It sounds like you're looking for reasons to become more conservative.
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.
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 (http://ag.ca.gov/cms_attachments/initiatives/pdfs/i1035_11-0...).
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.
But to your point, the first substantive link off the official Prop. 30 summary page (http://voterguide.sos.ca.gov/propositions/30/analysis.htm) makes clear in several places that the increases will take effect starting Jan. 1, 2012. ("Because the rate increase would apply as of January 1, 2012, affected taxpayers likely would have to make larger payments in the coming months to account for the full-year effect of the rate increase.")
If the OP was worried about taxes, he should feel lucky that 38 failed ;-).
I definitely agree with this (-:
You're right, in that a reasonably informed voter should have known the nature of the proposition. Unfortunately, due to the broken initiative process, those weighing the options tend not to be sufficiently informed. In my opinion (though not that of the US Supreme Court, see Calder v Bull), such ex-post-facto tax laws should be as prohibited as similar laws are in criminal circumstances.
"Increases Personal Income Tax Rates From 2012 Through 2018."
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.
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.
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.
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.
The referring article by Ethan Anderson  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.
High taxes, big deficits, and bad public services - California state government achieves the trifecta of suck.
If incumbency is rampant, that's a structural problem with your redistricting process, not the unions.
If BigCo Inc is allowed to spend a ton of money in elections, why can't the unions?
Depends on your definitions.
"entrepreneurs who have had an exit in 2012, and little to no income before that" -- Pretty narrow.
"People expecting fair treatment from their fellow citizens" -- Not narrow at all.
Retroactive law of any kind sucks. As the point of law is to provide rules to guide conduct, "retroactive law" is something of a semantic nullity -- it cannot possibly guide behavior because its guidance is not knowable as people behave. It is little more than than infliction of a legislature on some population, under the color but not the substance of law.
Your freedom and property depend on our general refusal to apply such law to you, no matter how much we may want to. Absent that general refusal, you depend on your absence from sets any set of people from which we might want to apply such law.
If you are confident that you will be the same as everyone else on all important dimensions, you should be safe without that general refusal. If you've any ambition to be different in any important way, maybe you should consider your interests more broadly.
Pretty sure that if our Washington politicos can't reach a deal by 12/31, whatever tax law IS set in 2013 will apply to the entire calendar year. As that will likely mean a significant tax decrease from the current law (under which the “temporary” Bush tax cuts expire), you won't find many people sympathizing with your complaint.
Now if you want some sympathy, go with the fact that our state legislature refused to fund essential services, services that the populace wants and needs, due to a minority that blocked balanced budgets again and again. Which led to (a) Prop 30, and (b) the electorate cutting the Republican nihilists off at the knees.
Now that we have a respite, let's get the amendment process going so that we no longer need the 2/3 vote in the legislature to pay for what a clear majority of citizens want.
And if the people whose incomes have benefitted the most from doing business here would rather set up their entrepreneurial shops in Mississippi or some state that has lower educational commitments (but low taxes!), they just proved that they weren't smart enough to have actually earned that high income, anyway, and just got lucky. Let 'em go. Better yet, encourage them to move to Texas and secede so that they won't have to worry about all the immigrants here, too.
More seriously, there is a distinction between civil and criminal ex post facto laws (civil, including taxes: generally OK if there is a rational basis; criminal: essentially never due to Article 1 of the US Constitution).
For more, see
He is likely taking advantage of the long term capitals gain tax already, reducing his taxes from 35% or so to 17% or so.
It was ugly and underhanded, but as many will remember the Governor successfully pushed through very unpopular public union and budget reforms. It sucked, but it worked. We're now firmly in the black.
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.
TL;DR: "I voted in favor of taxes on people making more than $250,000 per year because I thought it wouldn't apply retroactively to decisions made in the past."
This is obviously not the first or last time this type of measure will be passed ;).
Why do you think all those CEO's are so nice to accept a $1 yearly salary and take stock instead?
So, in the end the guy still gets enough money to make him happy and tax revenue goes down.
The other popular option is to just move, which some countries in Europe are now experiencing.
I mean, the 'more money' argument certainly applies once you've crossed the bubble threshold, but if you're making $251,000, if the additional tax is only 1%, that translates to $2,510, which takes your gross to under the $249,999 you could have made and been exempted from the increased tax.
For the self-employed, who have more control over their direct income, it might be more beneficial to take a slight pay cut and come home with more until you're able to give yourself a significant enough raise for it to not matter.
Edit: I've been corrected by others who are more savvy on taxes than myself. I admittedly am not in the >250k tax bracket, but regardless, there is a contingent of people who are also wrong, and are working their taxes in the way I described.
First, marginal tax rates are taxed on marginal income, not gross income. The $250K bracket only kicks in for dollars earned over $250K.
Second... there are, in fact, points on the income ladder with a marginal rate that is greater than 100%. But they're not a problem for the rich. They're a problem for the poor. At certain points, the removal of things like food stamps and tax credits can result in a marginal tax rate of greater than 100%, which is to say, you are literally better off making less gross income, because you will have more spending power.
Thank you for your understanding.
There is no excuse for being lazy. Sorry to be so harsh, but yes, shame on you.
You might think this is true, but you're wrong.
But as you say, I would imagine for most of California this isn't an issue.
The extra 1% tax kicked in at $250K for individuals, $500K for couples filing jointly.
That's very well-off anywhere in CA. Median household income in SF County is $73K, and SF County is quite rich compared to the state median of $61K.
Scary thought though, considering being able to assign a retroactive tax in such a way. Doing a retroactive tax that reaches back to the beginning of the current year is one thing, reaching back to previous years after taxes filed and paid are another.
Additionally, we pay out more than we get back from the nation-state. I don't have the exact numbers off-hand, but it's something like 75/100 per dollar or maybe even less now.
California receives back less than $1.00 in federal spending for every dollar its citizens pay in taxes, while the smaller states receive back in federal spending significantly more than $1.00 for every dollar their citizens pay in federal taxes. In effect, California's largesse subsidizes the rest of the nation. If California received back in federal spending its fair share of the federal taxes its citizens paid, it would have a multi-billion dollar surplus each year.
But, isn't that the system that so many in the "blue" states advocate? Taxing money from those that have it to distribute it to those who do not? Consider that most "red" states don't have the state resources, for various reasons, that the others have. It would seem the citizens of the "blue" states would be proud of such a Federal system that is so similar to what they wish to do within their own system.
California gets back $.78 for every dollar in federal tax that its citizens pay.
I was actually surprised that Michigan was on the 'under' side of the list but there were few other surprises.
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%.
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.
"Smaller amounts of additional revenue would be available in 2011-12" should have been a clue that something hinky was going on.
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.
I would vote on the initiatives that set the ground rules for governance -- things like redistricting. But the idea that modifying the state constitution as cheaply and easily as it can be modified would lead to better government, well … no.