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    ashleychi

    Posts : 230
    Join date : 2009-09-02

    New CA Tax System

    Post  ashleychi on Mon Oct 05, 2009 11:06 pm

    California’s economy is in a dire state, but is a radical new tax system the solution to this problem?

    On Sept. 27, the “Commission on the 21st Century Economy,” a committee charged with the task of updating and reforming California’s tax system, proposed a new tax plan that has never been tried on a wide scale in the US. After spending a year looking at ways to bring California’s tax system up to par, the commission found that the system is out of date, putting the state at a disadvantage. This is why the commission has suggested a completely new system, which will change the personal income tax structure and eliminate sales taxes and corporate income taxes.

    California’s tax system originated from the Great Depression, when small manufacturers produced items that were subject to a sales tax. As recently as 1950, revenue from sales taxes provided nearly 60% of the state’s profits. However, California’s economy has shifted to one mainly composed of service industries- lawyers, engineers, and other professionals, whose sales aren’t taxed. Therefore, California has been depending heavily on income taxes, which grew to more than 53% of state revenue in 2008. The core of the new tax system will tax businesses on their business net receipts.

    The logistics of the plan includes greatly reducing the personal income tax by lowering the tax rate for anyone making more than $56,000 a year from 9.3% to 6.5%. There would be an extra 1% tax on any incomes exceeding $1 million to fund local health programs. The only other rate, 2.75%, would be for taxable incomes up to $56,000 for couples. The current income tax system provides 55% of the state general fund, compared to the 32% the new plan would generate.

    To make up for the lost income, the committee proposed a never-tried-before idea: a business net receipts tax. The panel declared it not fair that the quickly expanding service industry isn’t part of the tax base because it benefits from government services. This new business net receipts tax would take 4% of receipts from sales, but not the cost of salaries and benefits,

    Many tax experts and organizations who oppose this plan say that the new business net receipts tax is too broad and “uncooked.” Tax experts say that it probably needs years of refinement, mainly because this new business tax has never been tried anywhere in the world. Many also say that it’s unwise to replace our 70-year-old tax system with a novel experiment. Lawmakers also say that it’s absurd to reduce the tax rate for people with very substantial incomes.

    On the other hand, lawmakers see this plan as a strong threshold for making long-overdue changes to the tax system. Assembly Speaker Karen Bass says that it’s a promising start towards a new and improved tax system, and the ideas proposed are “intriguing”. As freshman Anna Wang says, “In the midst of harsh economic times we need change. This new tax system will be beneficial to struggling families.” However, only time will tell if this novel, never-been-tried-before tax system will be the solution to untangling California’s economic state.

    **more quotes to come later**

    oisheeshemontee

    Posts : 145
    Join date : 2009-09-01
    Age : 24

    Copyedit #1

    Post  oisheeshemontee on Sat Oct 10, 2009 11:32 am

    California’s economy is in a dire state, but is a radical new tax system the solution to this problem?

    On Sept. 27, the “Commission on the 21st Century Economy,” a committee charged with the task of updating and reforming California’s tax system, proposed a new tax plan that has never [before] been tried on a wide scale in the US. After spending a year looking at ways to bring California’s tax system up to par, the commission found that the system is out of date, putting the state at a disadvantage. This is why [Because of this,] the commission has suggested a completely new system, which will change the personal income tax structure and eliminate sales taxes and corporate income taxes.

    California’s tax system originated from the Great Depression, when [items produced by small manufacturers were subjected to a sales tax] small manufacturers produced items that were subject to a sales tax. As recently as 1950, revenue from sales taxes provided nearly 60% of the state’s profits. However, California’s economy has shifted to one mainly composed of service industries- lawyers, engineers, and other professionals, whose sales aren’t [services are not] taxed. Therefore, California has been depending heavily on income taxes, which grew to more than 53% of state revenue in 2008. The core of the new tax system will tax businesses on their business net receipts [instead of focusing on sales taxes].

    The logistics of the plan includes greatly reducing the personal income tax by lowering the tax rate for anyone making more than $56,000 a year from 9.3% to 6.5%. There would be an extra 1% tax on any incomes exceeding $1 million to fund local health programs. The only other rate, 2.75%, would be for taxable incomes up to $56,000 for couples. The current income tax system provides 55% of the state general fund, compared to the 32% the new plan would generate.

    To make up for the lost income, the committee proposed a never-tried-before [awk. phrasing - use another phrase meaning novel, or even never-tried-before] idea: a business net receipts tax. The panel declared it not fair [unfair] that the quickly[-]expanding service industry [simply benefited from government wervices without being part of the tax base] isn’t part of the tax base because it benefits from government services. This new business net receipts tax would take 4% of receipts from sales, but not the cost of salaries and benefits, [?? Is there supposed to be something more here, or are you ending the sentence?]
    Many tax experts and organizations who oppose this plan say that the new business net receipts tax is too broad and “uncooked.” Tax experts say [use another word - how about 'believe'?] that it [specify the 'it'] probably needs years of refinement, mainly because this new business tax [here you use 'it'] has never been tried anywhere in the world. Many also say that it’s [deem it] unwise to replace our 70-year-old tax system with a novel experiment. Lawmakers also say that it’s [think it] absurd to reduce the tax rate for people with very substantial incomes.

    On the other hand, lawmakers [also] see this plan as a strong threshold for making long-overdue changes to the tax system. Assembly Speaker Karen Bass says that it’s [it is] a promising start towards a new and improved tax system, and the ideas proposed are “intriguing”. As freshman Anna Wang says, “In the midst of harsh economic times we need change. This new tax system will be beneficial to struggling families.” However, only time will tell if this novel, never-been-tried-before [this is starting to get repetitive - try to find a synonym for this] tax system will be the solution to untangling California’s economic state.

    ashleychi

    Posts : 230
    Join date : 2009-09-02

    Re: New CA Tax System

    Post  ashleychi on Mon Oct 12, 2009 5:01 pm

    California’s economy is in a dire state, but is a radical new tax system the solution to this problem?

    On Sept. 27, the Commission on the 21st Century Economy, a committee charged with the task of updating and reforming California’s tax system, proposed a new tax plan. After spending a year looking at ways to bring California’s tax system up to par, the commission found that the system is out of date, putting the state at a disadvantage. Because of this, the commission has suggested a completely new system, which will change the personal income tax structure and eliminate sales taxes and corporate income taxes.

    California’s tax system originated from the Great Depression, when items produced by small manufacturers were subjected to a sales tax. As recently as 1950, revenue from sales taxes provided nearly 60% of the state’s profits. However, California’s economy has shifted to one mainly composed of service industries- lawyers, engineers, and other professionals, whose services are not taxed. Therefore, California has been depending heavily on income taxes, which grew to more than 53% of state revenue in 2008. The core of the new tax system will tax businesses on their business net receipts instead of focusing on sales taxes.

    A business net receipts tax is a type of tax where companies are taxed on the total revenue they earn through sales. Additionally, in house labor costs will not be able to be deducted, so the state would tax large employers to a greater extent.

    The logistics of the plan includes greatly reducing the personal income tax by lowering the tax rate for anyone making more than $56,000 a year from 9.3% to 6.5%. There would be an extra 1% tax on any incomes exceeding $1 million to fund local health programs. The only other rate, 2.75%, would be for taxable incomes up to $56,000 for couples. The current income tax system provides 55% of the state general fund, compared to the 32% the new plan would generate.

    To make up for the lost income, the committee proposed a never-tried-before idea: a business net receipts tax. The panel declared it unfair that the quickly-expanding service industry simply benefited from government services without being part of the tax base. This new business net receipts tax would take 4% of receipts from sales, but not the cost of salaries and benefits.

    Many tax organizations who oppose this plan say that the new business net receipts tax is too broad and “uncooked.” Tax experts believe that the proposed tax system probably needs years of refinement, mainly because it has never been tried anywhere in the world. Many also deem it unwise to replace our 70-year-old tax system with a novel experiment. Lawmakers also say think it absurd to reduce the tax rate for people with very substantial incomes.

    On the other hand, lawmakers also see this plan as a strong threshold for making long-overdue changes to the tax system. Assembly Speaker Karen Bass says that it is a promising start towards a new and improved tax system, and the ideas proposed are “intriguing”. As freshman Anna Wang says, “In the midst of harsh economic times we need change. This new tax system will be beneficial to struggling families.” However, only time will tell if this newly proposed tax system is the solution to untangling California’s economic state.


    STILL IN REVISION MODE!

    ashleychi

    Posts : 230
    Join date : 2009-09-02

    Re: New CA Tax System

    Post  ashleychi on Mon Oct 12, 2009 10:08 pm

    FINAL

    California’s economy is in a dire state, but is a radical new tax system that would completely change the income tax and sales tax systems the solution to this problem?

    On Sept. 27, the Commission on the 21st Century Economy, a committee charged with the task of updating and reforming California’s tax system, proposed a new tax plan. After spending a year looking at ways to bring California’s tax system up to par, the commission found that the system is out of date, putting the state at a disadvantage, so the commission has suggested a completely new system, which will change the personal income tax structure and eliminate sales taxes and corporate income taxes.

    California’s tax system originated from the Great Depression, when items produced by small manufacturers were subjected to a sales tax. As recently as 1950, revenue from sales taxes provided nearly 60% of the state’s profits. However, California’s economy has shifted to one mainly composed of service industries- lawyers, engineers, and other professionals, whose services are not taxed. Therefore, California has been depending heavily on income taxes, which grew to more than 53% of state revenue in 2008. The core of the new tax system will tax businesses on their business net receipts instead of focusing on sales taxes. A business net receipts tax is a type of tax where companies are taxed on the total revenue they earn through sales.

    The logistics of the plan include greatly reducing the personal income tax by imposing only two taxes. The tax rate for anyone making more than the median household income, $56,000, will be 6.5%. Couples whose incomes are at or below the median income will be taxed 2.75%. This represents a huge cut to income tax rates, as California currently has 7 rates.

    To make up for the lost income, the committee proposed a never-tried-before idea: a business net receipts tax. The panel declared it unfair that the quickly-expanding service industry simply benefited from government services without being part of the tax base. This new business net receipts tax would take 4% of receipts from sales, but not the cost of salaries and benefits.

    Many tax organizations who oppose this plan say that the new business net receipts tax is too broad and “uncooked” and probably needs years of refinement. Others also deem it unwise to replace our 70-year-old tax system with a novel experiment. A spokesperson from the California Business Round Table says that the tax system is so new, there is no way to calculate the effects it will have on the economy. One thing is for sure, though. If put into affect now, tax experts predict that the state will be in chaos, trying to understand the new tax system. Thirty-one years ago, when voters significantly cut property taxes, California’s tax structure was thrown into chaos. Many people don’t want this event repeated.

    On the other hand, lawmakers also see this plan as a strong threshold for making long-overdue changes to the tax system. Assembly Speaker Karen Bass says that it is a promising start towards a new and improved tax system, and the ideas proposed are “intriguing”. As freshman Anna Wang says, “In the midst of harsh economic times we need change. This new tax system will be beneficial to struggling families.” However, only time will tell if this newly proposed tax system is the solution to untangling California’s economic state.

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