Business
OP-ED: Proposition 40: It’s Time to Play Chess, Not Checkers
Proposition 40 would impose a one-time 5 percent tax on the wealth of Californians with more than $1 billion in assets. Most of that money would go toward health care, with the remainder supporting food assistance and education-related programs.
I understand the frustration driving Proposition 40. I share our labor partners’ concerns about protecting health care and essential services at a time when working families are already under enormous pressure.
But labor itself is divided over Proposition 40, and there is good reason to look carefully at what this measure could mean beyond the money it promises to raise.
Proposition 40 would impose a one-time 5 percent tax on the wealth of Californians with more than $1 billion in assets. Most of that money would go toward health care, with the remainder supporting food assistance and education-related programs.
Those are worthy investments. The question is whether this is the right way to pay for them.
California’s independent Legislative Analyst says the measure could raise tens of billions of dollars in the short term. But that same analysis warns that California could eventually lose hundreds of millions of dollars a year in ongoing income-tax revenue if some wealthy taxpayers leave the state or change their financial behavior.
That matters because those dollars help support the General Fund and the broader system of programs and services Californians rely on.
So let’s be clear: This is not about feeling sorry for billionaires. Billionaires will be fine.
This is about protecting the people who will not be fine if we get the policy wrong.
For decades, those of us in Black media have watched public policy debates move from crisis to crisis. We have also watched Black communities deal with the consequences when decisions made in Sacramento or Washington did not fully consider what would happen two, three, or four moves later.
We know what happens when funding disappears. Community organizations struggle. Small businesses lose support. Programs serving young people are squeezed. Schools and local governments are asked to do more with less. The people with the fewest resources are usually the first to feel the consequences.
That history should make us cautious about making major changes to California’s tax system without considering the entire board.
If California believes billionaires should contribute more, then let’s have that conversation. There is nothing unreasonable about asking whether people who have benefited enormously from California’s economy should contribute more to sustaining it.
But we should build tax policy that is thoughtful, sustainable, and difficult to avoid. We should not create a temporary solution that could leave us confronting another revenue problem down the road.
This is also why I respect those in labor who support Proposition 40, even though I have reached a different conclusion. They are responding to very real concerns about health care and the people who depend on it. Those concerns should not be dismissed.
But neither should legitimate questions about Proposition 40.
Too often our politics tells us that if we agree with the goal, we must agree with the proposed solution. That is not how responsible public policy works.
You can believe health care must be protected and still question the mechanism being proposed to protect it.
You can believe billionaires should pay more and still ask whether this particular tax is the smartest way to accomplish that.
And you can stand with working people while insisting that California consider the long-term consequences for all of the public programs working people depend upon.
We need to stop treating complicated economic decisions like a game of checkers, where we look only at the move directly in front of us.
We need to play chess.
Look at the whole board. Think several moves ahead. Understand what happens after the first check is collected and spent.
The question before Californians is not whether billionaires can afford to pay more. They can.
The question is whether Proposition 40 is the right way to do it and whether we are confident enough in the consequences to make this kind of change.
Our communities cannot afford for us to discover the answer too late.
