The big public sector unions of California and Oregon had their courage examined recently — both were found lacking. The unions backed down from a challenge from their respective Democratic governors, before any fight could be waged. The issue at stake was whether to tax the rich of both states to offset the state deficits caused by the Great Recession, itself caused by the rich.
In both cases labor unions had readymade tax-the-rich ballot measures they were preparing to wage campaigns for: in California the Millionaires Tax and in Oregon a similar measure without the flashy nickname. In both cases the Democratic governors asked the unions to back off and choose a “less controversial” path. The unions succumbed.
In California’s case the unions agreed to a rotten compromise, which taxes the rich at a lower rate while including an increase in the state sales tax that disproportionally affects working and poor people — unacceptable given the dire economic circumstances that have pushed many working people into poverty.
In Oregon’s case the unions agreed not to tax the rich and pursue instead the elimination of the “corporate kicker,” a reference to the refund that corporations get from the state if their revenue exceeds state economist expectations. Yet even if the refund is eliminated, it’s possible that — given the sour economy — zero revenue will be raised.
Revenue is desperately needed. Across the country states and cities are slashing services, cutting jobs and attacking unions because politicians claim “there is no money.” That is a lie. There is plenty of money in the United States, though it has accumulated at the very top; the richest 1% continue to take the lion’s share of the national income, just as they did before the Great Recession.