While California has one of the richest economies in the world, education, health care and social services have been chronically underfunded in this state for decades. This decline has resulted in large part from a steady reduction in corporate taxes.  Therefore, the San Francisco Chapter of the California Faculty Association endorses the following measures:

1. Proposition 13 should be amended to exclude commercial property. Since commercial property is sold far less frequently than homes, Proposition 13 has served to shift the tax burden from businesses to homeowners.
2. Eliminate corporate tax loopholes so that corporations pay their fair share of taxes.
3. Raise taxes on people making more than $250,000 an additional 5 percent.
4. Pass AB656

Moreover, the San Francisco Chapter of the California Faculty Association contends that the state budget should be passed according to the principle of majority rule of 51 percent, not according to a two-thirds majority where in fact a minority of the legislature has a deciding voice.

Statistics on Current Taxes

Study Finds Accolerating Drop in Corporate Taxes

By Lynnley Browning
The New York Times
September 23, 2004

“America’s largest and most profitable companies paid less in corporate income taxes in the last three years, even as they increased profits, according to a study released yesterday.”
“The study also cited the proliferation of abusive tax shelters and increasingly aggressive corporate lobbying as fueling the decline in tax payments by corporations.”

Business the big winner in California budget plan
By Evan Halper The Los Angeles Times February 14, 2009
“The average California’s taxes would shoot up five different ways in the state budget blueprint that lawmakers hope to vote on this weekend. But the bipartisan plan for wiping out the state’s giant deficit isn’t so bad for large corporations, many of which would receive a permanent windfall.
“About $1 billion in corporate tax breaks – directed mostly at multi-state and multinational companies – is tucked into the proposal.”

Two Americas, Two Tax Codes
By Dorothy Brown The New York Times March 8, 2009
“WARREN BUFFETT knows there’s something very unfair about the American tax system. He’s often complained that while his 2006 tax rate (for federal income taxes and Social Security withholding) on $46 million of income was 17.7 percent, his secretary’s combined tax rate was 30 percent.
“There are effectively two tax systems in America: one for the very rich and one for the rest of us. Income from stock dividends and capital gains, which makes up a disproportionate amount of the earnings of the very rich, is taxed at 15 percent. But the bulk of what the rest of us earn — wages and interest from savings accounts — is taxed at up to 35 percent.”

Business Tax Shelters a Drain on States’ Finances, Study Says
By David Cay Johnston The New York Times, July 16, 2003
“Tax sheltering has cost states more than a third of their revenue from taxes on corporate profits, a new study showed yesterday, adding to the severe strain on state finances across the country.
“The states lost as much as $12.4 billion because of tax sheltering in the 2001 fiscal year, the Multistate Tax Commission, an organization of taxing authorities in 45 states, reported. Its low estimate was $8.3 billion.”

Warren Buffet, on “The Billionaire Next Door,” aired on CNBC April 12, 2009:
“The IRS just came out with something the other day that the 400 top Americans in 2006 in terms of their taxable income paid at a rate of 17 point something percent which was the lowest since they ever started the figures and they had 29 percent about 12 or 13 years earlier.”

Tax Salvos
The New York Times Editorial May 4, 2009

“There is something wrong with a system where some of the largest and most profitable companies contribute a pittance to the Treasury. And President Obama was right to call attention to the problem when he proposed corporate tax increases on Monday. The administration noted that in 2004, the latest year for which data were available, American multinational corporations paid about $16 billion on $700 billion in foreign earnings, an effective tax rate of about 2.3 percent.”

Now what? Close state’s largest tax loophole
Phil Ting, San Francisco Chronicle
Thursday, May 21, 2009

“After yet another devastating year of funding cuts and a budget crisis that has taken California to the brink of financial insolvency, now is the time to make fundamental reforms to California’s budget and taxation system. Too many politicians have been unwilling to tackle the underlying problems of California’s budget process, instead offering patchwork solutions and stopgap measures. Tuesday’s failure of the statewide budget propositions illustrates that our elected officials need to go back to the drawing board.

“In my role as assessor-recorder of San Francisco, it’s my job to assess the fairest property taxes possible for the residents and businesses of San Francisco. Nobody knows better than a tax assessor that a key part of why California continues to fall behind is Proposition 13.

“I have a proposal to reform Prop. 13, the 1978 ballot initiative that capped the state’s property tax rate. My proposal for a split roll system would eliminate corporate tax loopholes and continue to protect California homeowners. California cannot continue to mortgage its future to protect a law that has resulted in near-constant budget shortfalls, deep cuts to vital services and corporate tax loopholes.”

March 5 rally attracts broad coalition

February 23, 2009

United Federation of Teachers website

“A new alliance of community groups, advocates, non-profit organizations and labor unions has formed to push for fair alternatives to the devastating budget cuts currently being considered in Albany and here in New York City. Those proposed cuts – to education, healthcare, social services and more – will have a disastrous impact on neighborhoods and communities around the five boroughs that are already reeling from the economic downturn.

“The broad coalition announced on Feb. 23 a major “Rally for New York” on Thursday March 5 at 4 p.m. at City Hall to protest the proposed cuts and to call for shared sacrifice from the state’s wealthiest taxpayers.

Led by a diverse group of partners including the UFT, the One New York Coalition which represents over 200 local agencies and nonprofit organizations, the Working Families Party, Citizen Action, the Central Labor Council, ACORN, the Alliance for Quality Education, DC37, 1199SEIU, the NYS AFL-CIO, NYSUT and CWA, the group’s goal is to protect vital services and programs that so many New Yorkers depend on during these difficult economic times.

The new coalition is specifically urging the Legislature and the Governor to support the Fair Share Tax Reform Act of 2009, which would generate an estimated $6 billion a year in additional state revenues through a small tax increase for the wealthiest 3.5% of New Yorkers. Along with the infusion of federal stimulus funding and administrative savings at all levels, those new revenues would be a better alternative than cuts to fundamental services. The group will also be working to ensure that the federal stimulus money is used efficiently and effectively.“

In our battle to win quality, accessible, public higher education, a crucial, strategic component of the struggle must be to raise the demand to tax the rich and tax the corporations. Both have seen their taxes drop precipitously in the past several decades, and both can afford to pay more, as evidenced by the following statistics:

“Tax sheltering has cost states more than a third of their revenue from taxes on corporate profits, a new study showed yesterday, adding to the severe strain on state finances across the country.” (The New York Times, July 16, 2003)

“There is something wrong with a system where some of the largest and most profitable companies contribute a pittance to the TreasuryŠ The [Obama] administration noted that in 2004, the latest year for which data were available, American multinational corporations paid about $16 billion on $700 billion in foreign earnings, an effective tax rate of about 2.3 percent.” (Editorial, The New York Times, May 4, 2009)

“There are effectively two tax systems in America: one for the very rich and one for the rest of us. Income from stock dividends and capital gains, which makes up a disproportionate amount of the earnings of the very rich, is taxed at 15 percent. But the bulk of what the rest of us earn — wages and interest from savings accounts — is taxed at up to 35 percent.” (The New York Times, March 8, 2009)

Already, the labor movement has begun to embrace the demand for progressive taxation. The San Francisco Labor Council, for example, passed a resolution (September 28, 2009) that included the observation that “this transfer of wealth upwards, and the robbing of the public and public employees, calls for dramatic and multi-faceted political and social responses.” The resolution concluded, among other things: “Therefore be it Resolved that the San Francisco Labor Council, as a high priority, actively participate in building a broad based movement for (1) fair and progressive taxation in California, (2) majority rule and the end to the 2/3 vote requirement for taxes and (3) adequate funding for public services.”

If we do not increase state revenues, then we will fight among ourselves for the crumbs. The University of California system (UC) will compete with the California State University system (CSU), and both will compete with the Community Colleges (CC) for state funds. Higher public education in general will then compete with K-12 for adequate funding. Finally, public education will compete with state social services for funds.
There can be little doubt that if we are divided, we will be defeated one by one.
However, by insisting that the rich and the corporations pay their fair share in taxes, we can join with one another, create an alliance among students, faculty and staff at UC, CSU, CC and K-12, and struggle shoulder to shoulder to ensure that all the necessary funding be provided to preserve and expand all public educational institutions and social services.

In unity there is strength. We have the potential to build a powerful coalition, starting with public higher education, that can reach out to other state workers and their unions in order to win the support of the majority of people in California and alter state budgetary decisions in our favor.

In the short term, however, we demand that any reserve funds, whether in the UC system or in any of the other sectors of public education, be immediately released in order to fund jobs and programs. We also call on the Obama administration to bail out public education and social services — not Wall Street and the corporations — and fund education and social services, not war.

Such a coalition must be democratically run — otherwise it will fail to attract people — and aimed at staging massive demonstrations and strikes that leave no doubt that we represent the majority of people in this state. Then, we will be in a much stronger position to demand that the state of California operate in the interests of the majority of its citizens by taxing the rich, NOT working people, and thereby fund the entire public educational system and all social services. Together, we can win!

Plumbers Hall, 1621 Market Street, San Francisco

• Dennis Kelly, Chair & President of UESF

• Betty Olson-Jones, President of the Oakland Education Association

• Fred Glass, CFT Communications Director

We urge you to invite your members and colleagues to this event to learn about
how we can stop the way we are nickel & dimed at every turn with fees and fines
while everything gets more expensive. We look forward to a lively discussion
where participants can express their views about our system and how it should be
different.

Fraternally,
Tim Paulson, Executive Director
Mike Casey, President
Larry Mazzola, VP of Affiliate Support
Conny Ford, VP of Political Affairs
Howard Wallace, VP of Community Affairs
OPEIU3 AFL-CIO 11