Schwarzenegger suggests state consider flat tax

Could the flat tax come to California?

Gov. Arnold Schwarzenegger said today that he would like to see such “radical” proposals come out of a commission now studying an overhaul of the state’s tax system. The governor told the editorial board of the Sacramento Bee that he hoped the commission would not be afraid to propose something like “a 15%  straight tax.”

“That’s the kind of radical, daring kind of a proposal that I want to see on the table so we can look at it and say, ‘Oh, let’s study this, maybe that is the way to go,’ ” Schwarzenegger said during the discussion, which was webcast.

The current system, based on highly unstable income tax revenue that fluctuates with the economy, “doesn’t work,” Schwarzenegger said.

Advocates of a flat tax, which applies a single tax rate to all income, say it increases compliance with the tax codes because it is so simple and easy to understand. But opponents dislike that it taxes the wealthy at the same rates as the poor.

Steve Forbes and Jerry Brown both pushed for it during their presidential campaigns.

Schwarzenegger said he was concerned that the commission might be too timid in what it suggests and rule things out in advance thinking that either Democrats or Republicans would object.

 “I hope and I pray that they don’t think they have to make a political decision,” he said.

-- Michael Rothfeld in Sacramento

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Comments

[Chris Duran]

15%! What?!!!

[CPA Dan]

15%? The top California tax rate now is only 9.3% now, plus a 1% mental health services tax for incomes above $1 million.

What the governor is really proposing is a TAX INCREASE disguised as tax reform.

Don't buy into it. The state needs money. They won't be lowering your taxes anytime soon except through voter initiative.

[stu]

Whey to go Mr. Terminator. Why don't you just nail the poor and middle class, and tax the rich less. God forbid he tax his rich buddies a little more. This guy is going to destroy are state. We are going to be the banana republic of California. The people of California were stupid voting this guy in. I can't wait till his term ends next year.

[masimons]

Get rid of the Francise Tax Board for a flat tax ?
Could be good, as long as legislature can't just keep upping it all the time to cover their endless spending.

And set a national example.

[Ken]

A flat tax with a significant exemption ($20,000 or so) will not tax the wealthy and poor or even the middle class alike. In fact, it would be a perfectly progressive tax, with no penalty for earning more income. Someone making less than $20K will pay no tax, someone making $25K will only pay tax on $5,000, and somebody earning $1M will pay tax on almost all of it. The effective tax rate will increase with income. The only problem is if you start adding additional exemptions, then the system will get gamed by lobbyists.

[Steven Moshlak]

"But opponents dislike that it taxes the wealthy at the same rates as the poor."

Who gives a rat's behind about percentages, except those who don't want to improve their lot in life (see the LAT article on (funemployment).

If I make $100k a year, I pay $15k.

If I make $20K a year, I pay $3k.

Am I missing something here or is the person earning $100k/yr paying $12k more than the "poor person" earning $20k/yr?

$12k isn't anything to sneeze at.

It's the dollars collected that counts, not the percentage. Don't penalize success, but reward it.

[Julie]

Instead of doing something that is extremely unfair to those who do not make a sizable income, why not just tax pot? He's going about this the entirely wrong way. Probably because he's too conservative and too rich to make a smart move that could change the way our state is looked at.

[Airdave23]

Liberals will never agree to a flat tax since they won't be able to tax the "wealthy" exclusively to pay for more social programs. Isn't that right comrades?

Besides, until our state government learns to add, it won't make a bit of difference where they get revenue from.

[Dean]

that's the problem with our legislature. Everyone is so worried about being re-elected, that no one wants to be innovative and bold an move on "out of the box" idea/avenues of action. Sad....

[Roger Pariseau]

A flat tax is a great idea! 15% is absurd! Our whole country could operate with a 10% flat tax rate were it limited to just those entities listed in our Constitution. With a 15% rate, coupled with the almost 10% rate imposed by local jurisdictions, would have a quarter of our income taxed before the Feds got to our income as well.

Flat tax at 5%, no deductions, no exceptions, live just fine with it after firing all the bureaucrats. Think Theories X, Y or Z!

[Bill - Santa Clarita CA]

The state need to make further cut back to 1999 or 200o levels. The no Free lunch should apply to the state and the people on welfare. Parents should feed their own children and not expect the taxpayer to pay for their meals. Otherwise, don't have children or AKA anchor babies.

[Sable Crow]

Here's a suggestion: Repeal Prop 13. Every reasonable person I've talked to is baffled why two houses, right next to each other and of comparable value, can have radically different tax rates.
Phase market-value-based taxes back in over 5 or 10 years. A downturn is a great time to do it, since you could argue that market values (and therefore taxes) are much lower. If you're worried about displacing elderly or fixed-income recipients, then cap the max rate for those over a certain age (at, say, 70% of the fair market value).
This would have the effect of helping affordability (removing the undue burden on new buyers versus legacy owners), smoothing the state's tax receipts (nearly 50% of the state's current tax receipts comes from highly-variable income taxes), and restoring fiscal sanity.

[mandy]

Wake up folks. A flat tax is only on income. The wealthy do not have 'income' the way you and I have income. They clip coupons, have dividends, bonds, tax free municipals and interest. That will not be taxed. This is simply the old pledge to Grover Norquist about drowning the govt. in the bathtub. Interesting the 15%. Put that on top of the cuts to state workers and you get a 30% loss for those people. Hmmm, more houses in foreclosure etc. Look at his cuts already. He is after the poor, sick and even animals at the shelter. I will leave. California. Take my retirement and go north and I am sure many others will join me. Retirees are the best thing you can have. We spend money but don't require jobs. Either impeach him or invest in pitchforks for the coming revolution.

[marilyn]

Welcome to the Revenge of the Republicans. I didn't get my propositions so everyone and everything will suffer. A flat tax will benefit the wealthy in California and once again the people will carry the burden, much like the French peasants and workers of 1789. Do you job legislature and fix things reasonably not with some ridiculous flat tax and other right wing solutions. Dems stand up to the republicans. People vote the obstructionists out of power. Liberals can vote green conservatives can vote libertarians. Impeach Arnold, I no longer care what that costs. Explore real solutions. Why do we have small or large for that matter, school district offices, filled with staffs, superintendents and school boards. Make it a single state office. That alone would save millions. It might even standardize curriculum.

[Chisco]

Now THIS I would like to see discussed more.......if it works in California, then maybe the Congress will FINALLY take a look at it too.............

[mandy]

Everyone understand how the flat tax works? It taxes only income. The wealthy do not have 'income' like you and I do. Wealthy folks have tax free municipals, bonds, stocks, dividends etc. All of those money generating schemes are outside of 'income'. Guess who will be paying the taxes. Bingo. You and me. One more scam to pull the money out of your pocket and spare the wealthy. 15% is outrageous, especially for retired people and minimum wage workers. Add this to the already 15% cut by state workers and they get a whopping 30% cut. I see foreclosures in their future leading to less property taxes and well we all know how the cycle works. I am retired and can leave the state. I have friends who have already done so. It is either leave or purchase a pitchfork for the coming revolution.

[Derick]

Repeal prop 13. Or at least don't apply prop 13 to commercial properties. In addition to the benefits Sable Crow mentions above, this would put more tax revenue *directly* in the hands of local government and reduce local govt. dependence on the whims and intransigence of Sacramento.

[mandy]

For sable crow: I remember before prop 13 when the elderly were losing their homes, forced to sell because of taxes. The problem with prop13 is that it included apartment buildings and commercial buildings. Let's start by repealing the commercial property. I would also suggest we assess property taxes on churches. I am not sure why they get a free ride. Land before prop 13 was taxed on highest and best use. You have a house on the corner that would make a nice shopping center? Guess what happens to your property taxes. Do your homework. Research why things are the way they are. Check property taxes in other states like New Mexico. Also please research the flat tax. Stop being slaves to the 30 second sound bite on TV. Research, research, research.

[Raphael]

A flat tax is not radical or new--it's the same tired old arguments trotted out by the extremely wealthy when they don't feel like paying their taxes.

[Kate]

If I make $100k a year, I pay $15k.

If I make $20K a year, I pay $3k.

Am I missing something here or is the person earning $100k/yr paying $12k more than the "poor person" earning $20k/yr?

$12k isn't anything to sneeze at.

It's the dollars collected that counts, not the percentage. Don't penalize success, but reward it.

Posted by: Steven Moshlak

___

ANd if it costs at least $30000 a year to live in the city then the person making $20,000 and keeping $17000 is now in the hole $13,000.

The person making $100,000 and keeping $88,000 has $58,000 to spent on useless junk.

The first can not survive and the 2nd is not paying their share. And THAT result is inequitable and unfair.

The purpose of graduated income taxes is to leave the person with enough money to live and then tax the dicretionary disposable income.

Typical attiutde of the wacko greedy selfish right wing as exhibted by this poster. "Me me me mine mine mine...."

Quit whining about you and yours and dripping selfishness. The old adage is that 'to those who habe been given more,much more is expected. (And 'given' does not necessarily mean 'inherited' but also means having won the genetic roulette in terms of intellectual ability, the family roulette of a stable childhood, the educational roulettte of the quality of their early education etc etc etc.)

The world is NOT about 'rewarding' you for being greedy and selfish. The world is about responsibilities and duties. Whining and greed are SO vulgar.

ANd this type of person still expects restaurants to have waitresses and storesto have clerks to take his orders ring up his purchases. Selfish,self-centered and oblivious.

ONly someone as stupid as Schwartznegger would come up with a flat tax. It is, of course, beloved by the welathy since they do not:

(1) Have earned income- getting their income from stocks and money games instead which lowers their Federal income tax to 15% as compared to anywhere from 10-34% if they got the money by working a job.

(2) Pay payroll taxes as they don't get wages but instead get 'market' earnings.

[way]

Posted by: Airdave23 | June 05, 2009 at 02:59 PM
Liberals will never agree to a flat tax since they won't be able to tax the "wealthy" exclusively to pay for more social programs. Isn't that right comrades?

Besides, until our state government learns to add, it won't make a bit of difference where they get revenue from.

TAXES FIRST LEAVED ON ONLY WEALTH WHEN FIRST INTRODUCED IN THE UNITED SNAKES.

[Existenz]

Another horrible right wing idea from the Governor. If we want to get this state back on track, we won't do it by cutting taxes for the wealthy and hiking them for the middle class.

We need to repeal Prop. 13, eliminate term limits (which prevent us from having anyone with experience in Sacramento), eliminate the 2/3rds rule, and get these insane propositions under control. Right now a majority vote can dedicate billions to projects without any way to pay for it.

[From S.LA]

If I say this is racist or classist in some way, I'm going to be labeled a liberal radical and everything I say will be ignored... especially since this will tax EVERYONE EQUALLY! How much less racist and classist can you get with EQUALITY in place right???

But really...

Who is going to lose out on this? The wealthy who won't be able to afford that extravagant vacation and who will have to cut back to a smaller more local vacation or the poor who will leave their car (if they have one) sitting on their driveway and buy a bus pass to commute 3 hours to work leaving their older child (9 yrs old) to parent their younger siblings until they get home around 9-10p???

I really think we need to re-visit these terms of equality, equal, and really take a look at politics related to race, gender, and class in order to truly understand the disparities that exist today. Only then, can we truly understand how these seemingly neutral things really do affect us DIFFERENTLY.

Let's be a more critical people!!! Only then will we be able to look at these type of situations and be able to make a better decision in terms of who has more, who can stand to "lose" more, and what will TRULY contribute to reducing these deficits.

[Gorki]

I might consider same but only if other taxes were rescinded. Not more of the same.

[Christian]

Its a good idea. Relying on the wealthy is obvioulsy significantly unreliable 1) they move 2) shelter income 3) stop having income completely to minimize taxes by living off wealth. FLAT taxes taxes you when you buy things as well. Its a great way to stablize tax revnues and not burden one class of society unfairly - I'm sure someone feels like no one should be rich - we tried that and the USSR failed. LIFE ISN'T FAIR! The rich should not be polite in hiding their income or leaving like they have done in NYC and Maryland. People aren't pollite in demanding money from the successfuil so screw em. But the flat tax is the fairest system as the point of sale is where no one can run from and its reasonable enough for people to not leave the system.

[Frank W.]

I lived in California for 14 years. I want to improve my life a bit, and have English speaking neighbors, low taxes, no violent welfare recipients trying to kill me, and I want a healthy business environment.

SO....I just bought a flat in Hong Kong, and we are moving there in late July!

Goodbye, California and USA! Enjoy your Socialism! You most certainly deserve it!

[Fred]

If taxing the rich worked so well, would we be having this discussion ? Tiger Woods no longer lives here. My neighbor, living on Sec 8 subsidies, gets $2700/mo to pay a babysitter to watch her 5 kids. Medi-Cal pays her medical bills. If this sits well with some folks, fine. Get your check book out and quit whining!

[Dennis1960]

While I believe a flat tax would help California, no way would I agree to one so high as 15%. The progressive nature of California's tax code is chasing businesses out of the state, which leads to lower revenues. Increasing the tax tate to over 50% more than the current highest rate would be the final nail in the coffin. California didn't get into this mess because it undertaxes its people. It got into this mess because it spends too much, gave away the store to the unions, and taxed those that were funding their utopian ideas out of the state. If high taxes on those that produce were the answer, California would be in great fiscal shape. The facts of that are staring us all right in our faces.

[Fredrick]

A 15% flat tax? Why dont we go back to the gold standard. Of course my knowledge on this is in the 98% percentile of human intelligence. Let me save you some time: Stupid idea that wont work and I wont explain why since speaking technically about the economy and state funding is over your head.

[Steve]

Typical Republican "fair" taxation proposal...designed to soak the poor, the working class, and protect the trust fund crowd.

[Frank Lee]

I've got a better idea! How about a one time flat tax on net worth?

[Wayne]

Prop 13 is not the problem, folks. I forget who did it, but they ran the numbers from 1980-81, adjusted for inflation and population increases, and the state is still making up to 3x as much on property taxes.

[KD]

Mandy states "Wake up folks. A flat tax is only on income. The wealthy do not have 'income' the way you and I have income. They clip coupons, have dividends, bonds, tax free municipals and interest. That will not be taxed.

Obviously Mandy is mistaken, income is not simply a paycheck. Both dividends and interest are taxable by the IRS as, "income". Imagine that.

[Tony]

So Mandy, what makes you hate rich people??

Why don't you try to be one instead of wanting to punish rich people because, save for a few, most are better and smarter than you and earned their way there. Now that you've retired, you failed at making more money and that's your fault, just dont hate on rich people because you're not.

[Art in San Clemente]

Wow, interesting comments.

First of all, this reads like a huge tax increase, nothing else. 15%? What's the top incremental income tax rate? 11 I believe, but you've got to make well over $100K to get there, If you make $100K have a family, etc. you probably aren't paying much more than $5000 for State income taxes.

To Mandy: A flat tax is what you put it on. The idea that you put forth that it's only on income is nothing but pure guesswork. I think you can take it to the bank that a flat tax will affect all forms of income - salary, bonuses, dividends, interest, and considering we're in CA, the land of taxes, probably on your profit on selling a house too. (kiss that break good bye.

Then of course there's the simple fact that it would never pass without a minimum - say as someone else pointed out - $20,000. Thus the poor will continue to pay nothing for all the services they get...

Oh, and speaking of good bye, do enjoy Oregon, WA, or BC.

Next: Sable Crow!

OMG, kill Prop 13? apparently you have never met a "reasonable person" since you haven't met a person who can explain why two homes next to each other should have different tax rates. I'll give you two excellent reasons, then you can explain it to your friends.

One reason is typically "democratic" or socialist, whatever you wish to call it, and the other is republican or conservative...

1. Prop 13 prevents drives retired people out of the state: There would be about 10,000 people left in California who managed to retire before 1990 - all of them what you would call very rich. if Prop 13 hadn't passed I know folks that retired 20 odd years ago, their houses were worth, say $150K. those houses today - $700M. (1.0M 18 months ago). They would be facing over 4x the taxes, how many middle class and even upper middle folks retiring on typical savings 20+ years ago, could afford the $8K+ a year in taxes on their homes?
Only selected state employees, and of course, in particular, most retired fire and police. (Hey they've got a killer union!) So, #1 protects retirees.

2. From a capitalistic standpoint, a person in a community, for say 20 years, has been paying taxes all that time for all the usual services and infrastructure. The person who moved into the neighborhood last year, is getting the benefits of all those services - roads, schools, parks, (pick your favorites), even businesses, that came to exist because people before them paid tonnage in taxes. This doesn't matter if you are talking a small town, LA, or the whole state. And if the buyer doesn't feel he/she is getting their money's worth for the R.E. taxes they pay, well, they can bitch to the state, or offer less for the house.
Do you realize that most people who bought a house in California 25 years ago, were paying far less for their mortgage payments than they would pay in taxes for the same house today? Thank whomever for Prop 13. Or someone who did a 20% down and was paying say $600 a month mortgage for 30 years, would probably be paying at least $1000 a month in R.E. taxes.

To stu: Geez, you've got to get a grip. California has the HIGHEST Income tax in the US for anyone making over $100K a year, and, unlike most states, or even the federal government, they kill small biz, (most is individual income) by not letting them write off losses going forward.

When you are trying to turn around your small 2 or 3, or 1 person business, have a bad year and lose money, as soon as california sees you back in the black, the taxes pick up where they left off. Remember - 1/3 biz fail in their first 3 years, and most of that due to cashflow - which translates to the government taking a good chunk of meager profits.

Time for one more?
Next: Steven M. You are close to on the money. Put your message with the one below you from Ken, and you have what a flat tax would probably look at. But yes,

OK, enough of a rant. The biggest problem with the flat tax is that Sacramento, in implementing it would use bull and sleight of hand (like everything else they do) to convince is that they aren't raising taxes through the roof, but they will manage to. -art

[Matt Brooks]

Excuse me, I meant to say, unlike the Flat Tax.

[Soquel by the Creek]

Details please!

Is this 15% flat tax only a replacement for the Personal Income Tax (PIT)? If so, then it's excessive as the top PIT rate is about 10.5% and includes exclusions.

If this the flat tax is for PIT, sales tax, and property tax, then it might be attractive.

It still doesn't address the PROBLEM, which is TOO MUCH SPENDING.

[stealthspeak]

First: The flat tax would take away the politician's power to selectively control the population through targeted taxation. The politicians would never give up the power.

Second: Any change in taxation policy would ignore the fact that WE NEED TO CUT GOVERNMENT BY 30% inCalifornia to keep in line with inflation and population growth over the last 6 years.

Conclusion: It's not the committee that won't recommend, it's the legilature that won't accept due to decline in power and scope of government.

[Dorie]

"Wake up folks. A flat tax is only on income. The wealthy do not have 'income' the way you and I have income."

In CA capital gains are taxed at the state income tax rate. As long as this doesn't change it's fair. But 15%? A 50% tax increase for what we get? In his dreams.

[Broam]

Great idea. Like his redistricting proposal it's thoughtful, smart, and surprising. Forget the trial balloons. Just go for it.

Get it done, Mr. Schwarzenegger, and you will leave a political legacy that will overshadow your career as an action movie hero.

[Dan]

My, my. The wealth envy is disgusting in these comments. "Mandy" says: They (the wealthy) clip coupons, have dividends, bonds, tax free municipals and interest. That will not be taxed.

Well, "Mandy", I am by no means wealthy and I do or have all of these things. I am middle class. Believe me, like the wealthy, I get taxed.

What California and the entire country needs is the Fair Tax, not a flat tax. Those who take the time to learn about it and understand it realize that it is what will essentially UNTAX the poor, make life easier for the middle class and make the wealthy pay "their fair share". Job creation will explode in this country because foreign companies will swarm to the new US tax haven.

The sooner Americans learn about the Fair Tax, the sooner this great country will be better off.

[taphonomic]

Think how much money could be saved if California stopped doing stupid things like puttting up signs everywhere that say things like "The State of California has determined that such and such can cause cancer."

Instead of this maybe California could put up signs that say: "The State of California has determined that living causes death." or maybe it could just fall into the Pacific.

[mas]

A flat tax on all income (wages, capital gains, dividends, interest) makes a lot of sense and would help stabilize state tax revenue and spread the burden of state services. However, 15% is an abjectly ridiculous rate and implies marginal tax rates of over 50% for some people when federal taxes are taken into account.

This is called SOCIALISM and I am surprised it was suggested by a Republican governor.

[Mark Seidel]

Why not reduce our budget to 2003-04 levels of $100 billion? How does someone sign off on a $144 billion dollar budget? 44% increase in 5 years time. Historically unprecedented for the state and under a so-called conservative? Move on Arnie for we all know who wears the pants in your family.

[gymlock]

STOP WITH THESE FEAR TACTICS ON THE PRODUCERS IN THE STATE!!

[gymlock]

Round up the illegals like Ike did, and deport them. Stop giving them healthcare at OUR expense; stop educating their children at OUR expense.

[jan]

Always thinking taxes, yep that's the government. How about each family providing for their own? Novel idea. Stop education, and health care for illegals and send them home. Put the homeless to work doing what you pay someone to do and save money. Get rid of welfare for men and women who are able bodied. Make thieves pay back three times more than what they stole, it's called restitution. Excute murderers and child molesters. Make porn illegal to produce. It isn't that difficult, we did it for two hundred years.

[taxpayer]

I have an idea. How about cutting spending? If that doesn't work then cut spending more. Problem solved. People without jobs can't pay taxes. Welcome to reality.

[Sean B]

The devil is in the details.

If the 15% flat tax replaced only the current income tax, which has a far lower maximum rate coupled with deductions, it would solve the budget shortfall, but at what cost?

If other taxes remained constant (property taxes, sales taxes, vehicle license fees, etc.) and the flat tax was in place, then the state tax burden would exceed the Federal tax burden for most Californians.

At the 15% rate, and no deductions, the flat tax is a non-starter.

[Khadijah]

At the same time that flat taxation is a political football in the US, the developing countries of Asia are creaming us with it.

China - flat tax of 20%. Dropped it to 18% to stimulate the economy (Cutting taxes to stimulate? Political heresy here, economic fact everywhere else in the world).

Malaysia - flat tax of 18%.

Hong Kong, Singapore, all flat taxation (or very close to it.)

HINTS: Taxation reform proposals (all of them) have PROS as well as CONS. Our system of taxation doesn't make us prosperous; we are prosperous despite it. The rich/poor divide in the US is not caused by taxation that's not progressive enough (a look at countries with flat taxation is a simple enough way to prove that), but by an educational system that's REgressive, providing great schools for the well off and crappy schools for the poor.

If Johnny can't read, Johnny is always going to make minimum wage. Doesn't matter what you do to the tax system.

[Bob]

Simple fix. Learn to live within your budget. Good years you need to save, for the leaner ones. Waste not, want not.

[Patrick C.]

The idea that only the rich should pay taxes is exactly why California is in its present budget mess. I know that it's fun to dis the rich. After all, they're easy targets. They do not have a majority of the votes, so "tax the rich" schemes are easy to pass during an election. Yet there are only so many of them to go around, and many of them are fed up and moving to no-tax states like Nevada. So there are less and less rich people in California every year, especially now that we're in a recession. California's nearly exclusive reliance on an income tax to fund the majority of its programs is a flawed strategy, and you are seeing the results of it right now.

[Russ]

Let's see. 15 percent to California. 15.3 percent to payroll taxes. 20 percent to federal income taxes. That's 50.3 percent of my wages. Not worth it. I'll go on welfare.

[markiejoe]

Instead of a flat tax on people, how about just making ALL businesses pay taxes. The percentage of businesses in the State of California that pay no taxes every year is outrageous. Let's flat tax the businesses.

And then while you're at it, tax the churches. Every one of them, from the biggest richest mega-television evangelist cathedral to the smallest storefront "church" on Lankershim Boulevard. "Render unto Caesar what is Caesar's."

And suddenly, all the state's money problems are resolved.

[George]

Does not matter what the tax rate is and whether it's a flat tax or progressive income tax. You can't keep spending like a drunken sailor and expect everything to work it's self out. I live in Georgia and we have a state law that requires the state to run a balanced budget. That keeps us from getting into hot water. The governor just made all the departments cut 25% from their budgets. All the flat tax is is smoke and mirrors to mask the real issue of over spending.

[Teresa]

"A flat tax with a significant exemption ($20,000 or so) will not tax the wealthy and poor or even the middle class alike. In fact, it would be a perfectly progressive tax, with no penalty for earning more income. Someone making less than $20K will pay no tax, someone making $25K will only pay tax on $5,000, and somebody earning $1M will pay tax on almost all of it. The effective tax rate will increase with income."

EXACTLY!!! Thank you, Ken. Well said. If people would just open their minds to the idea of something new maybe then they could HOPE for CHANGE and actually get change!

[mikeyD]

15% ????????????????? Yeah ok boss....guess I'll be leaving the state.

[Dragon]

15%! They are out of their minds.

The legislature never stops spending and wasting money, and won't even commit themselves to a budget every year. They show no restraint. They are like teenagers with a credit card, except we can't stop them from spending and if we don't pay our bills they will cart us off to jail. And now they want 15%?!?

Even God only wants 10%.

[Huntingmoose]

*********************

NO FLAT TAX BUT EQUAL TAX

EVERYONE PAYS THE SAME DOLLAR AMOUNT OF TAX.

**********************

[Huntingmoose]

*********************

FLAT TAX IS A JOKE

SOMEONE WHO MAKES $100.000 PAYS TWICE AS MUCH TAX AS SOMEONE MAKING $50.000

THEY BOTH USE THE SAME STATE INFRASTRUCTURE, THEY BOTH HAVE EQUAL PROTECTION FROM THE STATE SO WHY PAY MORE??
************************

[John]

I'm sure a fair, simple tax system would be much appreciated. However, California still needs to cut its budget. Cut. Cut. Cut.

And Proposition 13 should be left alone. It was put into place for good reason.

[Steve]

Two words. STOP SPENDING,

[Huntingmoose]

GET RID OF INCOME TAX , JUST RAISE SALES TAX

[Tommy D]

Why stop at 15%? Why not 50%? Or 100%? That's the only thing that will satisfy the greedy politicians.

[brassmonkey]

Why dont you fools quite giving illiegal aliens FREE medical, free education, free this and free that and when someone gives them a job fine the employer $15000.00 and some jail and give the person who turned them in a $5000.00 reward
THEN maybe you can balance your budget.

[Ken Miller]

Raise the sales tax rate and apply it to ALL purchases including food and services; this will tax underground, or tax free income not saved (which is a significant element in California's economy). Exclude income under $40K from income tax and filing requirements; with a flat rate and no deductions or exemptions above that amount.

[Jay]

I live in NJ and were only a few years behind CA approaching fiscal disaster. A15% flat tax is absurd. Governorship here up for election this year and a candidate that proposed a 2.9% flat tax was tarred and feathered for wanting to tax the poor at the same rate as the wealthy ( I use that term loosely as the threshhold for wealthy decreases each year). The bottom line is government spending and benefits here are out of control. The only solution the politicians here come up with are tax increases. People are leaving the state in droves here. Meanwhile our "leaders" are spending money left and right on health and schooling for illegals anchor babies. I only wish we had a limit on property taxes like CA does.

[Tracy Whitworth]

Why don't all of you math-challenged citizens move to a state where you can get your groceries and housing for free? Give conservatives back the state we built.

"Progressive" taxation is another name for confiscating wealth and stifling growth. A REAL fair tax would mean all pay the same, say $500 a year.

"The more a person makes, the more they pay" still punishes those who work harder, We're willing to pay it and you demo-libs are howling. My Mexican lawn service will pay nothing because I pay him in cash, and he gets in-state tuition for his kids and food stamps.

Wake up, California.This is our chance to be great again. It's called incentive and hard work.

[John]

Why not just borrow what we need from Texas. They have a big surplus.

[J.D.]

Save money by DEPORTING ALL ILLEGAL ALIENS!

California could encourage reduction of the illegal alien population by:

- mandating E-Verify statewide

- ending sanctuary cities

- ending recognition of the matricula consular

- stopping banks from giving accounts and loans to illegals

- outlawing day labor illegal hiring centers

- mandating 287(g) programs

- requiring proof of citizenship for all state benefits

That would save BILLIONS!

To help out, just google:

NumbersUSA

Center for Immigration Studies

[phil]

Y'all left coast people just don't get it. The state will NEVER have enough income if the illegals are welcomed in and are given all the welfare benefits the politicians can hand out to get re-elected. The more illegals that are allowed in the more they will be pandered to, eventually controlling California.
Three Presidents, of both parties, have sent illegals home. This makes some jobs available to legal residents who really want to work and reduces a huge cost burden.
You don't need constant tax increases, you need to control tax expenditures.
phil

[Daniel Petry]

Thats right Mandy...what your people have been doing for years is working so well. Go for it. Just keep raising those taxes. That's why we moved our business out of California last year. Oh...and we took 123 jobs with us. Way to go.

[Raul Jones]

If they're gonna whine about the rich being taxed at the same rate as the poor, here's a solution: tax the poor at 10% and the rich at 15%. There.

[sudmuf]

California is not broke. Y'all have plenty of oil. So start exporting it again!

[dd]

CUT SPENDING

[PerryM]

Everyone of you owe $37,196.03 – your part of the $11.4 trillion dollar debt.

Who should pay this – not you, well then who?

If you live in America, you are protected by our armed forces, police, fire, and thousands of government agencies. Everyone needs to put in sweat equity into America – no exemptions for anyone.

Just where did you get the idea that someone else, “the rich”, should pay your way? That’s why we are in the mess we are now in – 50+ years of letting someone else pay your way.

A flat sales tax is the only just way to make everyone contribute to America. This needs to be put into an amendment to the constitution - the rate and just how much our governments can take from us.

[Major Mike]

A flat tax is good, a national/state sales tax in lieu of income taxes is even better. All who consume would pay, even those with hidden/untaxed criminal income, or those receiving under the table cash income - illegal aliens come to mind. Everyone would be a taxpayer, meaning everyone then would care about paying taxes. Right now about half of our population pay no income tax (Social Security/Medicare is not an income tax, it's a Ponzi scheme), and want the other half to pay more for everything. With a national/state sales tax, all income in essence is subject to tax because a tax is paid when it is used to purchase something. We already have the mechanism in place to collect and deposit sales taxes, and our tax code would shrink to one page. I'm a CPA, but I won't cry if thousands of CPA/tax lawyer jobs are eliminated and this wasteful burden is removed from our economy. Plus you Democrats, think of how many Democrats would be able to be appointed to government jobs by Obama when they don't have to worry about being tax cheats anymore!

[Geoff]

A flat tax that exempts the first 20K or so of income is a great idea. On both a federal or state level.

But if you guys in CA don't reign in your public employee unions it doesn't matter what you do.

[taxpayer]

Here's a radical suggestion: cut the state spending by 10%, 20%, 30%, whatever it takes to make the ends meet.

[Chuck]

The flat tax is not on income. The flat tax is a levy that only imposes taxes on what you buy. The more you buy the more you are taxed. Studies have been shown that once a person reaches a certain income level they stop spending as much, percentage wise, and start saving. The flat tax also taxes those who have no income. If you are a drug dealer, or hooker under the current system you are not taxed. The income of the state in this case would be unlimited since everyone would pay taxes and the better the economy is the more taxes the government would get. For most 15% would be a relief, so I would push the flat tax. The poor tend to spend all of their income in the first place, and the difference in the tax would not make them any poorer.

[Charlie Jobbins]

Wake up Californian's!!! This is being proposed because the State of California is broke!!! The State needs to raise its income tax to cover the reckless spending of our politicians!! Throw all of the State politicians out of office, and get peopel in that are willing to cut the fat from the State's budget!!! ie..(State Government Pension Plans are bleading the State dry of its income taxes.) Stop cutting funds from edeucation, the future of our State and Country's productive population... Sorry but someone has to finally point this out!!! Please act before it is to late for all of us...

[Rob Jones]

Flat tax!?!?!?! No way! We need something inordinately complicated, incredibly lengthy, and entirely bureaucratic! Plus, we really want to soak the rich in every way possible, with the hope that they'll leave the state, and make room for more homeless. You see, a flat tax just doesn't suit our priorities. It would be too easily deciphered by the public, and we simply can't have that..

[Kirk Ellis]

15% is absurd. How about extneding the Sales Tax to all goods and services, and using a 4% flat Income Tax to fill the gap ?

Taxing the wealthy with "progressive" taxes as some think is so wonderful completely ignores history. Historically, every time states target the "rich" with higher taxes, the "rich" move away.

Trying to get the "rich" to pay for everything isn't just morally "wrong", it is physically impossible. History has proven this.

Untaxing the working "poor" just creates larger and larger groups of voters that can demand more and more "free" government "stuff" because they know they won't have to pay for it.

[A Rothman]

This idea may work. But the governor has no credibility, so the idea will die. End of story.

[Bill]

Hey Mr. Governor, if you continue to drive producers (of jobs, products, services etc) out of California, who will be left to pay your stupid taxes? Whatever 'new. improved' sceme you 'devise' will always fail to account for the fact that YOU ARE FORCING BUSINESS OUT OF THE STATE.

Maybe the welfare recipients you love to bribe with ever-increasing amounts of my hard-earned cash will get together and force you to do the right thing! Oh yeah, forgot, they're too busy spending my money to care.

I hear Montana is nice.....

[Matt]

If all we had was a 15% tax I would love it. 9% income taxes and 9 percent sales tax is 18%. Prop 13 needs to go away too. Only corporations usually hold onto property over 50 years. They are the only ones benefiting from property taxes being fixed to sale time. I can almost guarantee that for every elderly couple that saved some coin with this prop that there were 20 companies the benefited more and for longer.

[Bob Giramma]

"But opponents dislike that it taxes the wealthy at the same rates as the poor."

Nonsense. Rich people pay more than poor people with a flat tax for the simple reason that rich people have higher income.

The fairest tax is a head tax, where everyone pays the same dollar amount. That is "equal protection under the law."

[RKT]

A 15% tax. Wow!!! How do Texas, Nevada, and Florida, Tennessee get by with 0% income tax. A lot of people griping here have only one person to blame for the mess California is in now. Just go in and look at yourself in the mirror. Voting all these "feel good" initiatives into law and now its time to pay the piper. You reap what you sow. Don't blame The Terminator, a lot of this was germinating before he even took office. You need to look at government salaries, pensions, and overall deprtments and seriously ask yourself how much you use these. No wonder you're losing productive citizens to bodering states. Get your act together!!!

[pdullea]

5% flat tax and public school tuition. no more dependent deductions or home mortage deductions. If you have and want kids, pay for em including their education. Prop 13 is a life saver for ALL property owners, new and old. It caps the multiplyer. Loose prop 13 and all you dual income 7 day a week wage earners won't be able to afford the ever increasing tax multiplyer and taxes.

[Dave C]

Don't fall for the flat tax idea, especially if it's like a VAT and invisible. Europe has a flat tax on everything you buy, but it's built into the cost of the item, so you never really know what you're paying. Prop 13 is what is killing California. I looked up the numbers the other day and compared Texas and California by state taxes collected versus population. California's revenue per person was actually lower, and Texas has no income tax. The difference is Texas has high property taxes, and has a simple exemption, or reduction for the elderly. The stupidity of your system where two equal houses can have widlely different taxes based on how long you live there is rediculous. That's why your income taxes are so out of whack.

[Dave, Orangevale, California]

Flat taxes can be made un-regressive!

Just tax all income without a single exception. Then take the poverty level for that family and give them a exemption of the tax rate times say 150% of that families poverty level. That way the poor family doesn’t pay any tax at all. And that rebate would be available for everyone.

Let’s say that the flat tax is 15%. So I as a single individual have a annual poverty level, as of 2008 of $10,326. So I would get a personal deduction of $15,489 from the government.

It doesn’t matter if I earned $100 or $100 Million for the year, that is how much my personal exemption is.

And best of all this tax is operated by negative feedback. As the government raises the “poverty” level to justify more spending for the “poor” people, they get less money, since the rebates will be higher. And if the government doesn’t raise up the poverty level, they have less justification for more taxes. So the poverty level would be roughly accurate, or at least more accurate than anything else used as a baseline.

If 150% isn’t enough, then it could be 200% or even 300%.

At 300%, my personal exemption would be $30,978.

[Dave]

No sympathy here. California can crash and burn, for all I care. Continue to be stubborn and not drill all that offshore oil, tax it, and be prosperous, well, bankruptcy is the economic Darwin award for that. Bailout? I'll defintely vote against any politician that votes for that.

[Wags]

The problem isn't taxes are too low, it's we spend too much! Prop 13 isn't going to be changed. I have owned my house for 19 years and paid my share of taxes. I even paid the bonds that brought me sewer, water, and the roads. No way are the majority of homeowners going to vote to raise their taxes.

We the voters spoke. NOI NEW TAXES, JUST CUT CUT CUT SPENDING

[smallbizgal]

Flat tax is a great idea! Fair tax is even a better idea.

15% is high though; they better at least abolish the current sales tax and all additional business taxes (like the stupid franchise tax).

Mandy: already in California, capital gains and dividends are taxed at full marginal rates. They are not given special tax rates unlike at the federal level. And under a true flat tax system, municipal bonds won't garner any special tax benefits. So your "concerns" about not soaking the rich are unfounded.

Sable : Prop 13 is fair because you pay property taxes based on your original purchase price, not a theoretical price. If an family bought a house 30 years ago for 50k, they are probably retired now. Without prop 13, their property taxes would be based on a house theoretically worth a million dollars. But where are they going to get the money to pay for the property taxes? Their only crime was they wanted to live in the same house for the rest of their lives.

Julie: Taxes on pot aren't the windfall you might think it will be. There are many unintended consequences that will happen. The most obvious are that the it will directly conflict with federal law which will provoke the federal government into refusing to give federal money to programs that are already collecting in California. This revenue loss alone will likely obliterate any possible gains from pot and make things even worse. Also obvious (learning from Amsterdam's current nightmares) is that organized crime will move in and start operations to smuggle drugs to other states and nearby countries. The chaos created by the surge of drug lords will cause pressure to mount to fight organized crime requiring a massive spending build up for police and anti-drug forces. And not to mention that DUIs will go up and costs will go to prosecution and jail expenses, not to mention the loss of life.

But if they really want to balance the budget. Here's a crazy idea: cut spending and spend within your means.

[Bert Bader]

"Am I missing something here or is the person earning $100k/yr paying $12k more than the "poor person" earning $20k/yr? "

Yes, you are missing that the person who makes $20k uses more of their income on needs than the person who makes $100k. It is called a regressive tax.

That said, I am all for taxing the poor. Tax money is used mostly on those who contribute the least to the general fund, so tax the first $50k at 25%, the next $50k at 20%, and stair step up.

Like a wise man once said, "I never got a job from a poor man".

[Donald Prolinered]

Want to see how the budget will get passed? For every tax imposed, cut 4 liberal programs. This way both sides got to give or lose something, and the budget will pass.

Want to have the companies continue do business in California and start hiring again? Give them incentives to do so by creating employment tax incentives. Reward the companies who hire and pay salaries that generate your much desired taxes. Or do nothing, lose tax revenues from both sides. Then work with furloughs, salary reduction, and backlash from your voters.

I just wonder what the frozen bureaucrats in Sacramento government will do when taxpayers, companies decide to leave California taking those precious tax money with them. They will be working with no salaries, and there will not be money to subsidize their politically motivated expenses.

On a last note, replace the state controller and state treasurer. These two individuals have had the most active part in misleading everyone, and were actively blocking any reasonable decision in deciding the budget. Their incompetence is beyond any thought.

[Joe]

Don't punish success? Maybe success doesn't have everything to do with making money. Maybe that's the point of taxing the hell out of hoarder greedheads. It should be affordable enough in this country again for a man to go to work and for his wife to stay at home. This is done by taxing the wealthy. And guess what, we'll still have abundance through technological innovation, which is where all this money came from in the first place--from geeks in labs and white coats, not from fat cats 'leveraging' their heavy assets.

[Daniel Pirotta]

Yes we can!

[upthecreek]

the public unions have killed this state... The unions Run this state...get rid of the public unions and get rid of California's problem.
Public Pensions are an Lead anchor on the budget.. No Hope...

Time To MOve.
Bye Bye Arnold.

[Mary Fornier]

15% is completely ridiculous!

That would be a huge increase. Arnold's last film would be of him being burned at the stake by California voters.