Commission on the 21st Century Economy Releases Tax Recommendations
Statement by California Labor Federation Executive Secretary-Treasurer Art Pulaski
“The recommendations released today by the Tax Commission are a profound disappointment, offering no solutions to better support our state’s middle class. The proposals are a step backward, shifting the tax burden from the wealthiest taxpayers to middle- and low-income families at a time when we can least afford it. If enacted, these proposals would entomb California in perpetual recession.
“The commission’s recommended changes to the personal income tax would create a massive tax giveaway for the very rich at the expense of the vast majority of California taxpayers. In addition to placing more of a tax burden on the middle class, these proposals would also harm businesses and stymie job growth. The commission’s recommendation to institute a risky Business Net Receipts Tax (BNRT), despite opposition from labor unions, business groups and tax experts, is a glaring example of how out-of-touch these proposals are. The BNRT would put downward pressure on wages, increase prices for consumers and encourage companies to use independent contractors or contracting services instead of providing stable, full-time employment.
“It’s befuddling that the commission’s recommendations do little to address the state’s ongoing budget crisis, ignoring sensible revenue streams that a majority of Californians support. Closing corporate loopholes would save the state billions of dollars every year and would create a more fair and equitable tax structure. Additionally, common-sense taxes on oil extraction, tobacco, and digital downloads and Internet commerce must be considered if we are to address the state’s alarming revenue shortage and bring our tax system into the 21st century. Every day that we give wealthy corporations a pass on paying their fair share, California communities become less safe, less clean and less stable.
“While it’s time for new ideas on how to fix California’s broken tax system, the Governor’s commission offered almost nothing for most taxpayers to embrace. Instead, the commission proposed changes that would intensify the downward economic spiral our state’s families are already feeling.
“The Legislature should roundly reject the commission’s proposals. Maybe then we can begin a serious discussion about how to restructure our tax system to support the middle class, grow jobs and rebuild California’s crumbling economy.”
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