On Election Day 2012 the voters in California voted for an increase in sales tax, and a massive increase in State Income Tax on the wealthiest in the State. The claim was that the money was needed for education, but in reality it is going to be used to help pay for rising pension costs. The unions are powerful in California, and ensured that Proposition 30 passed, and Proposition 32, which would have limited how unions fund their favorite politicians, failed.
In Britain, two-thirds of the top earners fled the country after the tax rate against them hit 50%. The resulting unintended consequence was a UK £7 billion loss in revenue. When the United Kingdom announced they would reduce that rate to 45%, 10,000 millionaires returned.
In France, when the Socialists decided to raise the tax rate to 75% on income above 1.0 million euros per year, along with a sharp increase in taxes on capital gains from the sales of stock and company stakes, the rich began to leave the country. The successful population in France argues that the progressive tax rate will kill the market for innovative start-up companies. As in Britain, the French could be seeing a massive drop in revenue.
The Founding Fathers were aware of the dangers of this kind of taxation. They were against direct taxation, and called the concept of the redistribution of wealth a "Utopian scheme of leveling." Samuel Adams went so far as to say such actions are, "Impractical, despotic, and unconstitutional" at the federal level.
Though direct taxation is constitutional at the State level, California's hike in the tax rate against the rich is also retroactive to last January, and that makes the new law unconstitutional.
Article I, Section 10 of the U.S. Constitution says that "No State shall pass any ex post facto law." Ex post facto law is retroactive law. As per Article I, Section 9, the federal government can't pass any ex post facto law, either. That makes Proposition 30, and Bill Clinton's retroactive tax in the 1990s, unconstitutional.
The new nation wanted to be nothing like the British they had won their independence from, and the monarchy played games with taxation, and ex post facto laws, to hang on to power, and tighten its grip on the people. The way the founders saw it, if congress applied laws ex post facto, people could be charged with crimes that they committed before the act itself was even illegal, and that was just not acceptable in a free country. That, in the opinions of the Founding Fathers, is tyranny, and so the Constitution is specific about no allowing ex post facto laws.
The unconstitutionality of Proposition 30 goes even deeper than that, however. In addition to the fact that retroactive law is unconstitutional, so is targeting a specific group and treating them differently under the law. Those that normally oppose the government following the original intent of the U.S. Constitution love to use the "Equal Protection Clause" in the 14th Amendment to support their talking points, but conveniently forget all about the Constitutional Requirement that all people be treated equally under the law when it comes to taxing the rich. Shouldn't taxation, like any other law, be applied equally to all citizens? Is it not un-American to single out a single group with punitive laws?
In the end, California's Proposition 30 is unconstitutional, which makes it an illegal law, and once implemented will cost California the revenue the ruling elite in Sacramento believes the new tax law will create when the wealthiest Californians leave the State, just as the richest folks did in France and Britain.
California is in for a tough economic ride, worse than she has already faced under liberal democrat leadership; and after the next census California will lose at least one representative in Congress due to the dwindling population. . . well, the State will lose that seat as long as the census-takers don't count the illegal aliens as a part of the "legal" population.
-- Political Pistachio Conservative News and Commentary
Two-Thirds of millionaires left Britain to avoid 50p tax rate - U.K. Telegraph
The "Your Money Is Not Yours" Crowd - American Thinker