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Commission delays plan on overhauling state tax system

July 16, 2009 |  5:40 pm

A commission appointed by the governor and legislative leaders to devise a plan for changing the state’s tax system concluded Thursday that it will not be able to complete its work by its July 31 deadline.

Its members agreed to ask for an extension to at least Sept. 15.

"It will be impossible for us to come up with meaningful, well-thought-out recommendations by July 31," said Gerald Parsky, chairman of the Commission on the 21st Century Economy.

The group's goal is to simplify California’s tax system and reduce its volatility. Its members are considering new taxes on fuel and oil extraction, tax increases on commercial property now prohibited under Proposition 13 and a flat personal income tax of 6% -- all of which have drawn heated debate. 

Additionally, the panel is taking a close look at replacing sales taxes and corporate income taxes with a simpler tax on the net receipts of businesses. Also under consideration is extending sales taxes to services, such as those provided by attorneys and accountants.

The panel hopes to have a complete proposal in time for the Legislature to act on it before adjourning for the year in the fall.

—Patrick McGreevy in Sacramento