Business groups and lawmakers battle over ballot measure to limit California tax increases

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With countless billions of dollars at stake, hundreds of millions of dollars are likely to be spent for and against the three interrelated measures.

Californians will be coughing up many billions of dollars this month as they file their federal and state income tax returns and pay the second installment on their property taxes.Annually, individual Californians and California-based businesses pay roughly a half-trillion dollars in federal taxes – personal income taxes, Social Security and Medicare payroll taxes, primarily.

Two years ago, California’s two most authoritative polling organizations, UC Berkeley’s Institute of Governmental Studies and the Public Policy Institute of California, asked residents about their tax burdens and both found increasing discontent, in part because they were feeling the pinch of other costs of living.

If passed, the measure would require two-thirds votes for any local tax increases, effectively overturning a state Supreme Court ruling that local taxesproposed via initiative require only simple majority votes. It also would subject any state tax increases to voter approval as well as two-thirds votes by the Legislature.

The Legislature has also placed its own measure on the ballot that, if passed, would require the business tax limit measure itself to get two-thirds voter approval. And it passed another ballot measure to reduce vote margin for local tax and bond measures that increase spending on housing and infrastructure to 55% from the current two-thirds, potentially nullifying the Business Roundtable measure.

 

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