Millionaires Targeted in L.A. Tax Proposal to Ease Homelessness

  • Los Angeles County seeks 0.5% levy on incomes above $1 million
  • Proposal fits trend of higher taxes on incomes of the wealthy

Los Angeles County leaders are turning to millionaires to pay for solutions to its growing homeless problem, part of a trend of state and local governments looking to raise income taxes on the highest wages.

Supervisors in the county of 10 million, the most populous in the U.S., voted 3-2 Tuesday to ask the California Legislature to permit local governments to levy their own income taxes. The county wants to put the idea to a popular vote in November. California’s statewide rate of 13.3 percent on incomes of more than $1 million already is the nation’s highest.

Los Angeles County, which is eyeing a local 0.5 percent levy on incomes greater than $1 million, joins Massachusetts and Maine in considering tax increases on the wealthy. Labor unions in California are also pushing a November statewide ballot measure to retain higher income taxes passed in 2012, while allowing sales-tax increases passed that year to expire.

Supervisor Mark Ridley-Thomas, one of the two sponsors of the motion, said it would take "heavy, heavy lifting" to alleviate the region’s homeless crisis, which he called the largest problem facing the county.

"If we don’t do it, it won’t get done," he said. "The work that we are already doing is important, but it is simply insufficient. We have to do more."

State lawmakers must pass a law allowing counties to raise income taxes and Governor Jerry Brown would have to sign it before a measure could be put before Los Angeles County voters.

The county has about 47,000 homeless people, according to the Los Angeles Homeless Services Authority, up 5.7 percent from a year earlier. The region has the largest population of people living on the streets in the country.

The county provides temporary shelter payments, assistance for those facing eviction for nonpayment of rent and caseworkers to help people transition to permanent housing from the streets.

Last year, Ridley-Thomas declared that the region was facing a "moral outrage" in its handling of homelessness, as shanties sprouted from downtown Los Angeles to the beach.

Supervisors this year earmarked $150 million for housing for the homeless, while saying hundreds of millions more would be needed to remedy the problem. The county has estimated that the millionaires tax would generate $243 million a year. More than 15,000 of Los Angeles County’s 4 million taxpayers reported 2013 incomes of more than $1 million, according to California’s Franchise Tax Board.

County officials also considered higher taxes on general sales, marijuana and property. A county-commissioned poll showed that support for higher taxes on millionaires’ incomes had the most support, 76 percent, followed by 68 percent for sales taxes, 66 percent for marijuana taxes and 47 percent for land parcels.

A new income tax would need support from two-thirds of voters.

Supervisor Michael Antonovich, who voted against the measure, said taxes are driving jobs out of California and that a new tax for homeless services may have little effect.

"It’s a very complex issue," Antonovich said. "The majority of them are those that are mentally ill and need to have mandated mental health therapy. Having another revenue source to build a house is not addressing the root cause."

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