Essential Politics: The secret behind California's tax breaks
Gray Davis, who summed up best the resistance to reinstating taxes once cut by elected officials.
“Once you give something back to people, you can never ask them to return it,” Davis told me in a 2006 interview. “You gave it to them, it’s theirs, leave it alone.”The latest news, analysis and insights from our bureau chiefs in Sacramento and D.C.Perhaps that helps explain why the simplest of efforts — to review the efficacy and merit of some $73 billion in existing California tax breaks — will again fail to materialize in Sacramento once lawmakers adjourn for the year at the end of the month.
The most recent estimate is that dozens of California tax breaks reduced state government general fund revenue by almost $73 billion in the fiscal year that ended in June — up in value more than 70% from just a decade earlier. Most of the amount comes from the value of personal income tax breaks, though tax cuts for corporations and in sales and use taxes also reduce revenue collections.
No one is clamoring to cancel all — or even most — of the incentives, many of which are widely used and incredibly popular. The five largest tax breaks, based on a 2018-19 analysis: employer retirement contributions, employer health coverage contributions, tax-free sales on bottled water and some food, Social Security income and interest paid on mortgages..
Jackson, who will leave the Legislature at the end of the year due to term limits, has tried for two consecutive years to enact a law requiring a detailed review of California’s tax expenditures.her bill last year, arguing that his Department of Finance already keeps tabs on tax breaks. died a quiet state Capitol death when the Assembly refused to bring it up in committee.
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