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Senate Democrats put forward tax proposals

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Democrats are beginning to put forward their counter-proposals to Gov. Arnold Schwarzenegger’s budget spending plan. Here’s a hint: The Democrats’ plans involve tax increases.

Earlier this month, an Assembly committee authorized $5.5 billion in new tax increases. Now, Senate Democrats have countered with a plan of their own -- a $4.9-billion package of delayed corporate tax cuts and new taxes.

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Like the Assembly committee, the Senate Democrats’ key proposal involves the suspension of more than $2 billion in corporate tax breaks set to go into effect this year. Those tax cuts were passed as part of a 2009 budget agreement. Senate Democrats also want to increase the state’s vehicle license fee, delay the rollback on an income tax surcharge and raise taxes on alcohol.

[Updated 2:24 p.m.] Schwarzenegger spokesman Aaron McLear used the occassion to once again make the case for reforming the state’s pension system. “It is unfortunate that the Legislature’s first instinct is to raise taxes before addressing the unsustainable costs of employee retirement benefits, which will be $4.5 billion next year,’ he said. ‘After the largest tax increase in our state’s history we cannot ask California taxpayers to continue to pay for Sacramento’s mistakes.”

-- Anthony York in Sacramento

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