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Governor Newsom Suggests Structural Tax Reform Possible

Tuesday, February 19, 2019  
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Governor Gavin Newsom may decide to work to overhaul California’s tax system given a ballot deadline to revise the state property tax. The ballot measure would enact a so-called ”split roll” and remove most commercial properties from reassessment protections created by Proposition 13.

Recommendations by a bipartisan commission in 2009 for a similar proposal went nowhere, but there is a general recognition among policy makers that California’s heavy reliance on income taxes is not healthy because it depends so much on capital gains and the most wealthy Californians who can shelter income or move. Of course, shifting taxes to the poor has no real support either. This standoff has meant the issue of structural tax reform simply has not been addresses by California’s political leaders.

Newsom has some room to maneuver since a 2014 law that allows backers of an initiative to cancel their efforts after turning in signatures. This relatively new political maneuver has already shown its effectiveness in the passing of the California Consumer Privacy Act (CCPA), which was enacted by the Legislature last year after the initiative’s backers agreed to pull a pending proposition from the November 2018 ballot. California In the case of tax reform, opponents of the split roll measure may believe that a strong ballot campaign may defeat the initiative and be reluctant to bargain.

California Land Title Association

1215 K Street #1816 Sacramento, CA 95814-3905
Email:  |  Phone: 916-444-2647  |   Fax: 916-444-2851