Examples of taxes that would return us to the golden age:
First: The Internet, which is now almost universal in its usage, must pay its fair share of taxes. This includes eliminating the unfair competitive advantage that Amazon.com, which does not collect California sales taxes, has over our local businesses that must collect these taxes.
Second: Proposition 13 is grossly unfair to small and new businesses, and young families. These groups are the key to our future growth. But they are taxed at rates 10 to 20 times higher than old businesses and families that have owned their homes for more than 40 years and, therefore, make no mortgage payments.
Third: There are more billionaires and multimillionaires in California than in any other state, and perhaps in any other nation except China. Therefore, a 2 percent surtax should be applied to all incomes above $1 million. It should be set aside for technical assistance and capacity building for our small businesses to expand, and to ensure a space in our elite public university system for all qualified students.
Fourth: Almost two-thirds of California’s increasingly modern economy is dependent upon services, not goods. Therefore, the sales tax should be revised to also cover all services, except health services, that involve transactions of $1,000 or more. This modification could allow a decrease in the general sales tax rate of at least 25 percent and still generate far more revenue.
Fifth: California should no longer be a slave to an incomprehensible and unjust federal tax system that taxes small businesses at a higher rate than it taxes billionaires such as Bill Gates and Warren Buffett. Instead, the governor should develop a simple but progressive state tax structure. This could be limited to a relatively low rate for incomes under $250,000, a moderate rate for incomes between $250,000 and $1 million, and a surcharge for all income above $1 million.
The implementation of the above five tax changes would not only eliminate the state’s $26.5 billion deficit, but could additionally provide as much as $25 billion a year to promote pro-small-business policies, including a quality education for all Californians.
These November tax ballot measures could enable California to have the best and most modern small-business tax structure in the nation. And since small businesses generate 60 percent to 70 percent of all new jobs in California, we could once again have one of the lowest unemployment rates in the nation, instead of the second highest.
Maria Rosas is owner of M&D Pecanland and treasurer of the Latino Business Chamber of Greater Los Angeles; Jorge Corralejo is chairman-chief executive of the LBC-GLA.