Support for LAist comes from
We Explain L.A.
Stay Connected

Share This

This is an archival story that predates current editorial management.

This archival content was written, edited, and published prior to LAist's acquisition by its current owner, Southern California Public Radio ("SCPR"). Content, such as language choice and subject matter, in archival articles therefore may not align with SCPR's current editorial standards. To learn more about those standards and why we make this distinction, please click here.

News

New CA Tax Recommendations Could 'Reduce the Burden on the Wealthy'

tax-commission.jpg
Photo by Paraflyer via Flickr
Before you read more...
Dear reader, we're asking you to help us keep local news available for all. Your tax-deductible financial support keeps our stories free to read, instead of hidden behind paywalls. We believe when reliable local reporting is widely available, the entire community benefits. Thank you for investing in your neighborhood.

A state report on restructure California's tax system is due today and the Associated Press, which obtained an early copy, has found that bold changes are recommended, prompting a large amount of skepticism. The AP explains some:

Since the tax system was established in the 1930s, when farms and factories drove the economy, the state's tax policies have not kept up with the technology and service industries that now dominate. The system also has made the state's finances more volatile. California used to get most of its revenue from the sales tax.

Now personal income tax makes up the majority of money coming in, and that makes California vulnerable to the booms and busts of Wall Street. The shift has led to a series of budget crises since the state now relies heavily on the top 10 percent of income earners, who paid more than 53 percent of the personal income tax last year, according to the report.

The recommendations made are in the hands of the state legislature. Governor Schwarzenegger has called for a special session.