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1 Joseph Henchman, Golden Opportunity: California's Budget Crisis Offers a Chance to Fix a Broken Tax System 1 (2009)

handle is hein.taxfoundation/ffbhaxz0001 and id is 1 raw text is: FFISCAL No. 170 FACT A Golden Opportunity: California's Budget Crisis Offers a Chance to Fix a Broken Tax System By Joseph Henchman Fiscal Fact No. 170 Executive Summary On May 19, Californians will go to the polls to vote on six statewide ballot propositions related to the state's budget problems. The headline initiative is Proposition 1A, which will extend a series of tax increases due to expire in 2010 and institute a rainy day fund. No one observing California's fiscal situation has suggested that its enormous short-term budget deficit results from a reluctance to tax. Rather, it is a result of trying to keep spending commitments that were based on na'fve assumptions about tax revenue growth from the boom. Ultimately California will need to reprioritize those commitments. The tax increases in Proposition 1A can be viewed as buying time for this reprioritization, or more likely, they can be viewed as buying time to put off the hard choices. These tax increases are on top of what were already high taxes, especially for the individual income tax, corporate income tax, and sales tax. The high rates and collections from these taxes harm California's long-term competitiveness and economic growth. With respect to the so-called millionaires' tax on individuals, the idea of paying for broadly available public services through

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