Via the Los Angeles Times / AP. Summary in our own words, [read the original here].
The story: Proposition 40 would make the roughly 200 Californians worth over $1 billion at the start of the year pay a one-time 5% tax. Its sponsor, a healthcare workers’ union, projects $100 billion over five years, with 90% going to healthcare. The nonpartisan Legislative Analyst’s Office estimates tens of billions, well short of that figure. Opponents and business interests put more than $316 million into defeating it, and two countermeasures, Props 41 and 42, would cancel it if either gets more votes. Prop 40 was trailing as counting continued, and AP had not called the race at its latest update. Gov. Newsom opposes it, saying a California-only tax would push wealthy residents to move, and he supports a national billionaire tax instead. Proposition 40 +6
Dr. Teddy Okafor-Whitlock: (squints at the paper over his mug) Good morning, flock. Today’s front page has a wealth tax, a pile of ad money, and two ballot measures designed to cancel the first one. It’s a ballot measure with a trap door. Penelope, you’ve been holding a clipboard since sunrise. Go ahead.
Penelope the Penguin: (adjusts her tiny hard hat) Thank you, Professor. Let me start with the problem this tax was built to solve: big federal cuts to healthcare funding are coming, and clinics and emergency rooms are the ones who’ll feel it. The 200 people who’d pay this tax are some of the richest on the planet, and it’s a one-time 5%, paid in installments. A colony survives by sharing the cold, and I think a state can ask the people who gained the most to carry a little of the load. And I’ll add that supporters’ own analysis says the wealth of billionaires who oppose it has grown enormously in under two years, so “rounding error” is the phrase I’d use.
Magnus the Magpie: (polishes his monocle) Penelope, I admire the passion, and I’m told “rounding error” is a very shiny phrase, but let’s count what’s really on the table. The tax is one-time. The federal cuts are permanent. So we’d be paying a permanent bill with a single payment, and then the question is what happens in year two. There’s also the risk that the people with the most mobile money simply move, which shrinks the tax base for everyone, including the clinics. I have nothing against a tax on the rich if it works. I have a great deal against a tax that makes the rich leave.
Penelope: Magnus, you say “move” like billionaires are carrying their yachts on their backs.
Magnus: Penelope, they have yachts. Moving is the one thing they’re good at.
Dr. Teddy: All right, take a breath, both of you. Let’s drop the yachts and ask what the measure actually does. Ptolemy, put on your footnote voice.
Professor Ptolemy the Owl: (sets down a very large stack of papers) With pleasure, Teddy. Three points. First, the numbers: the union’s projection is much higher than the Legislative Analyst’s estimate of “tens of billions,” so be careful with the bigger figure. Second, the ballot design: Props 41 and 42 were placed there by opponents specifically so that, if either gets more votes than Prop 40, it cancels it. That means even a “yes” majority isn’t the end of the story. Third, the residency question. Whether billionaires actually leave depends on messy tax rules, and both sides cite studies that point in different directions. In short: nobody knows exactly what this would do, and that includes me, which is a sentence I say about once a year.
Gus the Pigeon: (through a mouthful of fry) Three hundred million dollars in ads, Ptolemy. For a tax on two hundred people. If I had that kind of money I’d also want to make a fuss.
Poe the Raven: I’d like to register my usual joy. (slow blink) I find it rich, so to speak, that this is a fight between a union that wants the state to take money and billionaires who want the state to stop. Both sides want the government on their team. My worry is the fine print: opponents argue the measure would let the Legislature amend it without a new vote, which means a “one-time billionaire tax” could grow into something else. I’ll note that “temporary” is the most expensive word in politics.
Penelope: Poe, you’re agreeing with Magnus.
Poe: I’m agreeing with the fine print. Magnus can keep the monocle.
Gus: I don’t care who’s right, honestly. I care whether the clinic on my block is open when my cousin needs it. Both sides are shouting about billionaires, and neither one’s telling me which clinic stays open.
Dr. Teddy: Gus, that’s the most useful sentence anyone’s said all morning, and I say that with love for the rest of you. Let’s pull this back to what we can agree on. Healthcare funding is a real worry. The disagreement is over how to pay for it and whether this tool works. Does anyone think the answer is “do nothing”?
Magnus: Certainly not. I’d just prefer a plan with more than one payment.
Penelope: (grudgingly) I’d prefer a plan with more than one payment too. I just don’t want to wait for it.
Sterling the Bald Eagle, who had been keeping very quiet, said he preferred to keep the flag out of tax law this morning. He was seen nodding at Magnus, then at Gus, then at his coffee. Teddy chose not to ask.
Pickles the Parrot: (brightly) “Poison pill! Poison pill!”
Dr. Teddy: Pickles, that’s the ballot, not the coffee. Though I understand why you’d confuse them.
Dr. Teddy’s Wrap-Up
Dr. Teddy: (sets down the mug) All right, flock, here’s where we landed. On the money, supporters say a one-time tax on about 200 billionaires could help replace federal healthcare cuts, while the state’s own analyst expects less than the sponsor’s figure. On the risk, opponents warn that wealthy residents could leave and that the measure could be changed later without a new vote. On the process, the countermeasures mean a “yes” on Prop 40 might not be the last word, and as of the latest update, the race hadn’t been called.
Where you disagreed was whether a one-time tax on the very rich is fair and workable. Where you agreed was that healthcare funding is a real problem and that the public deserves a plan with specifics. Gus reminded us that the question behind all this is whether the clinic stays open.
What to watch: the final count and the AP call, how Props 41 and 42 finish, and whether anyone brings a longer-term healthcare funding plan to the table.
And no, Penelope, I’m still not telling you how I voted. Magnus, put the monocle down.
Pickles: “Monocle!”
Dr. Teddy: (sighs) Class dismissed.
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