New Tax Regime for California

The Commission on the 21st Century Economy released their report and recommendations - AP Release.


Notably missing were the calculations showing that their ideas would create a sustainable level of tax receipts at the 4% Business Net Receipts Tax level. The concern is that it may be a number too low that creates additional fiscal restraint, where fiscal restraint is a somewhat separate issue.


That said, the reduction of personal tax rates and small business tax rates (including an elimination of the $800 per year existence fee) yours truly is enthusiastic about (assuming the revenues would be sufficient to meet obligations)!


Further, the idea that they will simultaneously reduce the corporate tax, yet broaden the net to capture revenues generated within the state should seemingly drive new business to our state. But again there is no empirical data on offer to show anything to bolster my assumption here.


I would STRONGLY OBJECT to some final version of the recommendation to allow additional oil leases ABSENT any modernization of the oil extraction tax in line with the intent of the voted down (after a massive advertising blitz against) Prop 87. The commission recommends, "The state should permit new oil leases with royalty revenues going to a reserve fund," but if we are still taxing oil at 1.5% where most every nation and state is more towards 5% or above, then this is really just a gift to big oil!


I havent scoured all details of the Full text , but I imagine that by the time the Democratic Congress gets done with it it will change considerably from its current academic and nescient state.


In general I hope the 70% I like and the 20% I strongly dislike will be seriously considered by the legislature, but most the recommendations are common sense (like merging the existing two tax collection agencies). One hopes the common sense elements are left more or less in tact... We'll see!