Issues Heat Up In California’s Gubernatorial Race

Democratic gubernatorial candidate Jerry Brown today called on rival Meg Whitman to justify her plan to eliminate the capital gains tax, which he said would increase the state budget deficit and cut education funding by billions of dollars.

As he did during Tuesday’s debate, Brown also challenged the former CEO of eBay to tell voters how much money she would personally gain from eliminating tax.

“At a time when school districts are laying off teachers and cutting art programs, the last thing we need is a bigger hole in the state budget,” Brown said.

He said cutting the capital gains tax would add at least $5.3 billion to the state’s budget deficit and cut $2.2 billion from education.

“This is a tax cut that will mostly benefit the very wealthiest people in our state, namely millionaires and billionaires like Meg Whitman,” he said. “She should be straight with the people and tell us how much she stands to gain from her tax cut plan and how much our schools, teachers and students stand to lose.”

Whitman representative Andrea Jones Rivera did not answer Brown’s question, instead saying his accusations were not surprising, since “his real plan is to raise taxes.”

“No one should be surprised that the same Jerry Brown who supported a $16 billion tax increase in 2009 during a painful recession is against tax cuts,” Rivera said in a statement.

“He’ll do anything to fight against tax relief for retirees, job creators and middle-class investors, even if it means making up ridiculous and unbelievable accusations that Meg Whitman is running for governor to enrich herself,” she said.

During Tuesday’s debate, Whitman conceded that as a stock investor, she would profit from cutting the tax, but added that “job creators” would also benefit from the tax cut.

Brown rebutted that there was no guarantee that businesses that profited from the tax would use the money to create jobs.

He also defended his own tax record, saying that when he was governor, state taxes were cut by $4 billion.

A capital gains tax is a tax charged on profits from the sale of assets that were purchased at a lower price, such as stocks or property.

Capital gains taxes are estimated to have raised $5.3 billion in revenue for the state this fiscal year, with more than 80 percent coming from the wealthiest 1 percent of Californians — those making more than $500,000 per year, Brown said.

Since February 2009, Whitman has contributed more than $141.5 million to her campaign for governor.

Assuming those contributions were all capital gains, Whitman would pay at least $14.9 million in capital gains taxes to the state of California, while if the tax were eliminated, Whitman would save at least that much and probably more, Brown said.

“This is a tax cut that benefits only a handful of Californians, but puts thousands of kids and schools at risk,” Brown said.

“Dozens of economists have looked at her plan and said it costs too much, and adds too much to our debt,” he said. “At the very least, she should tell voters how much she stands to gain, so they can decide for themselves if it is worth what the rest of us lose.”

Rivera, however, countered that “the only candidate in this race who has traded on politics to enrich himself is Jerry Brown.”

She added that “the real reason he won’t make his tax returns public from the time he left the Governor’s Office is because he was making a fortune from his political contacts.”