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Did health care 'tax' just blow up California's careful budget plans?

California Governor Jerry Brown's plans to raise state taxes on the wealthy could be derailed because of voter concern about President Obama's plan to boost taxes on the wealthy and the Supreme Court's labeling the health care reform law a tax.

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“I actually think this does [jeopardize Brown’s November tax initiative],” says Tony Quinn, co-editor of the California Target Book, a nonpartisan guide that tracks state political races.  “Brown’s allies in the legislature saw to it that his tax measure comes first on the ballot measure ballot plus the Obamacare tax, and now Obama’s hit on the rich making more than $250,000 a year. $250,000 may be rich in some states but in high-cost California it is upper middle class. “

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Anyone in politics developing messages about all these campaigns is going to have to be very careful and crafty, say other analysts.

“Obama was doing all he could to not call his health-care penalty a tax, so whoever is trying to sell these ideas is going to have to work very hard to recast their messages,” says Barbara O’Connor, director emeritus of the Institute for Study of Politics and Media at California State University, Sacramento.

“This is particularly onerous right now in California because so much of the budget is dependent on voters coming through with about $8 billion.”

Also vying for voter attention in November is a competing plan which would raise income taxes for nearly all Californians, with most of the money going to public schools.

A recent Field Poll found 54 percent of respondents in favor of Brown's tax measure and 38 percent opposed. Voters were evenly split at 46 percent on the other initiative.

Mr. McCuan says Brown's tax measure will require support and backing of unions who will be otherwise engaged.

“Unions will be preoccupied with a battle against them over paycheck protection and possibly any pension battles that result,” says McCuan. “Wrap this all up, and Brown is going to have to raise a ton of money while seeking support and not threatening voters that California will fall into the sea if his ballot measure is unsuccessful.  That's a tough job for anyone.”

Mr. Pitney says there is another reason Californians will be balking. The state legislature last week officially green lighted the state’s $100 billion, high-speed-rail project, despite the objections of two blue-ribbon investigating commissions, an independent state analyst calling it too expensive, and several polls saying the public is strongly against it.

Noting that California voters just rejected a much narrower tobacco tax in June, Pitney says Brown’s political maneuvering space has shrunk because of all the tax talk.

“The passage of the high-speed rail project which Brown vociferously fought for and won over all the objections will go down in retrospect as the biggest mistake of his administration,” says Pitney. “He has the environment of all these tax increases as partly to blame.”


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