[Marxism] The Unions, the Millionaires Tax, and the Road to Success

Adam Richmond adambrichmond at yahoo.com
Wed Mar 21 13:23:46 MDT 2012

Hi, Here's an interesting article about the sudden death of the Millionaire's Tax in California. 

The Unions, the Millionaires Tax, and the Road to Success
By Ann Robertson and Bill

This winter the California Federation of Teachers (CFT) sent tremors of hope
through its ranks by announcing it was going to spearhead an attempt to place
an initiative on the California ballot — appropriately called the “Millionaires
Tax” — that would raise taxes only on millionaires (3 percent on those making
more than $1 million; 5 percent on those making more than $2 million).

The initiative carefully specifies that the money it raises — if it gets on
the ballot — will go to public education on all levels (36 percent for K-12 and
24 percent for colleges and universities), social services for children and
seniors (25 percent), public safety (10 percent) and infrastructure (5
percent). To qualify for the ballot, somewhere in the order of 800,000 petition
signatures are required.

According to the San Francisco Chronicle, it “typically costs between $1
million and $3 million to hire a signature-gathering firm.” (March 17, 2012)
Consequently, CFT was hopeful that other unions would join the campaign so that
the expenses could be shared. But that did not happen. The California Nurses
Association endorsed the Millionaires Tax but failed to allocate money for
signature-gathering. Few other unions endorsed

Even worse, the California Teachers Association (CTA), a National Education
Association affiliate and the largest teacher union in the state, ran a hit
piece on the Millionaires Tax initiative in an email blast to its members that
included lies and deceptive half-truths. It claimed, for example, that the
Millionaires Tax included as a provision — and it pretended to quote directly
from the initiative — that “none of the funds can be used to support programs
primarily funded by the state.” This was a blatant lie that CTA later admitted
was inaccurate. Moreover, the CTA email claimed that the initiative did not
close the current budget deficit, although the initiative never pretended to do
this. And it claimed falsely that the initiative would not restore program cuts
to essential services.

Why were so many unions either passive or hostile towards the initiative?
The answer lies with the arm-twisting tactics of Democratic Governor Jerry
Brown, who is promoting a counter initiative and does not want any competing
tax initiatives on the ballot, particularly the Millionaires Tax that has
consistently polled much higher than his own proposal. He has put intense
pressure on union leaders to stay away from the Millionaires Tax. His own
measure would increase taxes on people who make more than $250,000 by a mere 1
percent and those making over $500,000 by 2 percent. But he also included a
regressive sales tax of one-half cent on the dollar in his measure, and the
entire tax package includes an expiration date of 2016. The money it would
generate has not been earmarked for any specific purposes.

Since Brown’s initiative raises taxes on both rich and poor, he has argued
that it is a “balanced program,” or, as most people describe it, “shared
sacrifice.” Not surprisingly, this argument overlooks the fact that during the
past three decades the incomes of the wealthiest 1 percent of Californians grew
by 81 percent while the income of the bottom 20 percent dropped by 11.5 percent
(San Francisco Chronicle, April 1, 2011). A “balanced” program would require
that taxes on the wealthiest 1 percent be raised 81 percent while the taxes of
the bottom 20 percent be cut 11.5 percent.

Why did Brown devise a tax revenue proposal that would fail to significantly
curb these socially destructive trends in inequality? We got a glimpse into the
answer when CFT publicly responded to CTA’s unconscionable attack on the
Millionaires Tax. CFT wrote:

“The same day that the CTA leadership issued its flier, the California
Business Roundtable, representing PG& E, Chevron and other large
corporations, came out in opposition to the Millionaires Tax. It stopped short
of endorsing Governor Brown’s proposal, however. The reason? According to the
Sacramento Bee (March 9), “Roundtable spokesman Kirk Clark said the business
group was waiting to see whether Brown would come through with pension
reductions as well as changing environmental laws and business regulations to
make it easier for firms to operate in California.” 

The CTA leadership has now aligned itself with the most reactionary forces
in California in opposition to the Millionaires Tax. CTA leaders are standing
together with the 1%’s business lobby, which is actively working to undermine
the hard-earned pension benefits of CTA’s own members, and seeking the destruction
of public employee pensions as a quid pro quo for their endorsement of the
governor’s tax.

In other words, Governor Brown tried to attract business support for his tax
proposal by including a regressive sales tax. But the 1 percent wanted more:
while firmly rejecting the Millionaires Tax, the 1 percent demanded that Brown
agree to reduce public worker pensions before they would support his
initiative. Under intense pressure from Brown, CTA and other unions such as
SEIU, agreed to reject the Millionaires Tax and endorse Brown’s proposal,
testifying to the inordinate power the 1 percent wields. The 99 percent, of
course, are the losers. Poll after poll reported they overwhelmingly support
the Millionaires Tax while offering only tenuous support to Brown’s proposal.

Buoyed by its polling, teachers and other supporters of the Millionaires Tax
have been out gathering signatures with the hope that its success would reverse
some of the crippling cuts to public education and social services. But just
this week they suffered a stunning blow: CFT announced that it dropped its
support for the initiative. In exchange, the union has endorsed a new
“compromise” tax proposal brokered with Governor Brown.

The “compromise” includes the following provisions: the increase in sales
tax – one-half a cent in Brown’s original proposal – has been reduced to
one-quarter cent, and even this would expire after 4 years. Those individuals
making over $250,000 would be taxed an additional 1 percent, over $300,000 an
additional 2 percent, and over $500,000 an additional 3 percent. The money it
would raise would go into the general fund, meaning it could be used for
anything. And the entire package expires after seven years.

In defense of this abrupt about-face, Josh Pechthalt, CFT President, argued
at an Occupation Education Northern California meeting (March 17, 2012) that
CFT alone did not have the money to get the Millionaires Tax on the ballot. He
pointed out that of the 300,000 signatures already gathered, only 10,000 were
acquired by volunteers; paid signature gatherers got the rest. He further
argued that this new “compromise” initiative was essentially progressive, since
8/9 of the revenue it would generate would come from raising taxes on the rich.

But, as one person at the meeting pointed out, many supporters of the
Millionaires Tax are not simply focused on the money to save their own
position; they are intent on creating a movement. And people will hardly want
to join a movement led by teachers who pursue raising money for schools with a
sales tax that includes in its scope taking money from the poorest people in
the state. Teachers do not inspire when they support self-serving proposals
that divide rather than unite working people. Moreover, the argument that the
“compromise” proposal is progressive since it takes more from the rich than the
poor fails to take into consideration the surrounding context where
inequalities in wealth have been soaring. Although the measure might take a
higher percentage from the rich than the poor, the rich have so much money to
spare they won’t feel the bite. The poor already don’t have enough money, and
this will leave them with even less.

Despite Pechthalt’s pleas, those assembled at this meeting voted to reject
the concept of shared sacrifice, reject regressive taxes, and reject the ploy
of the “compromise.” They bravely plan to soldier on in their support of the
Millionaires Tax.

One cannot help but wonder what CFT’s top leadership was thinking. While it
has agreed to stop promoting the Millionaires Tax, Governor Brown is still
actively trying to get his original regressive tax initiative on the ballot.
And with only a month left to gather signatures for the new “compromise”
proposal, the prospects of getting enough signatures are slim. In all
likelihood, the new measure will fail to get on the ballot while Brown’s
original proposal might well succeed, leaving CFT completely empty-handed,
since it has now dropped the Millionaires Tax.

Why, after resisting Brown’s unrelenting pressure, did the CFT leadership
capitulate? Why did it switch camps in order to stand with the 1 percent when
it had previously condemned CTA for doing just that? In essence, it tried to
pursue a radical policy by taking conservative steps, so its efforts were
doomed to failure at the outset.

Today, unions are notoriously top-down (and that is why there is an
uncomfortable and unstable alliance between the unions and Occupy). Top union
officials, for example, make it a studied practice to keep their members in the
dark about their political maneuvering. They give huge sums of money to
politicians — mostly Democrats — without providing the rank and file a full
accounting, let alone a balance sheet on how the politicians performed after
receiving the money. If no one knows what union officials are doing, there can
be no objections.

CFT leaders proceeded along similar top-down lines in pursuing the
Millionaires Tax. They did not try to create a real grassroots movement. They
could have collected email addresses of all the volunteers who participated in
the signature-gathering campaign so that everyone could be kept informed on a
regular basis about how the campaign was progressing. Using email blasts, CFT
leaders could have inspired their volunteers by providing them with frequent
encouraging reports. The leaders could have provided a means for volunteers to
communicate among themselves about successful approaches to attracting
signatures. CFT leaders could have created regional organizing centers so that
efforts could have been better coordinated. And union leaders could have
provided its volunteers with an in-depth analysis of why the top leaders of
other unions were avoiding the Millionaires Tax. In this way CFT could have
thrown a spotlight on the influence and power of the 1 percent and provided
volunteers with possibly their first serious political education. Had all these
tactics been employed, many more signatures could have been gathered.

Instead, CFT officials basically let the volunteers struggle on their own.
Symbolically, when the CFT leadership decided to drop its support of the
Millionaires Tax, the volunteers only found out by reading newspaper reports.
And according to one CFT local president, top CFT leaders did not even consult
with their local leadership, resulting in his blistering attack: “Locally, your
AFT Guild leadership is sickened to learn of this back room deal.”

To make matters worse, when trying to justify his decision at the Occupy
Education meeting, CFT President Josh Pechthalt admitted that from the very
beginning he was trying to broker a deal with Governor Jerry Brown, giving the
audience he was addressing — who had been vigorously promoting the Millionaires
Tax — the impression they were simply pawns in a game that was playing out
behind their backs: their efforts in support of the Millionaires Tax were
really bargaining chips to be used to pressure Jerry Brown to adopt a slightly
more progressive alternative to his original tax proposal.

It should go without saying that massively mobilizing union members to fight
for their own interests runs dead against the current union policy of trying to
win modest demands by supporting Democrats, who receive most of their campaign
contributions from the 1 percent. But the accelerating growth in the
inequalities in wealth during the past three decades highlights how disastrous
the strategy of depending on the Democrats has been. Operating in this
framework, unions are forced to accept only what is deemed permissible by the 1
percent. That has consistently meant lower wages and reduced pensions. And
union officials’ defense of this approach as the only realistic alternative
merely creates a self-fulfilling prophecy: as long as the membership is not
inspired and mobilized, of course they do not represent another option to the
reliance on Democrats.

Students, teachers, and social service workers in the Occupy Education
movement are not wavering in their commitment to the Millionaires Tax. They
have already succeeded in mobilizing thousands on March 1 and 5 in support of
this measure. They are courageously shining a light on the way forward for the
labor movement. It is only a matter of time that organized labor itself will
have to follow their lead.


More information about the Marxism mailing list