francisco divides Bay Area swimmers,” by The Wall Street Journal’s Robert McMillan.

— “Aid available to those who lost jobs or businesses in California's storms. Here's how to apply,” by The Sacramento Bee’s David Lightman.

BIRTHDAYS

Reps. Mike Thompson , John Garamendi, and Lou Correa … Sydney Burton of the Los Angeles Times … Abigail Disney

CALIFORNIA POLICY IS ALWAYS CHANGING: Know your next move. From Sacramento to Silicon Valley, POLITICO California Pro provides policy professionals with the in-depth reporting and tools they need to get ahead of policy trends and political developments shaping the Golden State. To learn more about the exclusive insight and analysis this -only service offers, click here.

Want to make an impact? POLITICO California has a variety of solutions available for partners looking to reach and activate the most influential people in the Golden State. Have a petition you want signed? A cause you’re promoting? Seeking to increase brand awareness amongst this key audience? Share your message with our influential readers to foster engagement and drive action. Contact Jesse Shapiro to find out how: jshapiro@politico.com.

DOWNLOAD THE POLITICO MOBILE APP: Stay up to speed with the newly updated POLITICO mobile app, featuring timely political news, insights and analysis from the best journalists in the business. The sleek and navigable design offers a convenient way to access POLITICO's scoops and groundbreaking reporting. Don’t miss out on the app you can rely on for the news you need, reimagined. DOWNLOAD FOR iOS– DOWNLOAD FOR ANDROID.