How would you change California's taxes? View The Bee's forum.
Here are some options for strengthening our tax system without sacrificing growth, shifting the cost of public services to middle-income Californians, or enacting a risky new tax:
• Selectively extending the sales tax to services while preserving exemptions for necessities. Revenues raised by taxing services could be used to lower the sales tax rate.
• Imposing an oil severance tax, bringing the state into alignment with other resource-producing jurisdictions.
• Repealing the corporate tax breaks enacted as part of the September 2008 and February 2009 budget deals. These tax breaks were part of backroom deals, were enacted without public comment or review, and provide massive benefits that California can ill-afford to a small handful of firms.
• Aggressively collecting sales and use taxes owed on electronic sales. This would help level the playing field for retailers that have a physical presence in California by ensuring that purchases from out-of-state retailers are subject to the same tax as those made from in-state businesses. The state can boost collections by requiring businesses that enter into "affiliate" relationships with in-state entities to collect California sales tax and by imposing the sales tax on digital downloads.
Ross is executive director of the California Budget Project, a Sacramento-based nonprofit research group.
