Now Is the Time to Fix California’s Messed up Tax Code

The California tax code is about as healthy as the federal tax code. In other words, it needs a lot of work. Of course, there are many interested parties that are all hard at work trying to create plans that will help improve the state’s economy and tax revenue while helping those from the lower and middle class improve their overall financial outlook.

There’s no end to the powers that are trying to push their agenda to keep California moving in the right direction. The state has shown several positive signs of recovery, thanks in part to the governor’s Proposition 30 that raised the top income tax rate by nearly one-third and increased the state sales tax by about 3 percent. As for the increase on the state’s top earners, that gave California the highest personal income tax rate in America. The sales tax increase pushed means the state also has one of the country’s highest sales tax rates.

The sales tax boost in Prop 30 is set to expire in January of 2017, while the income tax increase is set to phase out two years later. While governor Jerry Brown has stated that he does not favor an extension of Proposition 30, there are other powerful groups and lobbyists that are already proposing such extensions. Meantime, many others are working on other proposals to help improve the tax volatility in the state.

Two panels of tax experts, the Think Long Committee and the Commission on the 21st Century Economy, are proposing completely revamped tax codes that will smooth out California’s revenue and promote growth at the same time. While opinions differ on how the state should continue to promote growth and keep a steady flow of tax revenue coming in, the real issue is fixing California’s entire tax code.

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