Are California taxes too high? Well, seven members of California’s Legislative Assembly and five members of the Senate think they’re not high enough.
These 12 politicians have co-authored a bill to amend the California constitution to make tax rates permanently higher and impose an excise tax, payroll taxes, and a special income tax.
These are the opening paragraphs of my short piece for the Institute for Policy Innovation. The piece is titled “Will California’s Government Raise Taxes Even More?” and appeared on January 19, 2022.
I then very briefly lay out the proposed permanent tax increases that would be locked into the California constitution and briefly analyze them.
Read the whole thing, which is not long.
READER COMMENTS
Thomas Lee Hutcheson
Jan 21 2022 at 6:04am
Payroll taxes are bad. I hope they can get rid of those.
Steve
Jan 21 2022 at 11:07am
I’d be happy if we could somehow replace the entire income tax system with just a larger payroll tax. Would be great to remove the disincentive to save and invest capital.
Johnson85
Jan 21 2022 at 2:49pm
Replacing our income tax with a large payroll tax would be an improvement because of simplification, but that’s be a pretty terrible system too.
Thomas Lee Hutcheson
Jan 21 2022 at 7:39pm
In that case you should support a consumption tax like a VAT or, an income tax with a deduction for savings. But why would one want to single out wages to tax?
Mark Barbieri
Jan 21 2022 at 10:20am
This is one reason why California is #1 on U-Haul’s list of states people leaving.
“California remained the top state for out-migration, but its net loss of U-Haul trucks wasn’t as severe as in 2020. That can be partially attributed to the fact that U-Haul simply ran out of inventory to meet customer demand for outbound equipment.”
David Seltzer
Jan 21 2022 at 4:50pm
Mark, If this proposal becomes law, I wonder if U-Haul will place orders for electric trucks. The irony, California gives owners an EV rebate. I wonder if U-Haul would qualify?
Alan Goldhammer
Jan 21 2022 at 11:22am
How can this be reconciled with the recently announced $31B state government surplus? Twelve legislators out of 120 is no cause for worry in terms of legislation progressing. Most Dems and all the Republicans won’t support this. This snatched from the headlines post is not worth worrying about.
David Henderson
Jan 21 2022 at 11:35am
You wrote:
Good question. The answer, I think, is that the legislators know how expensive single-payer would be and want to lock in the funds. Even at that, I think they’re underestimating the price tag for single-payer.
You wrote:
If those were the only supporters, then you’re right. But these are sponsors and co-sponsors and that number is often below the number of legislative supporters.
You wrote:
I hope you’re right. But I believe in going after bad ideas when they first come along, not waiting until they’re in full bloom.
Alan Goldhammer
Jan 21 2022 at 1:27pm
On this we are in perfect agreement!!!
If Newsome holds the line or even gets some tax relief passed, he will be a prime candidate for national office when Biden announces he will not run for reelection. He just has to live down the infamous French Laundry dinner.
Henri Hein
Jan 21 2022 at 3:19pm
Nevada is looking good, but Washington is not bad either. 🙂
Mark Brophy
Jan 21 2022 at 6:52pm
Doing business is a right but doing business as a corporation is a privilege.
David Henderson
Jan 22 2022 at 11:35am
We agree on the first clause: Doing business IS a right. And, by the way, the payroll tax would apply to all employers, not just incorporated ones.
You also wrote:
I think there’s a sense in which that statement is true and a sense in which it’s false. I wonder if we have the same views on this. Please give your reasoning.
Thomas Lee Hutcheson
Jan 23 2022 at 9:14am
But why tax payrolls at all, especially with a cap, especially as it creates an incentive to compensate with non-wage means like health insurance, preferential loans, etc? A wage tax creates the same kinds of distortions a minimum wage, discouraging employment and distorting the forms of compensation.
Comments are closed.