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Change California’s Tax Code?

Sacramento, CA — Whether to make changes to California’s tax system is up for debate in Sacramento.

Democratic Senator Bob Hertzberg has introduced a broad tax package that he estimates would bring California $10 billion more a year in revenue. He is calling for sales tax to be expanded to services in the state, with the exemption of health care and education. It could impact those that offer professional services, consulting, etc. However, he says it would not be applied to small businesses with under $100,000 in sales.

The legislation also calls for a drop in the corporate income tax rate, in an attempt to help the economy. It also calls for an increase in the minimum wage. Hertzberg was elected to the Senate earlier this year. He had previously served in the Assembly from 1996-2002. The final two years he was the Assembly Speaker.

Governor Jerry Brown was asked about Hertzberg’s proposal at last week’s press conference for the unveiling of the proposed budget. The Governor indicated that he was interested in taking a look at Hertzberg’s idea, but added, “Taxing new people is always difficult. So if you tell them that their Pilates class takes an 8.5 percent sales tax, they may not be as yoga happy as they were before.”

Hertzberg is proposing that the $10 billion in additional revenue be spread between K-14 education ($3 billion), The UC and CSU ($2 billion), local governments ($3 billion) and tax credits for low income families ($2 billion).