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Millionaire 'Munger Sandwich' Squeezes California Governor

Attorney and civil rights advocate Molly Munger
AP
Attorney and civil rights advocate Molly Munger

California Governor Jerry Brown defeated one billionaire to get elected. But defeating two millionaires in his current fight for a tax hike may be beyond him.

The latest polls shows that Gov. Brown's Nov. 6 ballot measure, known as Proposition 30, is on the ropes. The initiative would raise $6 billion from taxes on high earners and from higher sales taxes, with the proceeds going to bolster state finances, pay down California's daunting public debt, and fund police and schools.

But Brown's measure is getting attacked from both sides by two members of the Munger family – as in Charles Munger, Warren Buffett's legendary partner.

Munger's daughter Molly Munger, a civil-rights lawyer, has spend more than $30 million to defeat Proposition 30 in favor of her own ballot measure, Proposition 38. Proposition 38 would raise $10 billion through income-tax hikes, largely on high earners.

Ms. Munger says Proposition 30 won't do enough for schools. She adds that the governor's warnings that he'll have to cut billions from education if it fails are simply threats. (Read more: CEO to Workers: You'll Likely Be Fired If Obama Wins )

But while Molly Munger is attacking Brown from the left, her half brother, Charles Munger Jr., is attacking Brown from the right. Charles, a Stanford physicist and chairman of the Santa Clara Republican Party, has spent $20 million to push Proposition 32, which would restrict organized labor's ability to raise campaign money.

But some of Charles's $20 million has also helped fund efforts to oppose the governor's proposition. Molly said she didn't know her half-brother would be opposing Brown. She said she thought his money was going to back Prop 32, not to oppose Prop 30.

The governor, meanwhile, is worried that the so-called "Munger Sandwich" is killing voter support. Polls show support for Prop 30 has dipped below 50 percent, after polling in the high 50s a few weeks ago.

"With the Munger family, we're getting both barrels, " Brown told the Sacramento Bee.

The Munger family clearly has right to fund whatever policies they want. And Jerry Brown's ballot measure might not be popular with voters, regardless of the Munger's money. What's more, the Mungers show how money from the super-rich is funding both sides of the partisan divide. (Read more: UK Rich Will Pay 'Fair Share' )

But one family pouring more than $50 million to defeat the governor's proposal will only add to the media chorus saying that the rich are distorting democracy. Whether it's the Super PACs in support of the presidential candidates or the Munger Sandwich in California, money doesn't just talk in politics – it screams.

-By CNBC's Robert Frank
Follow Robert Frank on Twitter:
@robtfrank

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