A Slow Motion Tax Reform?

Joe Mathews
Connecting California Columnist and Editor, Zócalo Public Square, Fellow at the Center for Social Cohesion at Arizona State University and co-author of California Crackup: How Reform Broke the Golden State and How We Can Fix It (UC Press, 2010)

Are Gov. Newsom and the Democrats pursuing a tax reform without actually declaring it?

Conventional wisdom is that a big tax reform is impossible politically. It’s just too big a target for too many interests. Gov. Brown seem well positioned to pursue such a reform, but openly admitted that it was too heavy a lift for him.

Gov. Newsom, however, campaigned in favor of tax reform. But he has not yet pursued it.

Or has he?

Newsom has embraced many of the smaller pieces of a possible tax reform package—but not as a package individually. His approach has been to embrace taxes and fees that create revenue streams for certain things—a tax for cleaner drinking water, a higher payroll taxes to help paid family leave, and an individual health mandate. He also has targeted tax cuts for diapers, tampons, marijuana and a few other things. And he’s embraced opportunity zones, a new federal program under the Trump tax bill that will require changes in California taxes to match the federal setup.

On top of Newsom’s moves towards tax changes are Democratic ideas for taxes on soda, firearms, and oil and gas, and various new fees for various reasons.

Does it all add up to tax reform? Maybe not yet. But the 2020 ballot could be a place for other tax changes, notably the split roll.

It’d be easy to see many of these tax changes passing, either in the legislature or on the ballot, and Newsom claiming to have reformed the tax system. And it would have been done without taking on the political risks of a tax reform package.

Of course, a well-designed and integrated package would be better. But is it possible?

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