Calif. Billionaires Fight for $10B Tax Hike

(Newser) – A group of California billionaires is joining political insiders to put a $10 billion tax hike measure on the state ballot. Members of the Think Long Committee include billionaire Google chairman Eric Schmidt and philanthropist Eli Broad, as well as former governors Gray Davis and Arnold Schwarzenegger, and Condoleezza Rice. The group's plan is to boost tax revenue for education and to pay down the state's debt by relying on an "ideological hybrid" of ideas from both the right and the left, spokesman Nathan Gardels tells the San Francisco Chronicle. The proposal would lower California's personal income tax and sales tax rates, but impose a 5% tax on currently untaxed services such as legal work and accounting. Under the proposal, couples earning up to $45,000 would pay no state income tax; those earning up to $95,000 would pay 2%; and those earning more would pay 7.5%, with a 1% surcharge for Californians earning more than $1 million.

The corporate tax rate would be cut from 8.84% to 7%. Committee founder Nicolas Berggruen has said he'll commit $20 million of his own funds to pass the measure, reports the Los Angeles Times. "The problem with most initiatives is funding," said Gardels. "That's not a problem this group will have." Labor unions are preparing their own proposal, which would hike income taxes on high earners, and boost the state sales tax to help plug the $13 billion state budget deficit.