Today the Howard Jarvis Taxpayers Association formally served the California State Board of Equalization, Department of Forestry and Fire Protection and Department of Justice with a lawsuit challenging the constitutionality of the state’s “Fire Prevention Fee.”

The wheels of justice grind slowly, but I’m pleased that this vitally important lawsuit is moving forward. Recent revelations regarding the state’s misuse of fire fee dollars have only strengthened our case that the ‘fire fee’ is really an illegal tax.

I plan to formally join the lawsuit by filing an amicus brief on behalf of the California taxpayers I represent. I’ve opposed the fire fee both during my time in the Legislature and as an elected member of the State Board of Equalization. But I’ve also encouraged impacted Californians to pay it because it is current law.

So far most taxpayers are doing so. Between August and December last year, the state mailed more than 760,000 bills for fiscal year 2011-12. As of March 1, about 72% of bills have been paid in full and 6% paid… Read More

As an elected official and taxpayer advocate, I cannot remain silent while state tax officials punish California taxpayers who in good faith followed our laws.

That’s why I’m urging the Franchise Tax Board to reverse a controversial staff decision seeking millions in retroactive taxes from California entrepreneurs and small businesses.

In my letter to the three members of the Franchise Tax Board, I call FTB’s December 2012 staff action “unwarranted and unfair to taxpayers.”

I explain that the Second District Court of Appeal’s decision in Cutler v. Franchise Tax Board does not require FTB to take this action. I warn that it “sends entirely the wrong message to investors, entrepreneurs and job creators doing business in our state.”

A growing bi-partisan chorus of California legislators, newspapers and… Read More

Here’s the fact that EVERYONE (including me) initially underappreciated concerning Phil Mickelson and CA state income taxes. Starting in 2013,golfer Phil Mickelson’s NET state income tax rate has jumped an astonishing 83.6%! And yes, this huge increase hits most Californian making more than $2 million income.

Here’s why. Until 2013, state income taxes were deductible for federal income tax purposes. Starting in 2013, for the really rich, this deductibility largely goes away (as does deducting property taxes and many other deductions). For people with over $2 million of income, they lose 80% of such deductions.

With Proposition 30 passed in November, CA has raised its income tax on the wealthy by 29%. The combined tax increase is breathtaking. Do the math, and you find that in 2011 the net CA income tax for Mickelson was 6.7%. In 2013 his net CA income tax is 12.3% — an increase of 83.6%.

Some would respond that Mickelson has been subject to AMT (the Alternative Minimum Tax) and thus could not deduct his state income tax in years past. But almost surely he has NOT been subject to… Read More

This native Californian was all bundled up to keep warm on a chilly Washington morning on Monday to witness the 57th United States Presidential Inaugural and hear President Obama’s second inaugural address.

To be honest, I was inspired by the address….. ….but, not in the way the president might have wanted.

I’m a big football fan. There’s nothing to bring you to your feet quite like the big touchdown pass. And, that is usually what brings accolades in the annals of football lore. But, just as important, and many times more important, is that tenacious defense. When you don’t have the ball, you count on those 11 defensemen to keep you in the game. Oh sure, they can sometimes get a “pick-6” and score a touchdown. But usually, they just hold the line and keep bad things from happening. The undefeated 1972 Miami Dolphins were led by what was dubbed the “no name defense”. They held the line and they were a big part of the only undefeated season in NFL history. As Republicans, we don’t have the ball right now. We may control the House, but we are the minority party in Washington since everything… Read More

The president says that we should just extend the debt limit, or cede the authority to him to expand it as he wishes. I’m sure he probably doesn’t think we even need such a discipline at all. He says he will not negotiate on this issue. He says that Congress has already approved all the spending that led to these deficits.

Like on most things, the president is completely wrong.

If credit cards had no limit on them, a whole lot of people would spend without end. The debt limit is like that. It is a discipline that reminds us – “Oh yeah…we’ve just borrowed $16.4 TRILLION. That’s kind of a lot. Maybe we shouldn’t spend so much.” We’ve borrowed 35% ($5.805 trillion) of that since Obama took office. Maybe we ought to think about it before we try to borrow $7 trillion more, which is an approximation of how much more this president wants to borrow in his second term. And, as I understand him, the president won’t negotiate on this. In fact, he has yet to negotiate on anything. No change here. And, as far as Congress already approving the spending….that’s not correct either, Mr. President. Sixty percent of all… Read More

Just the Facts, Ma’am – Fiscal Cliff Edition: This was the famous, at least to those of us who were alive then, admonition offered by the fictional LA detective, Sergeant Joe Friday, to witnesses who would engage in too much speculation about a crime. Well, I generally give you a lot of my opinion. Every once in a while, though, I give you just the unvarnished facts so that you can draw your own conclusions.

You have probably heard the term “Fiscal Cliff” enough times to make you sick. But, do you really know everything it entails? Below, you will find a comprehensive list of every law that will expire at the end of this year, as well as the result of our returning to whatever the law was before. The accumulation of all of these things has been dubbed collectively by the media as the “Fiscal Cliff”:

• Unemployment compensation will revert from a 73 week maximum to a 26 week maximum. This takes it back to the duration that existed in 2008 and prior. This will reduce spending by approximately $30 billion over 10 years.

• For the past 2 years, there has been a “payroll tax holiday”. For this… Read More

It’s bad enough that California’s gas tax is among the highest in the nation. It’s even worse that the gas tax goes up whenever gas prices rise.

Today I released data showing that high gas prices have resulted in a record windfall for government at the expense of California consumers.

California motorists paid a record $8.3 billion in state and local fuel taxes during the 2011-12 fiscal year.

From July 1, 2011 to June 30, 2012, the California State Board of Equalization collected $6.9 billion in motor vehicle fuel taxes, up from $6.7 billion the prior year. Excise tax revenues accounted for $5.2 billion, while sales tax revenues accounted for $1.7 billion.

Over the same time period, the state collected $1.4 billion in diesel fuel taxes, up from $1.2 billion the prior year. Excise tax revenues accounted for $343 million, while sales tax revenues accounted for $1.1 billion.

… Read More

It’s too early to know for sure, but so far sales tax revenue this year appears to be largely on track to meet the state’s budget needs.

The latest general fund sales and use tax revenue numbers show that from July through September the State Board of Equalization received $4.64 billion in revenue. That’s just two and a half percent shy of the Department of Finance’s budget projection of $4.76 billion.

Of course, I can’t help but think that if more Californians had jobs, these revenue numbers would be even stronger.

The latest numbers do not reflect the recent spike in gas prices. And those high fuel prices have the potential to create a tax windfall for state and local government.

Earlier this year I proposed legislation capping rising fuel taxes. Unfortunately, it failed to gain traction in the Legislature.

We don’t know yet how much revenue will come in this month. But we do know one thing for sure: Californians will pay plenty in tax.… Read More