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Tax the rich ... more? Why Jerry Brown changed his plan to save California.

California Gov. Jerry Brown wants voters to back his ballot initiative to raise taxes. But this week he changed it to fend off a teacher's union that could have ruined his plans. 

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Lucy Nicholson/REUTERS
California Gov. Jerry Brown speaks in Long Beach, Calif., Wednesday.

California Gov. Jerry Brown (D) is willing to ratchet up taxes on the rich in order to ensure that his top political priority 鈥 a ballot initiative to help pare back California鈥檚 $9.2 billion deficit 鈥 has a better chance of passing this fall.

The move is a nod to political reality. The California Federation of Teachers (CFT) was planning to put its own tax measures on the ballot to compete with Governor Brown鈥檚, and voters typically vote 鈥渘o鈥 when confused by multiple initiatives on the same topic. So in a deal with the union this week, Brown agreed to amend his plan, making it tougher on California鈥檚 wealthiest residents.

Brown鈥檚 willingness to change his plan is evidence of how deeply the initiative process has reshaped the political landscape in California. With the Republican minority refusing to play ball in the Legislature, the ballot was Brown鈥檚 last resort for his tax plan 鈥 and with the teacher鈥檚 union threatening to play spoiler, Brown had little choice but to compromise, experts say.

鈥淭he initiative system shifts a lot of power from elected officials to those who can mount initiative campaigns,鈥 says Jack Pitney, a political scientist at聽Claremont McKenna College, via e-mail. 鈥淏rown didn't have much leverage over the union.聽The union had a great deal of leverage over Brown.鈥

Brown unveiled his original initiative in December, asking voters to approve a half-cent increase in the sales tax and income-tax hikes for the rich 鈥 1 percentage point for earners over $250,000 and 2 points for single earners over $500,000. He told voters that the initiative was crucial to help solve California鈥檚 chronic fiscal crises.

To fend off the CFT, however, Brown now says that he is lowering the sales tax hike to a quarter cent and increasing his tax hike on the wealthy 鈥 to 2 percentage points on single earners over $300,000 and 3 points for those over $500,000. The tax increases on the rich would also last for seven years, not five, as was the case in the original plan.

鈥淭his united effort makes victory more likely and will go a long way toward balancing our budget and protecting our schools, universities, and public safety,鈥 Brown said in a statement.

Democrats across the country could try to copy the idea.

鈥淏rown鈥檚 agreement with the CFT constitutes an approach that is seductive for many Democratic politicians,鈥 says Steven Schier, a political scientist at聽Carleton聽College聽in Northfield, Minn. 鈥淏y raising taxes on the highest incomes, the state gets additional 鈥 but highly unstable 鈥 source of revenue without stressing the middle and working classes.鈥

But he questions whether Brown鈥檚 initiative will be enough. 鈥淐alifornia鈥檚 budget problems are so severe that it鈥檚 just a matter of time before state government must again, with higher taxes, tap its largest, most stable revenue source: middle-class citizens.鈥

Others agree that taxing the rich might not yield what Brown wants.聽

鈥淓specially at the high income level, people who work in聽California聽can establish residency in a low-tax state,鈥澛爏ays聽Peter Zaleski, a professor at the Villanova School of Business in Philadelphia, in an e-mail.聽鈥淚f聽higher tax rates on high-income earners聽was the solution to a budget deficit, then between聽Hollywood聽and Silicon Valley,聽California would not be in the red.鈥 [Editor's note: Mr. Zaleski's name was misspelled in the original version of this paragraph.]

Getting CFT鈥檚 measure of the ballot will help clear the field for Brown鈥檚 initiative, experts agree. But Brown risks kindling a rich-voter revolt.

鈥淕overnor Brown's deal makes it much more likely there will only be one or two tax proposals on the fall ballot, says Michael Shires, professor of public policy at聽Pepperdine聽University, via e-mail. 聽But 鈥渢he expansion of the upper brackets in his proposal may well motivate those affected to fight it even harder.鈥 聽

Republicans criticized the 鈥渃losed-door deal.鈥

鈥淧ublic opinion polls have already shown that the more voters know about the Governor鈥檚 tax hikes, the less they like them,鈥 said Assembly Republican Leader Connie Conway in a statement. 鈥淚 believe voters will see through this new sham of a proposal.鈥

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