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Huge tax shift proposed in Sacramento

Uploaded: Apr 13, 2017
On the heels of the $52 billion tax increase for roads, the Legislature is quietly considering another huge tax bill.
Sen. Bob Hertzberg, D-Van Nuys, has introduced SB 604 that would collect sales taxes on services in addition to goods. It’s still in the Senate Government and Finance Committee, which requested a report from the State Board of Equalization on how much money it would raise.
The answer: $122.6 billion in new revenue. That would be split about 50/50 between the state and local agencies.
That’s roughly what the state has budgeted to spend in the current fiscal year.
If the expanded sales tax is used to reduce the state’s excessive personal income tax rate so it becomes revenue neutral, then it is worth considering. During Gov. Schwarzenegger’s term, he commissioned a blue-ribbon task force to examine overhauling the state’s taxation system to make it more stable year to year.
It went nowhere. But, the state remains very dependent upon the top 1 percent of wage earners who pay about half of the total income taxes. When there’s hiccup in their income, the state has suffered mightily. That’s one reason the governor has fought so hard to increase the rainy-day fund to an estimated $6.7 billion by June 30. That’s insurance against the inevitable downturn that will come.
Sadly, the chances of the Democrat-dominated Legislature actually crafting and passing a bill that is nearly revenue neutral is nil. The sales tax expansion would be regressive and hit poorer people hard—just as the gas tax increase did. The bill contains a provision to create a fund with some of the revenue to offset impacts on people with fewer resources.
Incidentally, congrats to Sen. Steve Glazer for voting against the transportation tax increase as did Catharine Baker. Democrat Glazer, who already alienated the public employee unions with his stand against BART strikers, probably now will face construction union opposition. Given that he said two-thirds of his district opposed the tax, he’s probably just fine with the voters.
The governor doled out about $1 billion in last minute deal making to convince skeptical Democrats and one Republican in the Senate to back the measure. Otherwise, Glazer’s opposition could have killed the bill that needed two-thirds approval to pass.

Comments

 +   3 people like this
Posted by Patriot, a resident of Birdland,
on Apr 14, 2017 at 6:45 pm

We complain about out terrible hi ways and no one has done a thing until now! Finally Gov. Brown has done something about our infrastructure and stop just talking about it! Sorry Catharine Brown did nothing. Good job California!


 +   2 people like this
Posted by JC, a resident of Gatewood,
on Apr 15, 2017 at 10:28 am

Thank you to Glazer and Baker for not supporting another money grab by the Oligarchy in Sacramento. Your negative votes were the only breath of fresh air coming out of the central valley and the cronies that run this state. Where has the gas tax they have been collecting all these years been going? Clearly not the roads. CalTrans is one of the most inefficient agencies in this state with thousands of employees that get nothing done.
I have ZERO faith that the "initiative" they will put on the ballot to stop any "diversion" of funds from these taxes will happen. It will be diverted alright into the pockets of the union pension fund.


 +   1 person likes this
Posted by Bill Jones, a resident of Castlewood Heights,
on Apr 17, 2017 at 4:03 am

Another reason to leave the state. Just another tax to support the people living on the dole.


 +   5 people like this
Posted by Hmmm , a resident of Diablo,
on Apr 17, 2017 at 11:04 am

Looked at another way, Dino Glazer forfeited the chance to get something good for Orinda by whipping that poor one-trick pony of a no bart strikes demand.


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