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http://www.businessweek.com/news/2012-01-17/brown-tax-plan-won-t-raise-as-much-as-planned-analyst-says.html

Bloomberg News

Brown Tax Plan Won’t Raise as Much as Planned, Analyst Says

January 17, 2012

(Updates with tax rates in third paragraph.)

Jan. 9 (Bloomberg) -- California Governor Jerry Brown’s proposed tax increases to avoid deeper cuts to schools may raise $2 billion less than projected, the state’s fiscal analyst said.

The temporary boost in income- and sales-tax rates would generate about $4.8 billion in the next fiscal year, less than the $6.9 billion Brown estimated in his budget proposal, released last week, according to a report today from the Legislative Analyst’s Office.

Brown wants to raise income taxes on individuals making at least $250,000 a year to 10.3 percent from 9.3 percent. For those earning $300,000 to $500,000, the rate would climb to 10.8 percent. For single filers with income above $500,000, it would jump to 11.3 percent. Californians with income of more than $1 million are now taxed at 10.3 percent.

The governor also wants to boost the state retail-sales tax rate to 7.75 percent from 7.25 percent. The higher income and sales levies would expire after five years. He wants voters to approve the increase through a statewide election in November.

--Editors: Ted Bunker, Mark Schoifet.

To contact the reporters on this story: Michael B. Marois in Sacramento at mmarois@bloomberg.net;

To contact the editor responsible for this story: Mark Tannenbaum at mtannen@bloomberg.net


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