Brown, Whitman Tangle Over Capital Gains Tax Cut
SAN FRANCISCO (AP) — Democrat Jerry Brown on Monday cast his gubernatorial rival as a billionaire opportunist who wants to enrich herself with tax breaks—a charge Meg Whitman called class warfare by the attorney general in the closing two weeks of the campaign.
At a news conference in San Francisco, Brown criticized the former chief executive of eBay for failing to disclose how much she would save under her proposal to eliminate the capital gains tax.
“This is a pretty simple deal,” said Brown, who was surrounded by Asian American lawmakers who endorsed him. “She can talk all she wants, but the truth is she wants to enrich herself and her contributors and the very wealthiest people in our society.”
The issue first arose last week at the candidates’ final debate in which Brown publicly asked Whitman to tell voters how much she would personally benefit from her tax plan. He has estimated Whitman would owe $15 million if she sold stock for the $140 million she has given her campaign.
Whitman did not answer the question, instead saying that she, like all investors, would benefit.
On Monday, Whitman said she can’t possibly determine how much stock she might sell in the future. She told reporters that no person in their right mind would spend $140 million to save $15 million.
“I mean, it just shows that Jerry Brown does not understand math. The fact that I would run for governor to enrich myself is ridiculous,” Whitman said after touring a manufacturing plant for environmentally friendly cleaning supplies in Garden Grove. “It’s a political stunt, it’s class warfare. That’s what he is trying to put forth. And it’s simply not true.”
Brown said he does not expect Whitman to predict her future stock sales but rather release her previous tax returns so voters can see what taxes she has paid in the past.
However, Brown also has refused to make his tax returns public, reiterating on Monday his claim that Whitman should do so first.
Whitman’s proposal to eliminate capital gains taxes is a key element of her plan to stimulate California’s economy, which is struggling with high unemployment and less revenue streaming into the state treasury.
Over the last decade, California has collected between $2.6 billion and $10.8 billion a year in capital gains taxes when people sold stocks, real estate investments and other assets, according to the state Franchise Tax Board.
Whitman argues that eliminating the tax would help California compete for business with Nevada and other states that have no income or capital gains taxes.
“It’s a tax on jobs, it’s a tax on job creators, it’s a tax on innovation, it’s a tax on investments,” Whitman said. “It just shows that he doesn’t understand how the economy works because he has been in the business of politics while I’ve been in the business of job creation.”
In 2008, much of the capital gains tax, about 92 percent, was paid by individuals who reported more than $200,000 in taxable income, according to the state Franchise Tax Board.
That has given Brown ammunition to say Whitman’s tax proposal would benefit the wealthy and cost the state much-needed revenue. Among Brown’s claims is that K-12 and university education would need to be cut.
“That would be a big hole in this general fund and that immediately shortchanges the university,” Brown said.
Whoever replaces Republican Gov. Arnold Schwarzenegger will have to deal with an ongoing deficit, in part because lawmakers this year closed the state’s $19 billion deficit by relying on one-time or temporary money—some of which may never materialize.
Neither Brown nor Whitman has offered detailed plans on how to balance the budget. Among her ideas, Whitman has proposed cutting 33,000 state workers and advocates for a two-year budget cycle. Brown has said he would impose a 10 to 15 percent cut to the governor’s office and cut waste from government.
Both candidates are trying to appeal to voters in the final weeks of a close race in which polls suggest about a fifth of voters remain undecided.
Whitman last week launched a bus tour around the state and said she plans to spend the next two weeks visiting retail outlets, parks, schools and businesses as she fights for “every vote in every part of California.”
Brown appeared at two high-profile events over the weekend with former President Bill Clinton but hasn’t spent much time meeting with voters. He said Monday that would change in the coming days.
“We’ll be all over the state from the north to the south to the Central Valley,” Brown said. “We have a very extensive program planned.”
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