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Did health care 'tax' just blow up California's careful budget plans?

California Governor Jerry Brown's plans to raise state taxes on the wealthy could be derailed because of voter concern about President Obama's plan to boost taxes on the wealthy and the Supreme Court's labeling the health care reform law a tax.

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Californians may be choking on the “t” word.

As a result, California Governor Jerry Brown’s November tax initiative – upon which his just-signed state budget depends – is more iffy than ever, say a host of analysts.

President Obama said Monday he wants higher taxes for the rich. California's small business owners also are worried about the financial hit they will take from the mandate of providing health-care insurance for their employees. Obama's Affordable Care Act is now, thanks to the Supreme Court, officially being called a "tax.”

Governor Brown's plan would raise the state sales tax and the income tax for individuals with incomes over $250,000 a year, with the money going to the state budget, schools, and public safety. His tax initiative would raise an estimated $8.5 billion in this fiscal year.

If the initiative fails, Brown's budget plan has a trigger to automatically cut $4.8 billion from education. Political scientist Dan Schnur told Bloomberg News that this trigger was "the most expensive ransom note in California political history."  But Brown denies that he is trying to strong arm voters.

“The stars seem to be aligning against the passage of Brown’s November tax initiative,” says Jack Pitney, professor of government at Claremont McKenna College.


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