California Budget Mess Will Not be Solved on Margins
I was struck by an excellent column by Timm Herdt of the Ventura Star. He posed a very insightful question, “Are efforts to better collect taxes that are already owed the political equivalent of actually raising taxes, or are they designed to ensure fairness for those who are already paying their full share?” I say the answer is they are tax increases, but so small as to be inconsequential. Fairness is pursuing individuals who falsify their tax returns and purposely do not pay. Raising other people’s taxes is not fairness.
Herdt focuses on several issues, like the proposed “Amazon tax” that would require internet retailers with affiliates in California to collect sales tax on behalf of the state for sales that they do not make. Another is a proposal to assess penalties on high-income taxpayers who are denied eligibility for certain tax credits. Under the bill (SBX8 32), those who unsuccessfully claim credits that defy “reasonable basis” in an “excessive amount” – both undefined terms – face a 20% penalty of the amount claimed, if the taxpayer makes over $250,000 a year. At the same time, the bill would allow people who short-sell… Read More