CA: California's Assembly speaker aims to fix tax system before next crisis hits

LA Times ^ | 7/14/08 | George Skelton

[NormsRevenge]

SACRAMENTO -- One severely broken part of California's state government is the tax code. It's antiquated and unreliable.

Government financing is too heavily dependent on the rich, who have good and bad years, causing roller-coaster tax trauma in the Capitol. And there isn't enough help from the creaky old sales tax.

The volatility of the tax system keeps getting worse, making it increasingly difficult for policymakers to plan ahead.

New Assembly Speaker Karen Bass (D-Los Angeles) has taken up the cause and is bent on creating an independent blue-ribbon commission to overhaul the tax code.

"The economic crisis is national, but not every state is having the problems we are," she lamented last week over a blackened salmon salad. "How have other states managed to weather this, and why can't California figure out how to do it?"

She wants the commission to study other states' tax codes and find out.

"I'd expect it to come up with more stable ways to generate revenue so we are not completely dependent upon the upper income brackets. Also, I envision the commission coming up with ways to incentivize the economy."

OK, is this a plot to raise taxes? That's what some Republicans fear.

Not directly, Bass responds, but the effort could result in a bigger take if the economy is stimulated by tax incentives.

"Some states have revised their tax codes in a revenue-neutral manner, but wind up producing more revenue in the long run," she says, sounding somewhat like a conservative supply-sider. "I definitely want to see more revenue. But that doesn't mean it can't be revenue-neutral in the short term and -- especially if the economy is incentivized -- produce more revenue in the long term."

[HwyChile]

Sounds like a plan to start taxing the non-rich once the state has soaked the rich for all its worth. The democrats always start out with the Marxist rhetoric of taxing the rich, but at the end of the day that is not enough. Look at the European countries who put a heavy tax on more than just the rich.

[Attention Surplus Disorder]

Whenever the CA legislature thinks about “fixing” something, it means “fixing” under the most corrupt definition you can conjure. Think about “fixing” a prize fight or a basketball game. These are craven criminals out for nobody but their sleazy selves, make no mistake about it.

[RC2]

Why do they need more revenue? For what? Quit feeding the illegals, quit giving them our medical services. Stop guaranteeing raises for our school system that can’t even teach the kids to read and write. Stop the waste in the state government, cut their pay 10% every time they go over budget. Do this every six months and you’ll see things change.

[Dilbert San Diego]

From what I understand, the major problem with the Calif. budget is that expenses have grown faster than tax revenues in recent years. So the big challenge is to try to hold spending in line.

Another big challenge has been the growth of bond issues and the resulting long term expense that creates. In 1988, the state had about $4 billion in long term bonded indebtedness. Today that number is about $45 billion. And I’ve heard that there will be more bond issues on the ballot in November for the voters to approve.

It’s good that the law forces them to balance the budget every year. But I’m concerned they will say that there’s no spending that can be cut, so then they will simply figure out how much to raise taxes to accomplish that.

I’ve heard they do book keeping tricks too, like delaying sending out state payments owed to vendors, and counting that as a reduction in expenses. They still end up spending our tax money, they just put off when things get paid.

So, I hope they get a goal of a balanced budget, without tricks and without tax increases. The financial mis-management of the Gray Davis era led to the recall election and the election of Gov. Arnold S. Even though it’s a liberal leaning state, the voters are concerned about the financial situation of the state.

[goldstategop]

Abolish the income tax in California and impose a real spending limit. I predict Karen Bass and her party are never going to go for it. What they're doing is just wasting time spinning their wheels.

"Show me just what Mohammed brought that was new, and there you will find things only evil and inhuman, such as his command to spread by the sword the faith he preached." - Manuel II Palelologus

[Brilliant]

In other words, he wants to increase taxes.

[Mariner]

She’s a dim from LA...OF COURSE they will raise taxes.