Comments for California Tax Reform Association http://caltaxreform.org Equity and social fairness Fri, 26 Feb 2010 03:41:28 +0000 http://wordpress.org/?v=2.7.1 hourly 1 Comment on Low Hanging Fruit in the Tax System: 10 Policies for $20 Billion by Education Budget Goes Bust – Drastic Cuts Likely in 2010 http://caltaxreform.org/?p=211&cpage=1#comment-79374 Education Budget Goes Bust – Drastic Cuts Likely in 2010 Fri, 04 Dec 2009 23:01:21 +0000 http://caltaxreform.org/?p=211#comment-79374 [...] For more information about the school budget crisis go here. There’s a list of proposed easy to swallow revenue solutions from the California Tax Reform Association here.s go here. There’s a list of proposed easy to swallow revenue solutions from the California Tax Reform Association here. [...] [...] For more information about the school budget crisis go here. There’s a list of proposed easy to swallow revenue solutions from the California Tax Reform Association here.s go here. There’s a list of proposed easy to swallow revenue solutions from the California Tax Reform Association here. [...]

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Comment on Low Hanging Fruit in the Tax System: 10 Policies for $20 Billion by Ten Tax Reforms Could Generate $21 Billion in New Revenue for California – http://caltaxreform.org/?p=211&cpage=1#comment-79373 Ten Tax Reforms Could Generate $21 Billion in New Revenue for California – Thu, 03 Dec 2009 04:23:52 +0000 http://caltaxreform.org/?p=211#comment-79373 [...] Ten Tax Reforms Could Generate $21 Billion in New Revenue for California The California Tax Reform Association recently published a report itemizing 10 tax reforms that California could use to generate $20 billion in new state revenue. These include: [...] [...] Ten Tax Reforms Could Generate $21 Billion in New Revenue for California The California Tax Reform Association recently published a report itemizing 10 tax reforms that California could use to generate $20 billion in new state revenue. These include: [...]

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Comment on Revenues for the Budget Crisis by California Tax Reform Association » Low Hanging Fruit in the Tax System: 10 Policies for $20 Billion http://caltaxreform.org/?p=101&cpage=1#comment-79372 California Tax Reform Association » Low Hanging Fruit in the Tax System: 10 Policies for $20 Billion Tue, 01 Dec 2009 21:15:20 +0000 http://caltaxreform.org/?p=101#comment-79372 [...] Download this article as a PDF With the state facing a current deficit and on-going yearly deficits $20 billion, the survival of basic services and a healthy public sector is at stake.  The following summarizes 10 measures which will have the least impact on economic growth and recovery—the “low-hanging fruit” in the tax system. (For a more complete listing of tax options go to  http://caltaxreform.org/?p=101. Governor Schwarzenegger stated that all the “low-hanging fruit” in the budget—that is, the easy cuts– had been removed.  But loopholes, untaxed windfalls, tax breaks with no benefits, taxes on the very rich and sin taxes, the taxes with little or no impact on economic recovery, have not been cut at all. For broader-based taxes, the state can maintain some part of the previous increases. Note:  the revenues are not the same in every year, since some do not come in until 11-12.  The LAO calls for a long-term workout, and these revenues would provide that. Summary Chart:  Low-Hanging Fruit in the State Tax System 1. Enact an Oil Severance Tax at 9.9% ($1.2 billion):  California is the only state, and the only place in the world, that does not tax oil production.  9.9% is the rate proposed by Governor Schwarzenegger.  Contrary to oil industry propaganda, California has the lowest tax on oil in the nation—about 60 cents/barrel—when it should be $6-$7 per barrel at current prices.  This tax will have no effect on the price of gasoline or on oil production. 2. Eliminate Secret Corporate Tax Loopholes ($1.7 billion):  As part of the September 2008 and February 2009 budget agreements, the Legislature passed new corporate loopholes in secret—loss carry-backs, credit sharing, and elective single-sales factor.  These take effect in 2011.  Contrary to the Governor’s rhetoric, it is not a “tax increase” to repeal these before they go into effect, and they are egregious new loopholes, benefitting mostly the largest corporations, that the state can ill afford. 3. Broaden Sales Tax Base to Include Untaxed Commodities ($2 billion or more): There is virtually unanimous agreement that our sales tax base is too narrow.   The Governor has supported broadening it, and the first steps should include entertainment, admissions, parking, golf and skiing, hotels (i.e. the temporary rental of space) and digital products—all of which are commodities easily subject to tax.  Beyond that, sales taxes on telecommunications, cable and satellite would generate $2 billion more. 4. Reinstate Top Income Tax Brackets  to 11% ($4 billion now, growing to $6 billion in out-years): The top 1% of earners earn an unprecedented 25% of income in California!  While that may go down a little due to the recession, the recovery of the stock market means capital gains for the wealthy are likely to recover, while ordinary incomes in a slow economy are not.  State income taxes have no impact on the location of the wealthy or investment in California, and this revenue will grow faster than economic recovery. 5. Close Corporate Property Tax Loopholes ($2 billion): Statutory definitions of change of ownership are thoroughly loophole-ridden. CTRA research has been identifying numerous cases where properties have not been reassessed at market value following a change in ownership.  We estimate that tightening corporate property tax loopholes would raise $2 billion. The legislature can act by statute to close this loophole, potentially by a majority vote in a two-step approach. 6. Maintain Vehicle License Fee (VLF) at 1% ($1.3 billion): The VLF is supposed to be an in-lieu property tax, but was cut from 2% to .6%.  A long-term resolution of this issue would put the VLF at the Prop. 13 rate, 1%, slightly below the current 1.15 temporary rate, beginning in 11-12. 7. Close Useless Corporate Tax Loopholes ($1 billion): Enterprise zones have been demonstrated to have no impact on jobs ($500 million).  Avoidance of capital gains on commercial property sales—so called like-kind exchanges—are driven by federal, not state considerations ($350 million).  Placing offshore tax havens in the water’s edge stops blatant tax manipulation ($150 million).  Impact on economic decisions: zero. 8. Increase Tobacco and Alcohol Taxes ($2.4 billion): Taxing products with negative impacts on society has positive effects.  Enacting a tax at 10 cents/drink generates $1.4 billion, and proposals for increased tobacco taxes have been keyed at generating $1 billion as well. 9. Improve Tax Collections ($2 billion initially, less on-going):  Governor Schwarzenegger vetoed majority vote legislation which would have provided an initial $2 billion in improvements in collections, including withholding on independent contractors, tightening nexus (Amazon issue), and proposing a bank records match.  That amount would fall as others, above, phase up. 10.  Lower current sales tax by ½ cent ($2.5 billion):   The temporary1-cent sales tax increase will expire July 2011.  Lowering the sales tax by ½ of that should grow to $3 billion, particularly with a broader base.  This could phase down by ¼ cent/year as the state’s fiscal condition recovers. Many of these tax changes have little or no negative economic impact.  To the extent there is any negative impact, it will be vastly overwhelmed by the negative impact of a state unable to finance infrastructure, that allows its higher education system and schools to deteriorate, that forces cutbacks in local government, and that shreds its safety net for its poorest citizens. [...] [...] Download this article as a PDF With the state facing a current deficit and on-going yearly deficits $20 billion, the survival of basic services and a healthy public sector is at stake.  The following summarizes 10 measures which will have the least impact on economic growth and recovery—the “low-hanging fruit” in the tax system. (For a more complete listing of tax options go to  http://caltaxreform.org/?p=101. Governor Schwarzenegger stated that all the “low-hanging fruit” in the budget—that is, the easy cuts– had been removed.  But loopholes, untaxed windfalls, tax breaks with no benefits, taxes on the very rich and sin taxes, the taxes with little or no impact on economic recovery, have not been cut at all. For broader-based taxes, the state can maintain some part of the previous increases. Note:  the revenues are not the same in every year, since some do not come in until 11-12.  The LAO calls for a long-term workout, and these revenues would provide that. Summary Chart:  Low-Hanging Fruit in the State Tax System 1. Enact an Oil Severance Tax at 9.9% ($1.2 billion):  California is the only state, and the only place in the world, that does not tax oil production.  9.9% is the rate proposed by Governor Schwarzenegger.  Contrary to oil industry propaganda, California has the lowest tax on oil in the nation—about 60 cents/barrel—when it should be $6-$7 per barrel at current prices.  This tax will have no effect on the price of gasoline or on oil production. 2. Eliminate Secret Corporate Tax Loopholes ($1.7 billion):  As part of the September 2008 and February 2009 budget agreements, the Legislature passed new corporate loopholes in secret—loss carry-backs, credit sharing, and elective single-sales factor.  These take effect in 2011.  Contrary to the Governor’s rhetoric, it is not a “tax increase” to repeal these before they go into effect, and they are egregious new loopholes, benefitting mostly the largest corporations, that the state can ill afford. 3. Broaden Sales Tax Base to Include Untaxed Commodities ($2 billion or more): There is virtually unanimous agreement that our sales tax base is too narrow.   The Governor has supported broadening it, and the first steps should include entertainment, admissions, parking, golf and skiing, hotels (i.e. the temporary rental of space) and digital products—all of which are commodities easily subject to tax.  Beyond that, sales taxes on telecommunications, cable and satellite would generate $2 billion more. 4. Reinstate Top Income Tax Brackets  to 11% ($4 billion now, growing to $6 billion in out-years): The top 1% of earners earn an unprecedented 25% of income in California!  While that may go down a little due to the recession, the recovery of the stock market means capital gains for the wealthy are likely to recover, while ordinary incomes in a slow economy are not.  State income taxes have no impact on the location of the wealthy or investment in California, and this revenue will grow faster than economic recovery. 5. Close Corporate Property Tax Loopholes ($2 billion): Statutory definitions of change of ownership are thoroughly loophole-ridden. CTRA research has been identifying numerous cases where properties have not been reassessed at market value following a change in ownership.  We estimate that tightening corporate property tax loopholes would raise $2 billion. The legislature can act by statute to close this loophole, potentially by a majority vote in a two-step approach. 6. Maintain Vehicle License Fee (VLF) at 1% ($1.3 billion): The VLF is supposed to be an in-lieu property tax, but was cut from 2% to .6%.  A long-term resolution of this issue would put the VLF at the Prop. 13 rate, 1%, slightly below the current 1.15 temporary rate, beginning in 11-12. 7. Close Useless Corporate Tax Loopholes ($1 billion): Enterprise zones have been demonstrated to have no impact on jobs ($500 million).  Avoidance of capital gains on commercial property sales—so called like-kind exchanges—are driven by federal, not state considerations ($350 million).  Placing offshore tax havens in the water’s edge stops blatant tax manipulation ($150 million).  Impact on economic decisions: zero. 8. Increase Tobacco and Alcohol Taxes ($2.4 billion): Taxing products with negative impacts on society has positive effects.  Enacting a tax at 10 cents/drink generates $1.4 billion, and proposals for increased tobacco taxes have been keyed at generating $1 billion as well. 9. Improve Tax Collections ($2 billion initially, less on-going):  Governor Schwarzenegger vetoed majority vote legislation which would have provided an initial $2 billion in improvements in collections, including withholding on independent contractors, tightening nexus (Amazon issue), and proposing a bank records match.  That amount would fall as others, above, phase up. 10.  Lower current sales tax by ½ cent ($2.5 billion):   The temporary1-cent sales tax increase will expire July 2011.  Lowering the sales tax by ½ of that should grow to $3 billion, particularly with a broader base.  This could phase down by ¼ cent/year as the state’s fiscal condition recovers. Many of these tax changes have little or no negative economic impact.  To the extent there is any negative impact, it will be vastly overwhelmed by the negative impact of a state unable to finance infrastructure, that allows its higher education system and schools to deteriorate, that forces cutbacks in local government, and that shreds its safety net for its poorest citizens. [...]

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Comment on Revenues for the Budget Crisis by Real School Reform » Blog Archive » Other Progressive California Tax Reforms http://caltaxreform.org/?p=101&cpage=1#comment-79354 Real School Reform » Blog Archive » Other Progressive California Tax Reforms Wed, 05 Aug 2009 18:59:30 +0000 http://caltaxreform.org/?p=101#comment-79354 [...] Proposition 13 is not the only problem with California’s tax system, and split roll is not the only needed fix. The California Tax Reform Association (CTRA) proposes dozens of ways (nearly all progressive ones) for California to tap $13-17 billion of new revenue annually http://caltaxreform.org/?p=101, or double that amount when federal matching grants are factored in. [...] [...] Proposition 13 is not the only problem with California’s tax system, and split roll is not the only needed fix. The California Tax Reform Association (CTRA) proposes dozens of ways (nearly all progressive ones) for California to tap $13-17 billion of new revenue annually http://caltaxreform.org/?p=101, or double that amount when federal matching grants are factored in. [...]

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Comment on It’s time to close a big tax loophole for businesses by Real School Reform » Blog Archive » Brainstorming a Fight Forward: What about Prop 13? http://caltaxreform.org/?p=154&cpage=1#comment-79353 Real School Reform » Blog Archive » Brainstorming a Fight Forward: What about Prop 13? Mon, 03 Aug 2009 12:40:05 +0000 http://caltaxreform.org/?p=154#comment-79353 [...] One of the most obvious reasons for California’s predicament is Proposition 13, the property tax-gutting measure that has devastated public schools and other services since it passed in 1979.  The measure was sold to voters as tax-relief for homeowners, but the big winners have been big businesses. Since Prop 13’s passage the share of taxes paid by single-family residences has sharply risen, as the portion contributed by commercial and industrial properties has plummeted.  That is because corporations avoid property reassessment for much longer periods than most homeowners do, by holding onto property longer or using legal loopholes to avoid reassessments even when they sell. [...] [...] One of the most obvious reasons for California’s predicament is Proposition 13, the property tax-gutting measure that has devastated public schools and other services since it passed in 1979.  The measure was sold to voters as tax-relief for homeowners, but the big winners have been big businesses. Since Prop 13’s passage the share of taxes paid by single-family residences has sharply risen, as the portion contributed by commercial and industrial properties has plummeted.  That is because corporations avoid property reassessment for much longer periods than most homeowners do, by holding onto property longer or using legal loopholes to avoid reassessments even when they sell. [...]

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Comment on Presentation to the Commission on the 21st Century Economy by watergroove http://caltaxreform.org/?p=144&cpage=1#comment-79352 watergroove Mon, 27 Jul 2009 16:09:41 +0000 http://caltaxreform.org/?p=144#comment-79352 In understanding what the tax issues are on commercial properties, one has to get into the minds of property owners and what drives them to act. I have over 20 years experience in the San Francisco Bay Area working for small and large companies and owning small businesses. There is a common denominator amongst all the hundreds of people I have met over the years who were property owners, and that commonality is the disincentives of taxation. They absolutely abhor taxes. To them taxes are nothing more than the antithesis to the American Dream. If you want to change the tax code you have to create incentives. Tax incentives should be geared to solving urban blight. How many derelict buildings and properties do we see around our urban centers? Almost every commercially zoned block has at least one property that is blighted. If there was an incentive to rebuild rather than what the status quo of taxation is, these property owners might do something with their properties. With incentives, cities stand a chance at wining the war on blight, and without tax payer’s money in eminent domain actions that sometimes result in challenges. It costs cities countless millions to have developers come in and redevelop. Case in point: in San Jose, California the condominium projects that are going unsold and many of them are a bigger blight to the overall aesthetic landscape. Instead of the wasted millions spent, why not have the original owners rebuild because they find it favorable to do so. If they do not rebuild, then heavily tax them; however, if they do rebuild, give them a moratorium on taxation just like you do when someone forms a corporation. First year state taxes are waived for startup corporations. Do the same thing with commercial property owners that substantially rebuild their properties. It could also be a sliding scale according to the scale of the blight mitigation. Proposition 13 will never be tinkered with nor overturned while non-progressive people are involved. Gaining a foothold towards a meaning dialog on Proposition 13 changes there has to be movement from the status quo to invigorate the local landscape. Otherwise the conversation is moot as the voters will never vote for more taxation with changes in Proposition 13 regardless of zoning classification. In understanding what the tax issues are on commercial properties, one has to get into the minds of property owners and what drives them to act. I have over 20 years experience in the San Francisco Bay Area working for small and large companies and owning small businesses. There is a common denominator amongst all the hundreds of people I have met over the years who were property owners, and that commonality is the disincentives of taxation. They absolutely abhor taxes. To them taxes are nothing more than the antithesis to the American Dream. If you want to change the tax code you have to create incentives.

Tax incentives should be geared to solving urban blight. How many derelict buildings and properties do we see around our urban centers? Almost every commercially zoned block has at least one property that is blighted. If there was an incentive to rebuild rather than what the status quo of taxation is, these property owners might do something with their properties. With incentives, cities stand a chance at wining the war on blight, and without tax payer’s money in eminent domain actions that sometimes result in challenges.

It costs cities countless millions to have developers come in and redevelop. Case in point: in San Jose, California the condominium projects that are going unsold and many of them are a bigger blight to the overall aesthetic landscape. Instead of the wasted millions spent, why not have the original owners rebuild because they find it favorable to do so. If they do not rebuild, then heavily tax them; however, if they do rebuild, give them a moratorium on taxation just like you do when someone forms a corporation. First year state taxes are waived for startup corporations. Do the same thing with commercial property owners that substantially rebuild their properties. It could also be a sliding scale according to the scale of the blight mitigation.

Proposition 13 will never be tinkered with nor overturned while non-progressive people are involved. Gaining a foothold towards a meaning dialog on Proposition 13 changes there has to be movement from the status quo to invigorate the local landscape. Otherwise the conversation is moot as the voters will never vote for more taxation with changes in Proposition 13 regardless of zoning classification.

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Comment on Initiative: Eliminate the New Corporate Loopholes by Initiative: Eliminate the New Corporate Loopholes http://caltaxreform.org/?p=104&cpage=1#comment-79349 Initiative: Eliminate the New Corporate Loopholes Wed, 08 Jul 2009 01:08:06 +0000 http://caltaxreform.org/?p=104#comment-79349 [...] Read the original post: Initiative: Eliminate the New Corporate Loopholes Pubblicato in Object | Tag: Affiliate programs, affiliate-program, corporate, cost-state, greatest, largest, legislature, mlm, new-loopholes, operating, participant, sales-may, these-budget, these-deals, voters « Mainstream Merchants Close Doors on Spammers Key Strategies Affiliate Marketers Must Utilize! » [...] [...] Read the original post: Initiative: Eliminate the New Corporate Loopholes Pubblicato in Object | Tag: Affiliate programs, affiliate-program, corporate, cost-state, greatest, largest, legislature, mlm, new-loopholes, operating, participant, sales-may, these-budget, these-deals, voters « Mainstream Merchants Close Doors on Spammers Key Strategies Affiliate Marketers Must Utilize! » [...]

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Comment on California’s Cavernous Corporate Loopholes: LA Times op-ed by dmikkelsen http://caltaxreform.org/?p=89&cpage=1#comment-79347 dmikkelsen Tue, 07 Jul 2009 02:22:39 +0000 http://caltaxreform.org/?p=89#comment-79347 Dear Mr. Goldberg, I wanted to thank you for this article. It was truly enlightening, but much more disturbing. I am a public school teacher who has been watching my field get decimated by the funding cuts. I find it absolutely unconscionable that the governor and our legislators could do something like this. I am truly concerned that the state of California may go bankrupt because of what has been happening. Leaders are slashing at the tax base and at public programs at the same time, which seems to be recipe for disaster. Can you recommend any books that could give me a well-rounded, "state of the economy" for California that would help me get a clearer perspective on where things have been and where things are going economically for California? I don't know if this comment can be viewed publicly, so I don't want to leave my email. I hope you can respond in some way. Thanks, Dan Dear Mr. Goldberg,

I wanted to thank you for this article. It was truly enlightening, but much more disturbing. I am a public school teacher who has been watching my field get decimated by the funding cuts. I find it absolutely unconscionable that the governor and our legislators could do something like this.

I am truly concerned that the state of California may go bankrupt because of what has been happening. Leaders are slashing at the tax base and at public programs at the same time, which seems to be recipe for disaster.

Can you recommend any books that could give me a well-rounded, “state of the economy” for California that would help me get a clearer perspective on where things have been and where things are going economically for California? I don’t know if this comment can be viewed publicly, so I don’t want to leave my email. I hope you can respond in some way.

Thanks,

Dan

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Comment on Single Sales Factor: the continued destruction of the corporation tax by California Sales Tax – Sales Tax Problems CA Sales Tax Audit Sales BOE Los Angeles CA Expert « California Sales Tax http://caltaxreform.org/?p=77&cpage=1#comment-79343 California Sales Tax – Sales Tax Problems CA Sales Tax Audit Sales BOE Los Angeles CA Expert « California Sales Tax Tue, 30 Jun 2009 09:37:15 +0000 http://caltaxreform.org/?p=77#comment-79343 [...] California Tax Reform Association » Single Sales Factor: the California is on the verge of continuing to gut its corporation tax, without debate and discussion. Last year’s budget agreement contained two provisions to shelter income and [...] [...] California Tax Reform Association » Single Sales Factor: the California is on the verge of continuing to gut its corporation tax, without debate and discussion. Last year’s budget agreement contained two provisions to shelter income and [...]

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Comment on Single Sales Factor: the continued destruction of the corporation tax by California Sales Tax – California Tax Reform Association » Single Sales Factor: the « California Sales Tax http://caltaxreform.org/?p=77&cpage=1#comment-79340 California Sales Tax – California Tax Reform Association » Single Sales Factor: the « California Sales Tax Wed, 24 Jun 2009 19:04:52 +0000 http://caltaxreform.org/?p=77#comment-79340 [...] California Tax Reform Association » Single Sales Factor: the California is on the verge of continuing to gut its corporation tax, without debate and discussion. Last year’s budget agreement contained two provisions to shelter income and [...] [...] California Tax Reform Association » Single Sales Factor: the California is on the verge of continuing to gut its corporation tax, without debate and discussion. Last year’s budget agreement contained two provisions to shelter income and [...]

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