Tuesday, June 9, 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:
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.

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