With the state facing what is now a $19.1 billion budget shortfall, as we sit here now over a month into the fiscal year without a state spending plan, you can expect to see a lot of “creative” ideas coming out of liberal politicians who are desperately trying to close the budget gap while minimizing more cuts to state government spending. That having been said, virtually all of the one-time gimmicks and accounting tricks have already been used before reaching this point.
No one should be surprised that the latest “creative idea” to come out of the Capitol, purportedly floated by State Senate President Darrell Steinberg, is – you guessed it, another tax increase. His proposal is to raise most income tax rates for Californians, while lowering sales tax rates. The basic idea is that income taxes are deductable on itemized federal tax returns, and the swap in taxes would shift a few billion bucks from the coffers of the federal government into state government. John Myers of KQED Public Radio has an excellent summary and analysis of this proposal on his Capitol Notes Blog. I am excerpting some of it below, but you can read the whole thing here.
Several legislative and lobbyist sources who spoke only on background (as with most budget rumblings) confirm that such proposal is being talked about, and that it’s purported selling point is that it might not cost many Californians any money.
**There is more – click the link**