California - The Definition of Insanity

California’s Democratic leaders plan to unveil a budget proposal to erase a $19.1 billion deficit as early as next week that may include a 1 percentage-point rise in the personal income-tax rate. The increase would affect all taxpayers except those in the highest tax bracket, according to Senate President Darrell Steinberg, a Democrat. To make it more palatable to voters, California’s highest-in-the-nation sales tax would be cut simultaneously by 2.5 percentage points. Unlike sales levies, state income taxes are deductible from federal returns. The swap would add as much as $3 billion to the general fund.  “The idea is to increase some taxes that are already federally deductible and to allow taxpayers to take advantage of that while lowering some taxes that are not federally deductible, while the state general fund can gain $2 billion to $3 billion for education and other vital services,” Steinberg said in an interview yesterday. Read more here:

California - The Definition of Insanity