Note: not all of these options are progressive. They are included to show the range of options that will be considered in any discussion of tax increases. [from California Tax Reform Association]
Restore top income tax brackets
Assembly Bill 2897 (Loni Hancock) would raise $5.6 billion in the first year, and $4 – 5 billion yearly after that. It would do so by bumping the top joint income tax rates up from the current limit of 9.3% to 10% for people who make over $200,000 per year, and to 11% for people who make over $400,000.
Commercial property reassessment
Commercial property is currently only reassessed when sold. With a statutory change we could raise $1-2 billion per year. With a constitutional change it would be 4+ billion.
Oil production/severance tax
California is the only oil producing state (out of 21) that does not tax oil when it comes out of the ground. The average tax for the other states is 6%. The oil corporations will not “leave California” if this tax is imposed. Their profits—at all time record highs—will withstand the new tax. This will raise more than $1 billion per year with oil at $100/barrel.
Restore Vehicle License Fee
By returning to the 2% rate repealed by Governor Schwarzenegger, the state would take in close to $6 billion per year.
Broaden the sales tax base (non-labor “services”)
$1-$4 billion (higher amount includes telecom and cable) could be raised from including admissions, entertainment, parking/ temporary rentals of space.
Sales tax increase
A ½ cent increase equals $3 billion. The governor is proposing, as a fall back position for his lottery lease scheme, a 1% sales tax increase. This would bring in $6 billion.
Other:
Limits on corporate credits/exclusions: $1 billion +
*tighten, phase out enterprise zone credits =$120 million (per LAO)
*limit Subchapter S to smaller corporations = $300 million
*Limit the ability of corporations to use credits and carry-forwards to zero out corporate income = $700 million (per LAO)
*Eliminate water’s edge election for multi-nationals = $400 million
*Eliminate like-kind exchanges for commercial property (tax avoidance) = $50 million
Carbon tax/carbon permit fee = $2 billion
Other “green” taxes: e.g. parking subsidies = $150 million
Mortgage interest: $100 million to $1 billion (per LAO proposal to turn deduction into credit)
Collections (majority vote):
--Withholding on independent contractors = $2 billion acceleration, $200 million on-going
--Nexus extensions = ? $100 million
--Corporate disclosure of tax shelters = ? $100 million
--Bank intercepts, business license revocation, other tax gap = $100+ million
