California Commission for the 21st Century Economy
Howard Jarvis Taxpayers Association Issues
Statement on Release of Tax Commission Report
Sacramento -- In response to the release of the California Tax
Commission report, Jon Coupal, President of the Howard Jarvis
Taxpayers Association, released the following statement today:
We are pleased that the California Commission for the 21st Century
Economy has arrived at proposals which do no violence to Proposition
13. It should be noted that the original charter for the commission
was to deal primarily with the issue of revenue volatility. Of the
three major revenue streams to government in California, the
property tax under Prop. 13 is the most stable. Thus, it has not
only saved taxpayers from being taxed out of their homes, it has
proven to be a moderating influence during economic turmoil.
It should also be noted that revenue volatility is, by itself, not a
problem. It is only a problem in California because our politicians
do not have the discipline to save money in boom years. As you would
never leave an alcoholic in a room alone with a bottle of whiskey,
our Legislature simply cannot help itself to spend every penny that
comes into the treasury, even in years where revenue far surpasses
projections.
We have concerns about the business net receipts tax. First, it is
unclear what the rate of tax will be. This could easily be a
multi-billion dollar tax increase, violating one of the initial
ground rules for this commission which was that the proposals were
to be revenue neutral. Second, this tax has some of the indicia of a
European-style value added tax. The problem, of course, is that such
taxing schemes effectively hide the true scope of the tax burden
from the ultimate consumer. Taxes should be obvious and painful --
not hidden. Consumers should know for every purchase of retail goods
or services exactly how much of what they are paying is going to
government.
The proposals to flatten out the income tax rates are worthy of
serious consideration. You cannot tax high income individuals, like
Tiger Woods, once they have moved out of state. Flattening the
income tax rates will help to slow the exodus of California's best
and brightest individuals who should be encouraged to stay in the
state.
Statement on Release of Tax Commission Report
Sacramento -- In response to the release of the California Tax
Commission report, Jon Coupal, President of the Howard Jarvis
Taxpayers Association, released the following statement today:
We are pleased that the California Commission for the 21st Century
Economy has arrived at proposals which do no violence to Proposition
13. It should be noted that the original charter for the commission
was to deal primarily with the issue of revenue volatility. Of the
three major revenue streams to government in California, the
property tax under Prop. 13 is the most stable. Thus, it has not
only saved taxpayers from being taxed out of their homes, it has
proven to be a moderating influence during economic turmoil.
It should also be noted that revenue volatility is, by itself, not a
problem. It is only a problem in California because our politicians
do not have the discipline to save money in boom years. As you would
never leave an alcoholic in a room alone with a bottle of whiskey,
our Legislature simply cannot help itself to spend every penny that
comes into the treasury, even in years where revenue far surpasses
projections.
We have concerns about the business net receipts tax. First, it is
unclear what the rate of tax will be. This could easily be a
multi-billion dollar tax increase, violating one of the initial
ground rules for this commission which was that the proposals were
to be revenue neutral. Second, this tax has some of the indicia of a
European-style value added tax. The problem, of course, is that such
taxing schemes effectively hide the true scope of the tax burden
from the ultimate consumer. Taxes should be obvious and painful --
not hidden. Consumers should know for every purchase of retail goods
or services exactly how much of what they are paying is going to
government.
The proposals to flatten out the income tax rates are worthy of
serious consideration. You cannot tax high income individuals, like
Tiger Woods, once they have moved out of state. Flattening the
income tax rates will help to slow the exodus of California's best
and brightest individuals who should be encouraged to stay in the
state.
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