There is an old saying that everything that sounds good is not necessarily good for you. This is something we should remember as we consider Proposition 40 on the November ballot.
At first glance, the idea of making billionaires pay more taxes sounds like something most of us could support. After all, working families are struggling with the rising cost of food, housing, utilities and health care while some of the wealthiest people in this state continue to accumulate more wealth than most of us will ever see.
But the question before us is not whether billionaires should pay their fair share. They should. The real question is whether Proposition 40 is the right way to accomplish that goal without creating additional problems for the very people we are trying to help.
This is not about protecting billionaires. It is about protecting the services our communities cannot afford to lose.
Let’s look at what this measure actually does.
Proposition 40 would impose a one-time 5 percent tax on the wealth of California billionaires. Ninety percent of the revenue would be directed toward health care, with the remaining funds going toward education and food assistance.
On the surface, this sounds like a good idea. Certainly, we need more money for health care. We know that African Americans and other communities of color continue to experience serious health disparities. We also know that many of our seniors, children and working families depend on Medi-Cal and other publicly funded health services.
But health care is not the only service our communities depend upon.
What about our public schools? What about the community colleges preparing our young people for employment? What about public safety, housing assistance, services for seniors and the many other programs that depend upon California’s General Fund?
These are not separate issues. They are connected to the quality of life in our communities.
California’s nonpartisan Legislative Analyst’s Office has written that Proposition 40 could result in an ongoing reduction in state income tax revenue if some billionaires change their financial arrangements or leave California. That potential loss could be less than $1 billion annually.
We should understand that this is a possibility, not a certainty. The same analysis estimates that the tax could generate tens of billions of dollars over several years. But that revenue would be temporary and largely restricted to specific purposes, while any reduction in General Fund revenue could continue.
This is where we must ask some serious questions.
What happens when money that supports our schools, public safety and other essential services becomes less available? Who will be asked to make up the difference? Will it be the people who can least afford another reduction in services?
We have seen too many situations in which public policy was presented as a solution to one problem without sufficient attention to the consequences for others.
For African Americans, these questions are particularly important because we often have fewer financial resources to absorb the loss of public services.
This is not an argument for protecting billionaires from taxation. It is an argument for protecting our communities from unintended consequences.
We can demand that the wealthy pay their fair share while also demanding a tax policy that protects the stability of our state budget and the programs upon which millions depend.
We should not allow the emotional appeal of taxing billionaires to replace a careful examination of what Proposition 40 could mean for the rest of us.
As voters, we have a responsibility to read beyond the slogans and ask who benefits, who might be harmed and what happens after the money is spent.
For these reasons, I am voting No on Proposition 40.
The issue is not whether billionaires should pay more. The issue is whether the rest of us can afford the risk.
