www.ftb.ca.gov/individuals/txdlnqnt.shtml
What to do about it: Progressive Taxation
The revenue options below would raise an estimated $13 billion per year (and more when the economy recovers from the recession), essentially solving the state's structural budget problem:
- Reinstate the full vehicle license fee ($2.3 billion/year, with the adjustment from last year's budget already factored in)
- Bring the top income tax brackets back from 9.3% to 10% (individuals who make more than $250,000/year) and 11% (individuals who make more than $500,000/year) ($5 billion/year)
- Re-assess non-residential real property ($3 billion/year)
- Require that large corporations file as corporations, not “S” type partnerships ($500 to 600 million/year)
- Enact severance tax on oil produced in California ($1.5 billion/year with oil at $100 a barrel)
- Repeal the single sales factor loophole for multi-state and multinational corporations (1 billion/year)
These are each worthy proposals. But the real problem that needs to be addressed to solve California's budget problems is Proposition 13. It builds in inequities between residential and commercial taxation, and, depending on when a homeowner buys a house, inequities among homeowners as well. Reform of Proposition 13, which locks in a broken budget system, is an urgent priority.