With the exception of property taxes, California tax rates are among the highest the nation. According to the Tax Foundation, “California ranks 49th in the Tax Foundation’s State Business Tax Climate Index.” Its “Top Individual Income Tax Rate Is Third-Highest in the Nation.” Its “Corporate Income Tax Rate is the Highest in the West”. (” Nationally, only 8 states have a higher top corporate tax rate than California.) And its “Sales Tax Rate Is Highest in the Nation.”
Given all this, you’d think that the state’s leaders would be looking for means to reduce the tax burden in order to keep businesses in the state and encourage them to expand, jumpstarting the economy and creating jobs. Yet, when it comes to fixing the state’s fiscal mess, Democrats have sought to balance the state’s budget by a combination of tax extensions and budget cuts. Governor Jerry Brown, to be sure, has done yeoman’s work in rooting out wasteful state programs, but he hasn’t touched public employees’ compensation or considered significant reforms to their pension program.
Seems he’d rather raise taxes than risk offending those who paid for his party’s Get-Out-the-Vote operation last fall.
He has balked at Republican proposals to balance the state budget without extending tax hikes. According to Allysia Finley in this morning’s WSJ.com Political Diary (available by subscription), the Democratic governor “insists that an all-cuts budget is a non-starter.” Interesting that he’s not even willing to consider a budget that attempts to hold the line on state tax rates.
Wonder why he has such a knee-jerk reaction to a budget plan that holds the line on taxes.