Shame on me for voting for a retroactive tax in Prop 30

"When our politicians do something like this to us, it makes me want to become more conservative, and just never vote "yes" to anything that could have -- and in this case, did have-- hidden gotchas no matter how principled the ideal might be."<p>It sounds like you're looking for reasons to become more conservative.<p>It has been quite clear to all residents that the state of California has been in trouble for a couple of years now. Teachers being let go en masse, school districts seeing cuts in state funds, and state services from campsites to the DMV being cut.<p>The text of the Prop. 30 tax increase was originally finalized in March 2012, was sponsored by the Governor, and received a big push from him. The original text of what became Prop. 30 was developed by the Governor in 2011 (<a href="http://ag.ca.gov/cms_attachments/initiatives/pdfs/i1035_11-0090.pdf" rel="nofollow">http://ag.ca.gov/cms_attachments/initiatives/pdfs/i1035_11-0...</a>).<p>If you're significantly affected by this increase in marginal tax rates (an extra 1% for individuals over $250K/couples over $500K, up to 3% for individuals over $500K/couples over $1M), you should be aware of these issues, or be paying someone who is.

Almost everything I heard about Prop 30 mentioned that it would affect all income earned in 2012. It's hinted out in the summary that the OP posted and spelled out more concretely just below that overview:<p>"Increases Personal Income Tax Rates From 2012 Through 2018."<p>(from <a href="http://voterguide.sos.ca.gov/propositions/30/analysis.htm" rel="nofollow">http://voterguide.sos.ca.gov/propositions/30/analysis.htm</a>).<p>While it is unfortunate that some feel mislead, the impact is quite small in 'real' terms. The married filing jointly bracket up to 500k will see a 1% increase in state income tax, up to $600k will see 2%, and above a million will see 3% incremental.<p>If you sold your company and got a million dollar check, you'd see something like $10k in additional taxes (which is then partially offset by claiming them on your federal tax forms). Price of doing business in a high-tax state I suppose.

It appears that the author is upset that his post-liquidity tax planning has been up-ended by prop 30.<p>His argument only applies to entrepreneurs who have had an exit in 2012, and little to no income before that. This is a pretty narrow group.<p>As an entrepreneur who moved back to California recently - the poor school systems of California were more of a deterrent to living here to me, rather than tax burden. Prop 30 addresses that.<p>The referring article by Ethan Anderson [1] tries to extend this group of entrepreneurs to early employees of Facebook for example. However, most early employees do get paychecks and didn't have to "sacrifice" any more than employees at non-pre-IPO companies.<p>[1] <a href="http://allthingsd.com/20121204/what-proposition-30-means-for-californias-entrepreneurs/" rel="nofollow">http://allthingsd.com/20121204/what-proposition-30-means-for...</a>

People are so cute when they threaten to leave California because their taxes are a little bit higher.<p>He is likely taking advantage of the long term capitals gain tax already, reducing his taxes from 35% or so to 17% or so.

Wisconsin faced a similarly grim[0] fiscal situation three years ago - high public union labor costs and years of structural deficits plus the recession resulted in a deficit of over 20% of the budget.<p>It was ugly and underhanded, but as many will remember the Governor successfully pushed through very unpopular[1] public union and budget reforms. It sucked, but it worked. We're now firmly in the black[2].<p>There are probably negative consequences that we'll learn about at some point, but at least the state resisted the urge to just raise taxes and not deal with its largest problem. California could learn a thing or two.<p>[0] <a href="http://www.jsonline.com/news/milwaukee/69771807.html" rel="nofollow">http://www.jsonline.com/news/milwaukee/69771807.html</a><p>[1] <a href="http://en.wikipedia.org/wiki/2011_Wisconsin_protests" rel="nofollow">http://en.wikipedia.org/wiki/2011_Wisconsin_protests</a><p>[2] <a href="http://www.jsonline.com/news/statepolitics/state-to-release-projections-that-will-be-framework-for-twoyear-budget-fm7nihk-180173611.html" rel="nofollow">http://www.jsonline.com/news/statepolitics/state-to-release-...</a>

TL;DR: "I voted in favor of taxes on people making more than $250,000 per year because I thought it wouldn't include me."

I can see now why one would assume differently, but it has always kind of been my assumption that if a change to the tax code was approved before the end of the tax fiscal year, that the changes would possibly affect my taxes for that tax year. After all I always received tax breaks in the same year that they were approved.

We're very bad at managing money. The only solution is to give us more money, while we hold your children's education hostage.

Being a proposition, does the legislature have any responsibility involved in the unfairness of this retroactive tax? Isn't the responsibility of a proposition in the hands of the voters, thus making it really important for voters to do their research? The blog post should be laying the blame on us voters.

I didn't realize this was a retroactive tax either, but does that really change anything? I mean, if you made a bunch of money in 2012, would you have decided to <i>not</i> earn that money simply because of a slightly higher tax burden? I keep hearing this argument that entrepreneurs would decide not to do such-and-such action that makes money if the taxes on that money were raised, but that's never made sense to me. I mean, they still <i>make money</i>. They make slightly less with the taxes raised, but that slightly less is still a vast improvement over the near-zero interest rate on just letting your money sit in a savings account.

It sounds to me like this person didn't read the proposition before voting yes on it. I voted 'NO' for the proposition because it was going to be retroactive and because after discussions over the proposition with my friends, I decided that these additional taxes would only have negative effects on the Californian middle class. ($250k is middle class in California!)<p>There is no excuse for being lazy. Sorry to be so harsh, but yes, shame on you.

This idea of retroactive taxes may have legs. Rich people can often reconfigure their future earnings in response to upcoming changes. But they can't change past income – or even better, <i>income from years whose returns have already been filed</i>. Perhaps the revenue-hungry states will discover that the only tax increase that can't be skillfully avoided is one on already-admitted income, say from 2009. Or to pick a real bumper year for California tax revenues, 1999.

Yes, CA has a reputation for poor public schools and for large class sizes. And yes, CA now has the highest, or among the highest both personal income tax and sale tax. Where does all this money go? Are other states able to do more with less?

I really don't see Prop 30 as the entrepreneurship killer its critics make it out to be.<p>Why does nobody point out that in the event of an exit, an entrepreneur has control over the timing of their income? Sure, I suppose some subset of people who sold an inordinate amount of stock in 2012 now have to pay more, but how much more? Doing the math, it seems this tax likely increases ones tax bill by roughly 5%.<p>If you believe a 5% decrease in take-home proceeds from successful outcomes will stop entrepreneurship, I've got some swampland in Florida to sell you.

Because your site won't take a guest comment, I'll leave it here:<p>"Smaller amounts of additional revenue would be available in 2011-12" should have been a clue that something hinky was going on.<p>This is why you always read the full text of a bill, not just the summary prepared by someone with an agenda that you may or may not be aware of, and may or may not be in agreement with.

The real error is voting on any proposition on the California ballot, full stop.