Support for Proposition 30 is fading, and for good reason

The tide may have turned on Proposition 30. A Berkeley IGS poll released last week now has support dropping below 50% after polling at 55% a few weeks ago. While the opposition to the measure is much less, at 37%, the gap has narrowed significantly. Two factors might explain this drop. First, as voters begin to comprehend what it does, they are less likely to support it. Second, voters may be persuaded by the breadth and diversity of the opposition.

Proposition 30 would increase the state income tax by an additional 1.75% on income above $2 million for individuals. Since only a handful of California citizens make that much, the proponents calculated that this would be attractive to progressives as an easy way to stick it to the rich. (It is also consistent with that old adage, “don’t tax you, don’t tax me, tax the fellow behind the tree.”)

Adding to the “class warfare” feature of Prop. 30 are the equally progressive purposes for which the funds would be spent. Revenue from the tax would fund various programs ostensibly for the purpose of addressing climate change.

From the perspective of taxpayers, Proposition 30 is just bad policy. In addition to having the highest state sales tax and gas tax in the nation, no other state even comes close to California’s 13.3% top marginal income tax. Prop. 30 would pump that up to over 15%.

At some point, even those who can scarcely dream about making $2 million annually can figure out that something is wrong with California’s tax structure. Indeed, a PPIC poll in April found that “record-high shares of Californians think that . . . the state and local tax system is not fair.” They may also be aware of the frequent media reports on the number of citizens, including high wealth individuals, moving out of state.

More specifically, over the last 10 years, California lost more than 1.625 million citizens—more than the population of Philly. Even the San Francisco Chronicle featured a headline that read “Richer people left San Francisco in the pandemic. And they took billions of dollars with them.” According to data from the Internal Revenue Service, the coronavirus pandemic triggered a “wealth migration” which saw high-tax states like New York and California lose high-income earners to low-tax locales such as Texas, Florida, and Arizona.

Another strike against Prop. 30 might be that its populist trappings are belied by the fact that the majority of funding is coming from one major corporation, Lyft. That ride sharing company has provided the bulk of funding for the measure at $15,000,000.

In addition to the negative policy considerations, a larger force that might be responsible for declining support is the depth and breadth of the opposition. Proving that politics makes for strange bedfellows, Prop. 30 is opposed by groups as diverse as the California Teachers Association and the Howard Jarvis Taxpayers Association.

And few things shocked the proponents of Prop. 30 more than the strong opposition from Governor Gavin Newsom. Indeed, his weighing in may ultimately prove to be the deciding factor.

One can speculate until the cows come home why he dislikes the measure. After all, it certainly qualifies as a “green” proposal. But Newsom receives strong political and financial support from the state’s powerful teachers union, which views the right to raise taxes as their exclusive domain. Or it could be that his very wealthy friends in San Francisco quietly suggested to him that a top marginal rate of 13.3% was high enough, especially when they could move to Austin, Seattle, or Miami and pay nothing.

Finally, Newsom’s opposition to Prop. 30 may have something to do with his “sub-zero” interest in running for president; an assertion, by the way, that no one actually believes. If he hopes to have a chance of appealing to voters beyond crazy California, support of a massive tax hike isn’t a great strategy.

Jon Coupal is president of the Howard Jarvis Taxpayers Association.