At the request of the Senate Governance and Finance Committee, the Board of Equalization’s Research and Statistics Section today released a report showing the State of California could reap up to $122.6 billion by imposing sales and use tax on services.

The size and scope of California’s service-related industry is mind-blowingly large, and the last thing overtaxed Californians need is another tax. In fact, these numbers are dangerous in the hands of legislators who want to raise taxes.

However, I hope this report stimulates conversation about how taxes can be simpler, and how we can attract more jobs to our state.

Although I strongly oppose Senate Bill 8 (Hertzberg), which would impose a $10 billion tax increase on service industries, I am open to considering a broader sales tax if it’s part of revenue neutral tax reform, such as abolishing the Franchise Tax Board and California’s income tax, along with other taxes that destroy jobs.

I’ve called for dynamic economic modeling that would show the benefits of such a change and look forward to being able to share those results with you… Read More

Today during the 2015 Cal Tax Annual Members meeting, I called for a meaningful public discourse on tax reform ideas that make life easier for taxpayers. Specifically, I suggested replacing California’s income tax with a sales tax on services.

As you may know, Senate Bill 8 (Hertzberg) seeks to extend California’s sales tax to services. As currently written, the bill amounts to nothing more than a massive tax increase that would just make California less competitive while adding thousands of state auditors and tax collectors to state payrolls.

Reform, by its definition, should not include growing government or making taxes more complicated.

Any shift to a broader reliance on sales tax must be combined with real tax reform that removes barriers to doing business in our state. That’s why I proposed eliminating California’s personal and corporate income tax and the Franchise Tax Board. One less tax agency would make California a far more attractive place for jobs, retirees, and investment.

If California eliminated income tax, more… Read More

Senior citizens deserve to enjoy the rewards of their life’s work, but rising taxes and inflation leave many feeling squeezed.

California seniors know about discounts at restaurants and the movies, but they may not be familiar with the tax benefits and services available to them. For example, many seniors qualify for property tax exemptions, income tax credits and free income tax preparation.

That’s why I created the new Tax Help for California Seniors webpage. This online resource provides helpful information and links designed to help seniors be aware of important tax tips relating to property tax, sales and use tax and income tax.

Please take a look at this new online resource and consider sharing it with your family and friends who are seniors.… Read More

Californians who sold their home in a short sale in 2013 may be at risk of overpaying their state income taxes.

As you may recall, the Franchise Tax Board informed me late last year that Californians who had mortgage debt forgiven in a short sale are not required to pay income tax on that debt.

I’ve recently learned that some tax preparation software may not be up to date, potentially forcing affected Californians to pay taxes they don’t owe. Adding to the confusion, some tax preparers may not be aware of this problem.

If you have questions, please contact my office at 1-916-445-2181. For more information on mortgage forgiveness debt relief and short sales, go to FTB’s webpage or call FTB at 1-800-852-5711.

If you are unsure whether your tax preparation software is calculating your short sale correctly, you should contact the tax preparation software company’s customer service department for assistance.

Taxpayers should never have to pay more taxes than they owe. Be sure to look carefully before filing to avoid overpaying… Read More

The Legislature should be commended for approving an on-time budget and exercising some measure of restraint.

However, the success of this budget hinges on the decisions of a very small number of overtaxed Californians, their continued presence in California and their success in the stock market.

According to the Franchise Tax Board, the highest one percent of income earners will pay more than $2 billion less in 2013 than 2012. That’s not surprising. A recent survey found 75 percent of affluent Californians are planning actions to reduce their tax liabilities—and a quarter are considering moving out-of-state.

It’s troubling that the volatile personal income tax accounts for 63 percent of budget revenue. Just one percent of California taxpayers now provide nearly half of all income tax payments the state receives.

You can’t tax your way to prosperity. To create true budget stability, California must attract jobs and investment to our state rather than drive them away.… Read More