Tax Commission Proposal May Face Litigation over Two-thirds Vote Requirement
After yesterday’s session of the Commission on the 21st Century Economy it appears we are still a long way off from seeing a new, dramatically different tax plan approved for California. But when the plan does face a legislative vote will it need a majority vote to pass or a two-thirds vote required for tax increases?
Commissioners underscored the uncertainty of what a new Business Net Receipts Tax would produce in revenue. The BNRT is the key to the new tax plan. Revenue raised by the BNRT, which would include capturing taxes on services as well as goods, will be used to offset tax cuts in the proposal. The plan calls for elimination of both the corporate tax and the state portion of the sales tax and lowering the personal income tax rates.
The goal of this revenue-balancing act is to produce a package that is revenue neutral. The search for revenue neutrality is an important legal distinction because the legislature would mark the proposal as a majority vote bill.
It’s Deadline Time for a Water Deal
If the Legislature was waiting for the pressure of a deadline to spark some action on heavyweight issues like water, prison reform and energy policy, now’s the time.
On the last day of the 2009 legislative session, it’s agree now or hold your peace for another year.
For weeks, legislative leaders and Gov. Arnold Schwarzenegger have been talking about the desperate need for action on some of California’s most important problems. The governor even vowed this week not to sign any bills, telling the Legislature it “must act on the major issues facing our state” before considering any other issues.
That threat hasn’t stopped the Legislature from passing the usual session-end flood of bills, but it did focus attention on some of the major points of concern for the governor.
Endorsing After the Sell-By Date
After sitting through three hours of Thursday’s tax commission meeting at UCLA, I’m less than confident that the body’s recommended package (an important compromise) has any prayer of passing the legislature.
But I do know one thing: the tax commission needs a time machine.
As part of its package of tax changes (flatter income taxes, a phase-out of sales and corporate tax, and the establishment of a business net receipts tax), the commission included a proposal for a rainy day fund.
If that sounds familiar, it should. A rainy day fund was part of Prop 1A, which was defeated by voters on the May 19 special election ballot.
The rainy day fund proposed by the commission is eerily similar to the Prop 1A fund. So much so that the commission seemed to be endorsing the measure – nearly four months after the election.
This may set some kind of political record for tardy political endorsements. As observers of the commission pointed out, the body discussed whether to endorse Prop 1A before the election but declined, out of political caution. Which is fine.
Now what they need is to find some way to send their endorsement back in time.
Not that it would have made much difference in the election.
Tell Your Congressman to Vote Yes on the Travel Promotion Act
I
want to applaud the U.S. Senate for taking a major step toward strengthening
the American economy by passing the Travel Promotion Act this week. This law,
if passed in the House, would create a public-private partnership to promote
the United States as a premier international travel destination and communicate
U.S. security and entry policies.
As mentioned in a
previous post, America’s travel industry is at a disadvantage because we are the only major country without a
national tourism promotion budget, putting us behind even so-called "third
world" countries that set aside funding for television advertising campaigns in
many parts of the world. The Travel Promotion Act would bring the U.S. into the
21st century of global tourism marketing, which will help raise our profile, ease
international concerns about perceived U.S. entry hassles and reassure visitors
that we are working hard to make it easier to get here while protecting our
borders.
Time to Pick the Low Hanging “Grapefruit”
The Free Trade Agreements (FTAs) with Colombia and Korea are two immediate opportunities to create jobs and economic growth across the nation. And no region will benefit more from free trade with these two nations than Los Angeles. Unfortunately, more than two years after both agreements were signed by negotiators, neither has been ratified by Congress due to political concerns about labor and environmental issues in these nations.
Colombia is the United State’s fourth-largest trading partner in Latin America and the largest market for U.S. agricultural exports in South America. Just a few years ago, U.S. growers exported $11.4 million in fruits and vegetables including grapefruit to Colombia. Free trade with Colombia will help create more exports and more jobs here at home.
Despite the fact that Colombia has made dramatic progress in improving security for its citizens, U.S. officials contend that Colombia must do more to address issues of violence against union leaders. Everything possible should be done to protect Colombian citizens, but holding trade hostage only hurts workers and legal businesses in both nations.