A proposed initiative in California would raise taxes on multi-million dollar homes and commercial properties for the next 20 years to fund anti-poverty programs in the state.
Charity groups are working to gather more than 585,000 petition signatures by March 21 to get the measure on the November ballot.
The Lifting Children and Families Out of Poverty Act seeks to establish an additional surcharge on most properties assessed at above $3 million starting in 2017.
Owners would see property taxes bumped up on a sliding scale based on assessed values:
0.3 percent on the portion between $3 million and $5 million
0.6 percent on the portion between $5 million and $10 million
0.8 percent on the portion above $10 million
The revenue would be deposited into a special fund for several public assistance programs, including an expansion of government-subsidized child care, an earned income tax credit, and grants for job training programs
Supporters say the measure could help reduce poverty in the state by 50% over the next 20 years. They add that it would not simply aide the poor, but would boost all Californians by reducing the money needed for welfare programs and prisons.
Opponents counter by saying there are already 30 programs in place to deal with poverty and many suffer from fraud and abuse. They see the measure as a direct attack on Proposition 13's property tax protections.
Another major issue is fact that this is a tax rate adjustment, which is being treated like a direct assessment. Unlike regular tax assessments, it can’t be challenged once it is law. Therefore it will have a cumulative negative effect on property assessments.
The proposal's net impact on the economy is unclear according to research by the state's nonpartisan Legislative Analyst's Office. Large businesses would see an immediate increase in property taxes and the revenue would fund programs aimed at moving families off welfare. However, analysts say the investment would take many years to fully realize.