Sanity from California: The “Meathead Tax” Trounced
Proposition 82, the “Meathead Tax,” so named because of its champion, Rob Reiner, who played “Meathead” in “All in the Family” back in the 1970s, got trounced at the polls 61-39.
The tax, as described by the San Jose Mercury News in its article on the loss, “would have taxed the state’s wealthiest residents to provide a free year of preschool to every 4-year-old. The tax-the-rich initiative, which had the support of Hollywood activists and labor unions, seemed a sure winner when it qualified for the ballot in January.”
Specifically, as discussed at this previous BizzyBlog post, it would have added a 1.7-percentage-point income-tax surcharge on taxable income over $400,000.
The initiative’s failure is a big break for the state and therefore, since California is such a big part of the national economy, the whole country. If 82 had passed, we would have seen the “voting with their feet” phenomenon of rich people leaving the state for more hospitable tax climates accelerate. It also has to be seen as shoring up California Governor Arnold Schwarzenegger’s position. The state is running a huge fiscal surplus in the neighborhood of $7 billion; if 82 had passed, that trend would probably have begun to go in the opposite direction, and pretty quickly.
By the way, you can tell when a measure favored by the press fails badly — they don’t tell you the margin of loss, or they take their sweet time updating for the detail, as is the case with the Merc piece noted above.
I am so glad to live in Ohio and not have to deal with the Hollyweird-o’s who think they are political geniuses!
Comment by Anna — June 7, 2006 @ 12:08 pm
#1, I’ll grant you that, and don’t want to understate its importance, but this afternoon I’ll have a sobering post about how OH is faring economically compared to other states. Sneak preview: not well.
Comment by TBlumer — June 7, 2006 @ 12:15 pm
Right, you have Republican governors who believe that rare coins are a sound investment for the state pension fund…
Comment by Kevin Irwin — June 7, 2006 @ 3:54 pm
#3, Ouch, that is a partial explanation of the mindset that produces a 1% GSP growth and an ethically challenged pack of liars.
BTW, a very big factor in some of the red state GSPs is population growth. Per capita numbers would be much more meaningful, which I’m sure we’ll get eventually.
Comment by TBlumer — June 7, 2006 @ 5:36 pm
…and states that are seeing a growing population are those with the cheap land that I have been speaking about.
It’s the “Wal-mart-ization” of the US. No matter how useless or dumpy it is, as long as it is cheap and there’s lots of it, someone will buy it.
Comment by Kevin Irwin — June 7, 2006 @ 5:47 pm
#5 — and make it better over time (crossing fingers).
Comment by TBlumer — June 7, 2006 @ 5:52 pm