According to an analysis by Standard & Poor’s, as the income gap has widened over the years, growth in state tax revenue has declined, from 11 percent annually from 1950 to 1979 — before the income gap began to noticeably widen — to 7 percent since 2009. Bottom line, according to the report, “increasing income inequality is undermining the rate of state revenue growth” in California and nationwide.
Her remarks added to a series of statements that began trickling out from the Capitol early this year and have intensified heading into the Nov. 4 elections. The issue, arising now in interviews, candidate questionnaires and debates, is likely to become a major point of controversy in Sacramento in the run-up to 2016.
The California Tax Foundation on October 1 released the state’s first comprehensive study of California parcel taxes, identifying more than $1.9 billion in parcel taxes imposed annually on property owners.
Providing California families and businesses the infrastructure we must build to make possible the future they want, will require a 15-year investment estimated at $500 billion or more. The question is not whether we make that investment. It’s imperative we make it: After all, more than 38 million people live in California today, but we’ll have 50 million neighbors by the end of the next decade. The question is how we make the investment affordable.
The State has to be smarter about the way it plans and finances infrastructure development. Our current approach is too ad hoc. Voters and the Legislature authorize bonds for particular programs with little thought given to how those bonds fit into a larger infrastructure picture. We need to think longer-term and more strategically. Along those lines, my office has proposed the State develop a 25-year infrastructure master plan that would prioritize projects and provide a financing blueprint. We still think that’s a good idea.
Long-term state and local infrastructure financing also should be more fully incorporated into the year-by-year budget process. It should be stacked up against other public services, prioritized relative to those services and funded commensurate with that priority. State, local, Federal and private funding sources need to be considered and carefully coordinated to get the best infrastructure for Californians at the lowest possible cost.
It’s no small matter. The top 1 percent of California income-tax payers now finance a third of the state’s general fund, so their ability and willingness to pay taxes is central to the state’s fiscal health.
Crumbling and congested U.S. roadways are driving up costs for U.S. manufacturers as late deliveries and unreliable transportation undermine hard-fought gains in production efficiency, according to U.S. manufacturing executives.
A few steps from the concrete footprints of Clark Gable and Bette Davis, the Democratic governor took the front-and-center seat among a crowd of dignitaries to celebrate the tax break he had come to sign into law at a desk below the theater’s decorative dragons.
Compared with local governments, which rely to a greater extent on property taxes, states generate the bulk of their revenue from taxes levied on current economic activity, namely personal income and consumption. Therefore, when the economy operates below its potential, state tax revenues tend to suffer. Insofar as income inequality contributes to economic output falling short of potential, it undermines the growth of states’ tax bases.
Our analysis found a negative relationship between income inequality and state tax revenue tends. When we tested the relationship by tax structure, we found the negative effect was stronger and only statistically significant in the sales tax-reliant states. The findings support our view that rising income inequality contributes to weaker tax revenue growth by undermining the rate of overall economic expansion.
With each day, it seems, another accident illustrates the cost of deferred maintenance on public works, while offering a frustrating reminder to this cash-strained municipality of the daunting task it faces in dealing with the estimated $8.1 billion it would take to do the necessary repairs. The city’s total annual budget is about $26 billion.
Part of the attraction is the substantial tax reforms that occurred over the last 15 years in Canada. First among these is the dramatic reduction in the corporate tax rate, from 43 percent in 2000 to 26 percent today. The U.S. currently has a corporate tax rate of 39 percent, but lawmakers are reluctant to do what Canada did, i.e. lower the tax rate, for fear of losing tax revenue.
The agreement increases the tax credit to $330 million a year for the next five years. It also replaces the current lottery system with a ranking based on how many new jobs a production creates. While the agreement falls short of the $400 million approved by the Senate Appropriations Committee two weeks ago, it more than triples the current tax credit of $100 million.
The U.S. economy earlier this year recovered all the jobs lost during the recession, but those new jobs pay an average of 23% less than the ones lost in the downturn, according to an analysis released Monday by the U.S. Conference of Mayors.
A first-time analysis of projects that applied to the Program but were denied due to insufficient availability of tax credits. Of those projects that were subsequently produced, a small minority elected to shoot in California without benefit of the Program. Instead, the overwhelming majority of projects denied for California tax credits opted to shoot outside the state in jurisdictions where tax credits are available.
Officials have long known that hundreds of miles of city water lines have deteriorated and need replacement, with many past the century mark. But in recent years, L.A.’s elected leaders have been unwilling to hike water rates enough to fix them more rapidly. As it stands, the city-owned Department of Water and Power is on track to replace main water lines only once every 300 years.
Lockyer called taxes directed at higher income earners “unfortunate” and taxes were too high in California, a comment that drew applause by several of the executives in attendance.