Legislative Analyst Says We Need More Revenue

Increasing revenue from taxes is the only way (0.00 / 0)

and it's not gonna be popular with any politician this year especially. Also repealing the corporate provisions (read gimme's) from Prop 13 is the most logical and stable source of revenue.

Oh well, this old tax accountant believes in flat taxes as well...or just repealing the corporate loopholes for the rich.

We'll see...then can we recall Arnie?

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by: sallycat @ Tue Jan 15, 2008 at 00:24:15 AM UTC

Those are the key solutions, it seems (0.00 / 0)

Ending commercial property's Prop 13-like protections, and repealing various corporate loopholes and tax credits.

Not so much a fan of the flat tax, but, those other two seem like they'd get traction.

In 2006 the California Tax Reform Association proposed a comprehensive list of solutions that they claim would raise upwards of $17 billion in revenue. What is your take on those ideas?

You can check out any time you like but you can never leave

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by: Robert Cruickshank @ Tue Jan 15, 2008 at 00:30:59 AM UTC

[ Parent ]

Nice list of solutions but some are uncomfortable (0.00 / 0)

for me ~ strictly from a progressive perspective.

1. Loophole-Ridden and Irrational Non-Residential Property Tax:  this actually looks like a good long term stablizing solution. Property taxes are consistent and one of the issues in CA is the lack of stability in revenue projections based on income taxes.

2. The State's Narrow Sales and Use Tax Base: the Board of Equalization and others are pretty agressive about going after services / labor and calling them subject to sales tax. Also as a general rule Sales Tax is a regressive tax and impacts those with the least amount of disposable income the hardest.
~ I'd like to see a Value Added Tax for luxury items instead.

3. The Tax System's Failure to Capture Pollution and Natural Resource Depletion Costs: I'd need to read more of the proposals here. It sounds like a good deal on the surface but the State of CA already has some pretty steep excise taxes in this category.

4. Weaknesses in Personal Income Tax Base and Rate Structure: my favorite topic particularly when it comes to deductions and tax rates for the wealthy. In our house we call it "alms for the well paid"!  I'd like to see some of the tax loopholes closed that are available to the wealthy (and yes I'm voting against my economic short term interests). I'd also like to see the tax rates reduced at the lower income levels and increased at the higher levels.

Interesting in that while CA has "percentage rates" that are pretty consistent with the national state tax rates, the taxes paid are incrementally lower. I've done tax returns for clients in other states that have lower 'percentages' and yet the net impact was that the taxes were twice what they would have paid in CA. The states included UT and PA.

5. Erosion of Corporate Tax Base: the erosion of the corporate tax base has to do more with real estate values in CA versus AZ or NV. This isn't going to change and cutting corporate tax loopholes will had to the exodus. BUT that being said, I don't think that their is a viable way to stop the erosion of the tax base without adding to the give-a-ways to corporations. I'd rather see good companies, paying fair wages and benefits to employees, and a smaller corporate tax base.

Anyway....that's my take...in a thumbnail version!

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by: sallycat @ Tue Jan 15, 2008 at 16:56:52 PM UTC

[ Parent ]

Great post (0.00 / 0)

Good to see the LAO saying it loud and clear - we have a revenue problem, not a spending problem. The issue is indeed structural and it's time we pursued structural fixes. 30 years is long enough.

You can check out any time you like but you can never leave

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by: Robert Cruickshank @ Tue Jan 15, 2008 at 00:31:59 AM UTC

Spending Problems in California (0.00 / 0)

The California State Budget has many SPENDING problems within it.  And why is that people keep ignoring that we have 33% more revenue already than 10 years ago and California has the highest combined state tax rate of nearly all 50 states?

One example is the California Prison System - We spend $46,000 to house each prisoner.  Florida does it for only $18,000 each the Federal Penetentiary System does it for $26,000 each.  

Furthermore nearly 40% of those prisoners are illegal aliens - aren't we suppose to get some sort of credit from the Federal government to house their prisoners?

And why is it that California provides free services and education to non-citizens who don't pay taxes, but I have to pay huge taxes to enjoy those same benefits?

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by: maintour @ Tue Jan 15, 2008 at 01:09:22 AM UTC

Is this VF? (0.00 / 0)

Sigh... the reason it costs so much to house prisoners in California is precisely because of massive overcrowding caused by continual "tough-on-crime" extensions of sentencing laws, most of which come from the right side of the aisle.  Overcrowding causes the need for more guards and more overtime.  If you're going to use statistical nonsense, at least figure out who to blame for the problem.

You're also about 30 points off on the percentage of undocumented immigrants in the state penitentiary system, but you probably got your stats from an email forward so I guess yours are more credible.

(Further, California does not have the highest combined tax rate.  It's within a 1/2% of the national average.)

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by: David Dayen @ Tue Jan 15, 2008 at 01:28:26 AM UTC

[ Parent ]

Mmmm... (0.00 / 0)

There's a stack of talking points sitting around waiting for anti-gummint folks to pick them up.  Pity so many of them are wrong.

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by: jsw @ Tue Jan 15, 2008 at 02:09:08 AM UTC

[ Parent ]

But It's Higher, Dude (0.00 / 0)

(Further, California does not have the highest combined tax rate.  It's within a 1/2% of the national average.)

because of the awesome waves!

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by: Paul Rosenberg @ Tue Jan 15, 2008 at 03:15:23 AM UTC

[ Parent ]

Do you know where I can finf that Cal tax rate stat? (0.00 / 0)

I'd love to have that reference. Good ammo.

The penalty that good men pay for not being interested in politics is to be governed by men worse than themselves - Plato, philosopher (427-347 BCE)

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by: gary_kephart @ Tue Jan 15, 2008 at 16:18:50 PM UTC

[ Parent ]

Here (0.00 / 0)

warning, it's a PDF.

link

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by: David Dayen @ Tue Jan 15, 2008 at 18:27:26 PM UTC

[ Parent ]