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Proposed Tax On Top Earners Expected To Generate Billions

A Democratic state Assemblyman is calling for raising the income tax rate on California’s top earners. Similar ideas have been proposed and failed but according to supporters, this plan will raise billions.

Assemblyman Warren Furutani has proposed raising the personal income tax rate to ten percent for people who make more than 250,000 or couples making more than $500,000 a year. The rate would go to 11 percent for those making more. Right now it’s just more than 9 percent. Furutani said those rates would end after five years. He said the money raised could help close the nearly $27 billion dollar budget deficit.

“What we project is that potentially over that five year period we could raise an additional seven almost eight billion dollars for California,” Furutani said.

Similar ideas have been raised in recent years but have not been successful. They’ve been opposed by GOP lawmakers who have said this year’s proposal is a non-starter.

Comments

Avatar for user 'philosopher3000'

philosopher3000 | May 27, 2011 at 5:04 p.m. ― 3 years, 5 months ago

Instead of raising state taxes on income, why not just close the existing tax loop-holes: Prop.13 allows CA Corporations to avoid $40+Billion-Dollars in Property Taxes each YEAR.

http://www.closetheloophole.com/news/Jan9

Proposition 13 unfairly treats commercial property like residential property. In San Francisco, for example, according to Assessor Phil Ting, prior to Proposition 13, commercial property owners paid 59 percent of property tax revenues and residential property owners paid 41 percent. In 2008, commercial property owners paid just 43 percent of property taxes, while residential property owners paid 57 percent. I believe voters would approve reversing these 2008 ratios.

Why has the ratio shifted so dramatically? Property taxes are assessed when there is a change of ownership and commercial property changes ownership a lot less than residential property. And many commercial properties are held by holding companies and oftentimes these properties are sold or merged but ownership remains with the holding company. Therefore, no property tax is due.

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