Florez warns against shifting tax burden to middle class
Senator says proposed tax reforms will benefit super-wealthy while increasing poverty for others

SACRAMENTO – Senate Majority Leader Dean Florez (D-Shafter) responded warily to a report by the Commission on the 21st Century Economy on reforming the state’s tax system, which was created for a 1930s durable goods economy.  The commission set out to suggest changes that would lead to more stable revenues in today’s technology- and service-based economy, but Florez cautions the suggested approach will shift too much of the burden onto California’s shrinking middle-class.

Florez issued the following statement on the report:

“While attempting to ease California’s boom-or-bust tax revenues is a worthy goal, I’m afraid that the Commission on the 21st Century Economy’s report is too much a recipe for shifting the tax burden onto the state’s shrinking middle class.  Flattening the income tax - as provided in the report - would largely benefit wealthy Californians, with folks making over $1 million a year seeing a reported average cut of 31 per cent or more in their personal income taxes.  The super-wealthy will be off the hook from paying their fair share, and more middle-class Californians could fall into poverty with a heavier tax burden.  This alone presents a huge hurdle for the Commission and its advocates to overcome in order to get average Californians on board and in support of changing our state’s tax laws.

“I think it would be a mistake to simply view the Commission’s report in the abstract.  It needs to be married with the state’s spending priorities so that any trade-offs in tax policy are fully accounted for with society’s goals.

“The report represented less than half of our state’s spending and revenue puzzle.  Better yet, it’s only one leg of a three legged budgetary policy stool: Reforming revenues to bring stability, prioritizing government services and integrating voters’ ballot box spending all need to be accounted for in any tax change policy.  Addressing only one without acting on any of the others would certainly topple our state’s revenue system and increase the volatility that we are attempting to lessen.

“We need to better focus on how we fund certain government functions and attach essential government services to the most stable funding formula, while other services may have to live with the volatility associated with a reliance on personal income taxes which may fluctuate year to year.”

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