Platform on the Economy
California is a dynamic and diverse global economic power. However, despite possessing one of the largest GDP in the world, Californians suffer from a high rate of poverty and income inequality that lowers the quality of life across all areas of society. Our economy must evolve in a way that ensures our continued global prominence while also creating a better standard of living for all Californians. Our people, government representatives, and policies must recognize and appreciate the size, scope, and importance of our economy before it can truly serve our people and reflect our values. If we continue to think of California’s economy as merely a subset of the economy of the United States, we will be unable to solve the complex problems that we face.
Many of California’s economic woes stem from our unfair treatment by the United States federal government and we will work immediately to get a fair deal. Currently, we receive far less from the federal government than we contribute in taxes each year. California’s taxpayers can no longer be expected to subsidize other states and reckless federal spending while our own needs go unmet. Trade wars, instigated by business interests 3,000 miles away, harm both farmers in the Central Valley and technology companies in Silicon Valley alike. Ultimately, the California National Party (CNP) believes that independence is necessary for California to effectively confront our economic problems with real solutions. Until then, we are working to assure that California’s prosperity improves the lives of all our citizens.
Taxation and Universal Basic Income
The CNP supports a simplified tax code, with a taxation system that combines negative income tax for the most economically vulnerable; a progressive tax on wages, investments, and inheritances above a certain baseline, with a top marginal rate of 50%; a tax on net wealth in excess of $50 million to encourage investment instead of over-accumulation; a 22% corporate tax rate; and monthly universal basic income (UBI) payments to all California citizens beginning at the age of eighteen or upon legal emancipation.
Under the UBI system proposed, all Californians would receive a monthly amount regardless of income level. In addition to this, we also propose a negative income tax, under which those Californians with an annual income below $40,000 will receive a guaranteed tax return. Together, these two approaches can replace the current inefficient and complicated social welfare system, reducing unnecessary bureaucracy, and saving millions of dollars annually. It may also remove the need for a minimum wage.
Wages up to $40,000 a year will be untaxed, while those earning below that threshold would receive half the difference between $40,000 and their annual income from wages, which can be summarized by the formula ($40,000 – x)÷2. For example, a person earning $24,000 a year would receive a refund of $8,000 (half of $40,000 – $24,000), one earning $14,000 would receive $13,000, and a Californian without income would receive $20,000. Such refunds would be divided into twelve monthly payments or 80% of the total refund as a single payment. Only wages in excess of $40,000 would be taxed, e.g. from an earned income from wages of $75,000, $35,000 would be taxed.
When combined with monthly UBI disbursements of $500, all individuals with California residency as defined in our Immigration plank would have an annual guaranteed minimum income of $26,000 and an untaxed income from wages and UBI of $46,000. This would ensure that food, housing, and other basic needs are accessible to all Californians. The general increase in the quality of life and the resulting decline in crime, homelessness, and other consequences of poverty will bring benefits to all Californians. Tax refunds and UBI disbursements would be deposited into each citizen’s account in the California public bank as outlined below.
While California remains under the federal tax and welfare system, we propose the immediate enacting of UBI, a tax on inheritances in excess of $1 million, and a tax on net wealth above $50 million, as well as negotiations with the United States to alter our taxation relationship with the federal government, as laid out in the “Securing Autonomy” section of our Autonomy and Independence plank.
California Public Bank
The CNP supports the creation of a state-owned Bank of the California Republic. Such a public bank would provide an alternative to high-interest payday loans and check-cashing businesses that charge fees for basic services and are primarily used by people with fewer financial resources. It would also provide access to banking services for industries that are legal in California but remain illegal or over-regulated in the United States.
- All California residents would automatically have an account with the California public bank, with the tax refunds and UBI payments described above directly deposited into these accounts.
- In addition to holding California’s reserves of gold and other precious metals, this bank would manage the Innovation and Equity Funds described below and provide loans and financial services to new, community-based California businesses.
- At least one branch will be located in each county which, along with secure electronic banking access, will ensure that all Californians have access to low-cost banking services in their local communities.
- This bank will be subject to independent audits every 5 years.
California Innovation Fund
The CNP advocates for the creation of an Office of Innovation to administer an Innovation Fund that will provide funding for scientific research and technological development. California will then retain patents on technology created, license those patents to businesses that pay taxes in California at a discount in order to encourage tech companies to locate here. The profits from these patents would then be applied towards an endowment for the fund to help it grow and become self-sustaining over time. We support funding for such projects as:
- Research aimed at improving desalination and clean energy technologies that are critical for California’s long-term resource security.
- City and county developed publicly-owned broadband services, designed to be woven together in order to create a California-wide system of public broadband that should seek to be the fastest and most affordable broadband in the world, especially emphasizing increased connectivity in underserved rural areas.
- Deployment of autonomous vehicles and any required infrastructure changes, as well as thorough studies that can result in sensible regulations and legislation regarding their use.
- Investigating ways to leverage technology to make all levels of California government more responsive, efficient, and democratic.
Support Community Business
The CNP supports policies that encourage the development of businesses from within our own communities. In particular, policymaking should focus on communities that have historically suffered from policies that have too often been motivated by racial or class prejudice, resulting in unequal pay, unequal education, hiring discrimination, historical disinvestment, and capital flight. To make economic opportunity available to all Californians, the CNP will work toward the following goals:
- Encourage entrepreneurship among working-class communities, fund free public classes on how to start and run a business successfully, and offer counseling on obtaining financing, including through the public bank.
- The public bank will also make micro-credit loans available to individuals who complete courses or have equivalent experience and can produce a viable risk-assessed business plan, as well as meeting other reasonable requirements.
- Develop special economic zones and other ways of encouraging more economic growth in rural areas, if requested by the local community. These zones would provide tax incentives to encourage businesses to form in and relocate to economically disadvantaged areas of California.
- Create a California Equity Fund held by the public bank whose mandate is to provide financing, counseling, and logistical support to workers who want to buy their workplaces and turn them into worker-owned and operated cooperatives. These businesses would be owned by the employees, not the government, and the loans would be paid back with interest to cover administration costs. Such worker-owned businesses are more likely to pay living wages, are less likely to downsize, and would not export jobs.
- Work in partnership with our neighbors in Mexico, Oregon, Nevada, and Arizona to develop shared economic zones in California border towns and encourage economic development. These zones will cover 90 miles of our northern, eastern, and southern borders in order to reduce migration inflows to California and create a mutual prosperity zone to the benefit of all stakeholders.
- Implement robust tax breaks and credits for locally owned small businesses in historically disadvantaged communities, as well as the creation of a hedge and/or sovereign wealth fund specifically for reinvestment in such communities, via the publicly-owned Bank of the California Republic.
- Institution of universal single-payer healthcare, which would reduce the need for employer-provided insurance.
The nature of employment is undergoing a radical shift in the 21st century. Nowhere is this felt more strongly than in California, where many new technologies are born. Labor laws and practices must keep up with this rapidly changing world and opportunities must be provided to workers to retain their employability. The CNP believes:
- The California government must support and defend the right of workers in all industries to organize for collective bargaining, form unions, and advocate for their collective interests.
- Employers must provide their full-time, year-round workers at least three weeks of paid vacation each year.
- As technology renders whole industries obsolete, workers must have the opportunity to re-train in order to seize new opportunities. Support for mid-career retraining must include investment in adult education, existing CalWORKS programs, and community college courses, particularly STEM, to help people change careers and move into fast-growing sectors of the economy. Public-private partnerships will be created to help place graduates of these programs into the workforce.
- After enacting single-payer healthcare, UBI, and negative income tax, studies should be undertaken on the benefits, costs, and consequences of transitioning to a 7-hour workday or 35-hours work week. Such a “share the work” policy would provide more jobs with shorter hours for more Californians, reducing long term unemployment which results in skill loss and life disruption for both individuals and families.
Cannabis must remain legal for use by adults in their own homes throughout California, and this right must be recognized by every county. The Bank of the California Republic will engage in transactions with the cannabis industry as it would with any other legal and legitimate business.
However, counties and cities will retain the right to restrict or ban sales, disallow public consumption, limit or even refuse permits for commercial operations, and set local tax rates, in addition to the California tax, to fund local programs.
Like all sectors of the agriculture industry, cannabis growers, processors, and distributors must follow employment, environmental, and business law at both the California and county level. Counties can call on assistance from the California government to enforce compliance of county laws regarding such violations.
Oil Extraction Tax
Historically, California has been a major oil-producing region and the oil industry supports over 15,000 California jobs. However, a variety of factors have led to its decline in recent decades. The threat of climate change has caused California and many parts of the world to enact legislation reducing fossil fuel consumption. California’s geology is not suited to modern horizontal drill techniques which, combined with the thicker nature of our crude oil, places us at a competitive disadvantage in the modern market. It is an economic reality that the oil industry in California is declining.
However, short-term demand for petroleum both in California and abroad is likely to continue and therefore the CNP calls for an increased oil extraction tax on annual gross revenue. Such a tax would be tiered, up to a maximum of 20%, based on volume. We also support greatly increased fees on idle wells, so that they are either used or plugged. The revenue raised from this tax would be used to build a post-petroleum future for communities that have historically relied on the oil industry, through such policies as:
- Tax incentives for new businesses to form in or relocate to oil regions, diversifying local economies, especially in related industries such as biofuels and green energy.
- Adult retraining programs for those in the petroleum industry in partnership with new and relocated industries, emphasizing local hiring.
- Cleanup of communities whose health and environment have been compromised by irresponsible actors.
- Litigation against petroleum companies that have been negligent at any phase during or after extraction, as well as paying for the plugging and clean up of many abandoned sites for which the people of California will likely be forced to pay.
Reduced State Gas Tax
Transportation patterns, and the resulting consumption of fossil fuels, differ in important ways between rural and urban areas. Rural areas are more dependent on automobile use than urban areas, with less access to mass transit. Many of these areas also have a lower median income level compared to more urbanized regions. As such, the current system of a flat, California-wide gas tax is a clear form of regressive taxation that disproportionately impacts these communities. The CNP therefore proposes:
- A hard limit on the California excise tax on gasoline as a percentage of not more than 8%, immediately reducing gas costs. These funds are to be used only for transportation infrastructure, primarily for projects that span over multiple counties, are necessary transit or commercial corridors, or provide alternatives to car use.
- The California government will disperse additional funds to counties for construction and development of transportation infrastructure based on factors such as population, demonstrable need, frequency and volume of both local and transient use, etc.
- Counties and larger cities would set their own local gas sales tax to be used for local transportation infrastructure programs, with matching funds provided by the California government. Smaller counties could form regional transit agencies, pooling together funds and resources.
- County taxes would be set by each Board of Supervisors, which can be more responsive to the transportation needs of the community and directly accountable to voters. Areas with fewer transportation developments and greater automotive needs can keep their taxes low, while areas requiring, for example, greater mass transit spending, can increase their local tax to raise funds and discourage unnecessary driving.
Intellectual Property and Media
In less than a century, California has gone from newspapers, radio, and newsreels to constant real-time information via the internet. The way this information is produced, disseminated, and consumed has developed dramatically, yet many laws regarding media have remained unchanged. The CNP believes that allowing corporate conglomerates to exercise oligarchic powers over information is bad for our culture and our democracy. We therefore support:
- Limits on the number of radio and television stations that a single entity can own, with reforms in the way licensing for radio and TV stations is carried out to make it easier for people to start community radio and television stations. When all media is owned by a few corporations, minority voices are silenced and there is no freedom of the press.
- Net neutrality as a way to foster independent media and limit the control that gigantic, highly integrated corporations have over the information that makes its way into our homes and minds. Since the internet is now the primary avenue for the consumption of news and entertainment, equal access to internet bandwidth is crucial.
- Copyright reform to end indefinite extensions which favor monopolistic practices and create unnecessary barriers to entry into the market instead of spurring innovation. Artists and makers should be protected and allowed to legally profit from their creations, but over time laws have evolved to favor perpetual corporate profits at the expense of novelty.
- Create a California Arts Fund similar to the standards of the European Union to fund public arts which have significant economic and cultural benefits over the long term.
- Mandate that California radio and television stations that broadcast over publicly-owned airwaves must play at least 20% music or other locally produced content by people from their local region, in order to ensure local artists have a chance at exposure. Media consolidation has created significant barriers to entry for artists and musicians and has resulted in a much less competitive media market, ultimately harming both artists and the industry itself.
- Overhaul of patent law to encourage and reward innovation instead of erecting unnecessary barriers to entry. This includes reinstating limits on copyright, restoring the original constitutional guidelines, and eliminating copyright extensions as noted above.