Brown For Governor Campaign
LOS ANGELES - Labeling it "an unconscionable attack on our schools" Jerry Brown today called on billionaire Meg Whitman to justify her plan to eliminate the capital gains tax - a giveaway that would add at least $5.3 billion to the state's deficit and result in up to $2.2 billion in cuts from California's classrooms. Brown also called on Whitman to tell voters how much she personally stands to gain from the elimination of the capital gains tax.
"At a time when school districts are laying-off teachers and cutting art programs, the last thing we need is a bigger hole in the state budget," said Brown. "This is a tax cut that will mostly benefit the very wealthiest people in our state, namely millionaires and billionaires like Meg Whitman. She should be straight with the people and tell us how much she stands to gain from her tax cut plan and how much our schools, teachers and students stand to lose."
Capital gains taxes are estimated to be $5.3 billion in revenue for the state this fiscal year, with more than 80% coming from the wealthiest 1% of Californians - those making more than $500,000 per year.
Since February 2009, Whitman has contributed more than $141.5 million to her campaign for governor. Assuming those contributions were all capital gains, Whitman will pay at least $14.9 million in capital gains taxes to the State of California. Were she to be successful in eliminating the capital gains tax, Whitman would save at least that much and probably more.
"This is a tax cut that benefits only a handful of Californians, but puts thousands of kids and schools at risk," Brown said. "Dozens of economists have looked at her plan and said it costs too much, and adds too much to our debt. At the very least, she should tell voters how much she stands to gain, so they can decide for themselves if it is worth what the rest of us lose."
Earlier this year, the Associated Press quoted economist Henning Bohn saying Whitman's tax cut would "rip a hole in the budget" that would have to be made up with either more cuts or tax increases elsewhere. With nearly half the state's budget committed to public education, almost half of the cuts required to close the Whitman gap are likely to come from schools. Eliminating the capital gains tax is the equivalent of firing nearly 33,000 California teachers.