Tuesday, 9 June 2009

Should California consider additional tax increases?

Yes the propositions were pummelled at the polls, but does it mean all tax increases should be off the table? Here is a story from today’s Sac Bee, and their list of some proposed tax increases.

  • Increasing the top personal income tax rate from 9.3 percent to 10 percent for incomes of more than $250,000 and 11 percent for incomes of more than $500,000.
    • Restoring state fees on motor vehicle licenses to their 2003 levels.
    • Reassessing all commercial property, thus raising property taxes on nonresidential property.
    • Increasing corporate income tax rates.
    • Imposing an oil production tax.
    • Raising tax rates on tobacco products and alcoholic beverages, and extending the state sales tax to some services and admissions to entertainment venues and sporting events.
    • Repealing legislative actions last year that gave tax breaks to California corporations and small businesses.
My opinion on these ideas:
No
No
No
No
Yes (oil production)
Yes (alcohol, tobacco, and extending sales tax to services, entertainment)
Don’t know, depends on the specific cut.

This would be a small amount of revenue compared to the deficit, so spending cuts would still make up the vast majority of the budget solution.

About the Author

Ethan Jacob

Author & Editor

I am Ethan Jacob Executive Director of the Center for Business and Policy Research at the University of the Pacific, where I have a joint faculty appointment in the Eberhardt School of Business and the Public Policy Program in the McGeorge School of Law..

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