1.  Several Weaknesses Exist: An  Introduction to Some of the Problems  
See web page or pdf file.

a.  Most of these weaknesses can be solved by fixing the tax base - they cannot be solved with a rate increase. A rate increase would make most of these problems worse.

• California Tax Problems - a short summary (web) (pdf)
• Tax Reform Possibilities of California's New Super Majority, BNA State Tax Blog, 12/4/12 
• Revamp tax laws to support California spending, San Jose Mercury News 8/20/07 
  ​(examples of ways to improve California revenues as one way to address spending needs)
• California Tax Changes: Math versus Strategy, California Progress Report, 12/5/08
• Testimony before CA Assembly Revenue & Taxation Committee, 1/13/10

b.  Analysis of California's Tax System Using Criteria Established for the 21st Century Economy Commission (pdf) [coming soon]

2.  Sales and Use Tax: Issues

a. Tax Base is Too Narrow (web) (pdf) (podcast)

• California Use Tax Exemption for Foreign Purchases Should Be Repealed, State Tax Notes, 6/9/1
• Lower the sales tax - but reform what gets taxed, San Jose Mercury News, 7/24/11
• Testimony before the California 21st Century Economy Commission, at UCLA, 2/12/09
  • Powerpoint: "Considering a Broader Sales & Use Tax Base"
    
  • Report: "Sales and Use Tax Weakness & Possible Remedies: The Tax Base is Too Narrow and Should Be Broadened"   [updated version]
• Taxing Some Services Could Help if It's Fair and Simple, San Jose Mercury News, 6/29/08
• Taxing Digital Products - Let's Also Use the Technology to Modernize Collection, blog 6/23/08
• Testimony before the California Assembly Revenue & Taxation Committee, 4/7/08
• Obstacles to Taxing Services — Are They Insurmountable?, AICPA Corporate Tax Insider, 2/28/08
• California's 20th Century Sales Tax, Los Angeles Times 7/18/07
• Download or pick up: Why is one tax-free?,  San Francisco Chronicle 7/11/07b. 
    
  

b. Challenges in Collecting the Use Tax & Possible Solutions (web) (pdf) 

• Paper presented to legislative and BOE staff, February 2013. Note - Suggestion B of this paper was enacted by AB 1593 (Chapter 563, 10/7/17), effective starting with 2017 Forms 540.
  ​[Similar to testimony (by phone) before the State of Vermont Sales and Use Tax Study Committee, 10/15/12, on State Solutions to Collecting from Remote Sellers.]
• Testimony submitted to CA Assembly Revenue & Taxation Committee for 2/28/11 hearing on the California Use Tax Gap
• Use Tax Reality, California Progress Report, 3/23/09
• The Practitioner’s Role in Use Tax Compliance, AICPA Tax Insider, 8/9/07
• California's Use Tax Collection Challenges and Possible Remedies, California Tax Lawyer, Fall 2007 
• 
  

c.    Pyramiding Nature of the Tax (web) (pdf)

d.    Nexus Uncertainty (web) (pdf)

• Nexus Confusion: Sales and Use Tax, AICPA Corporate Tax Insider, 9/27/07
• 
  

3. Personal Income Tax Weaknesses

a.  The tax is too volatile  (web) (pdf)

• 'Spending problem?' - some of it's hidden in our tax laws, San Francisco Chronicle, 2/10/08
• Know New Taxes (a look at environmental taxes), San Francisco Chronicle, 9/19/07 (one possible partial solution)

b.  Complexity due to lack of conformity with federal rules, various special rules and not using simplification techniques  (web) (pdf)

• Too many costly and unnecessary tax breaks (web) (pdf)  Testimony delivered to CA Committee on Revenue & Taxation and Committee on Accountability and Administrative Review, 2/23/12 hearing on tax expenditures
• 'Spending problem?' - some of it's hidden in our tax laws, San Francisco Chronicle, 2/10/08
  ​

 4.  Corporate Franchise Tax Issues​

• Conformity with the federal income tax is low  (web) (pdf)
• California's tax loopholes that aren't, San Diego Union Tribune, 7/11/08
• Looking for a Better State Business Tax, AICPA Corporate Taxation Insider, 10/29/09
  ​
  

5.  Property Taxes Reform Considerations

• Splitting the Roll   Real Estate Taxation, 3rd quarter 2004
  
  

 6.  Alternative Taxes

• Know New Taxes (a look at environmental taxes), San Francisco Chronicle, 9/19/07
  
• 
  

 7.  Telecommunications Taxes (2003 policy brief by Prieger, Sexton and Nellen)

• Taxes have not kept up with changes in technology 
• State and local simplification is possible through coordination 
  
  

 8.  Strategy and Accountability Needed

• Suggestions for Improved Transparency and Accountability of California Taxes Via Improved Tax and Budget Literacy, January 2020, published in California Tax Lawyer
  
• A Tax Commission for California? How It Can Be Made to Work, California Progress Report, 7/27/08
• California Tax Changes: Math versus Strategy, California Progress Report, 12/5/08
  
  

9. Chokeholds on the Tax System (budget restrictions, earmarking, etc.)

• Don't link school spending to oil companies' profits, San Jose Mercury News, 3/21/08  

21st Century Taxation

Tax Reform - Modernizing Tax Systems,      Following Principles of Good Tax Policy ​

California Tax Reform

​​HOME                       Copyright © 21st Century Taxation. All rights reserved.

California's Tax Issues and Solutions

• 21st Century Taxation Blog
• Apple Settlement Shows Why California Needs a Sales Tax Overhaul, Bloomberg Tax Insights & Commentary, 11/14/24
• State Tax Law Opportunities to Address Inequality, Joint Venture Silicon Valley Blog, 11/6/24
• 3 Questions to Ask When Congress Wants to Change Your Taxes, Barron's, 3/8/21
• Suggestions for Pandemic State Tax Policy Endurance, Tax Notes State, 12/17/20
• Suggestions for Improved Transparency and Accountability of California Taxes Via Improved Tax and Budget Literacy, January 2020, published in California Tax Lawyer
• Prospects for California Tax Reform, Bloomberg BNA's Tax Management Weekly State Tax Report, 3/22/13
• California's Proposition 26 and IRC Conformity, BNA State Tax Blog Guest Post, 1/22/13
• Tax Reform Possibilities of California's New Super Majority, BNA State Tax Blog guest Post, 12/4/12
• Testimony delivered to CA Committee on Revenue & Taxation and Committee on Accountability and Administrative Review, 2/22/12 hearing on tax expenditures
• Testimonydelivered to CA Assembly Revenue & Taxation Committee hearing on incentives for job creation and innovation, 12/5/11 held at San Jose State
• Testimony submitted to CA Assembly Revenue & Taxation Committee for 2/28/11 hearing on the California Use Tax Gap [see updated paper of 2013 here]
• Testimony before CA Assembly Revenue & Taxation Committee on 1/13/2010 for informational hearing on alternatives to the COTCE recommendations (pdf).
• California Tax Problems - short summary (pdf).
• Commission on the 21st Century Economy:
  1. How to Evaluate the COTCE Proposals, California Progress Report, 9/24/09
  2. Sane Taxation? , The Press-Enterprise, 10/11/09
  3. Information on business net receipts tax (BNRT) proposal
• Broadening the CA sales tax   (See Sales and Use Tax Issues below)