BOE Study: Proposed tax on services would take in $122.6 billion

TaxesJust in time for Tax Day, the Board of Equalization issued a study requested by the Senate Committee on Governance and Finance estimating the revenue take from taxing untaxed services would be $122.6 billion. The study will become fodder in the coming debate over Senator Bob Hertzberg’s effort to restructure the state tax system to include taxes on the service economy.

Hertzberg commented on the study results, “California’s economy has changed from one that had been dominated by making goods to today where 80 percent is producing services.”

Hertzberg’s plan, Senate Bill 8, would tax services as part of a restructuring plan and raise an additional $10 billion in tax revenue.

In response to the study, Board of Equalization Vice-Chair George Runner said,  “I’d consider a broader sales tax only if it’s part of revenue neutral tax reform, such as abolishing California’s income tax and the Franchise Tax Board, along with other taxes that destroy jobs. … The last thing overtaxed Californians need is another tax.”

Runner opposes Hertzberg’s proposal.

There will be plenty of time to get into the debate over service taxes. However, it should be noted that the $122.6 billion the service tax could supposedly raise is not only larger than the current General Fund budget of $113 billion, but almost $10 billion larger. In other words, a tax on services as outlined in the study could replace the General Fund revenues and get the additional $10 billion that Hertzberg is looking for while eliminating the income tax, state sales tax and corporate tax.

Hertzberg’s proposal would not attach a service tax to all the items delineated in the BOE study, pointing out education and health care as tax-free services.

If not all services are taxed the door would be open for other services and industries to seek exemptions from the tax — a potential field day for the state’s lobbyists.

30 comments

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  1. Ronald Stein
    Ronald Stein 15 April, 2015, 14:01

    Hertzberg commented “California’s economy has changed from one that had been dominated by making goods to today where 80 percent is producing services.” Well. it’s obvious: we drove out the manufacturing, now we can drive out many of the services that can provide such services from other states.

    Reply this comment
    • Dork
      Dork 15 April, 2015, 14:50

      Not likely to drive them out of California, but they will go Underground on an all cash basis, which is the way construction went a long time ago. They will shoot themselves in the head over this wacky idea, it will backfire big time.

      Reply this comment
      • SkippingDog
        SkippingDog 15 April, 2015, 16:57

        I have always enjoyed watching “underground” construction contractors attempt to explain their actions in court when they were headed to jail for things such as worker compensation fraud.

        Reply this comment
        • Donkey
          Donkey 15 April, 2015, 17:17

          That’s the behavior of a sociopath Skdog! Do you also enjoy dog, rooster, and bull fighting?
          I take it that Fifty shades of Grey is your kind of movie! 🙂

          Reply this comment
          • SkippingDog
            SkippingDog 16 April, 2015, 11:40

            I certainly don’t condone and would never support any of the abusive animal practices you list. I don’t hunt or fish either, but that’s just my personal preference.

            I do enjoy seeing the “underground contractors” receive the just rewards of their illegal acts.

            I don’t know anything about “50 shades,” having never read the book nor seen the movie. Is that the kind of thing you and Mrs. Donkey specialize in out there on Harbor Blvd.?

  2. SkippingDog
    SkippingDog 15 April, 2015, 16:56

    When the composition of the state economy shifted primarily from manufacturing to service activities, it was time to change the tax structure as well. This proposal makes sense and reflects current economic reality for California.

    Reply this comment
  3. Donkey
    Donkey 15 April, 2015, 17:13

    No shock that Skdog, King of the RAGWUS feeders, seeks another form of thievery to sustain his overly excessive pension with increases.
    I got to tell you Skdog, it has been great seeing the exposure citizens have shined of your crooked cabal of sociopaths. Too bad so many citizens are paying with their lives while you hold tightly to your hero façade. 🙂

    Reply this comment
    • SkippingDog
      SkippingDog 16 April, 2015, 11:44

      There is no “crooked cabal of sociopaths” Donkey, but why should reality have any influence over your broad brush screeds?

      Recent events in So. Carolina say far more about that state’s history and race relations than they do about law enforcement in general. Recent events in Tulsa demonstrate the foolishness of having unpaid “reserve” officers on the streets of any city.

      Reply this comment
    • bob
      bob 16 April, 2015, 19:39

      You got that right, Donkey.

      These parasites will tax you every which way from Sunday and then tax you some more.

      Reply this comment
    • NTHEOC
      NTHEOC 16 April, 2015, 20:07

      Looks like Donkey found a fellow”sovereign citizen” named bob!!

      Reply this comment
      • Donkey
        Donkey 19 April, 2015, 11:25

        Ntheoc, you win “Boot licker of the month” award my RAGWUS feeding friend. We will call it the BLOM Award for you RAGWUS feeders. 🙂

        Reply this comment
  4. Queeg
    Queeg 15 April, 2015, 17:44

    Service businesses are labor intensive. Taxing these low/ margin/productivity businesses is an expenriment that will fail.

    Reply this comment
  5. desmond
    desmond 15 April, 2015, 19:32

    Will they tax what Harris did to @ickstart her ca-rear?

    Reply this comment
    • SeeSaw
      SeeSaw 16 April, 2015, 12:57

      You should pay a tax for every disgusting comment you make!

      Reply this comment
      • bob
        bob 16 April, 2015, 14:06

        Now you be nice to Desmond…it’s the least you could do…after all he is paying your retirement.

        Reply this comment
        • SeeSaw
          SeeSaw 16 April, 2015, 16:46

          No, he is not paying my retirement! He is not paying for anybody else’s retirement! He is paying for public services that he uses everyday, just like he pays the restaurant for the food he consumes–I suppose you would harass the server by letting him/her believe that just because Desmond is eating at their establishment, he is paying for their retirement?

          Reply this comment
          • bob
            bob 17 April, 2015, 14:35

            Paying for public services, eh? Well, he certainly is getting serviced good and hard by the politicians you trough feeders have bought and paid for.

            Of course, he is paying for your retirement. Coming in here and saying anything else is ridiculous.

          • bob
            bob 17 April, 2015, 14:54

            “He is paying for public services that he uses everyday, just like he pays the restaurant for the food he consumes…”

            Hun, that’s just ridiculous. He has the choice to eat at the restaurant or stay home. When he is serviced by people like you in gummit he has no choice. He must eat your swill and pay and if he refuses men with guns come to put him in a cage with violent inmates and if he resists he is killed. I know of no restaurant or any business that has that power.

  6. Bill Gore
    Bill Gore 15 April, 2015, 20:54

    It’s not about the money, it’s never about the money. It’s about social control, social engineering, data gathering and centralized regulation. Professional service providers are a large community of independent, decentralized workers. The fact that they do not work for large organizations subject to central control makes them suspect, and ripe for some punitive taxation. Prediction: big law firms, accountancies and well-connected consulting firms will be exempted…..

    Reply this comment
  7. Colonel Bill Kilgore
    Colonel Bill Kilgore 16 April, 2015, 14:07

    Tax’em to the stoneage son. I love the smell of new taxes in the morning.

    Reply this comment
  8. Colonel Bill Kilgore
    Colonel Bill Kilgore 17 April, 2015, 07:45

    Tax the shiite outta ’em! Tax ’em good and hard and then tax’em again!

    Reply this comment
  9. desmond
    desmond 17 April, 2015, 15:40

    Gertrude Schotz-Klink, Don t act so offended. Where are the Wall Street, capitalists blame comments, code for your true self? Remember the days of the high black boots, that must give a warm feeling.

    Reply this comment
    • SeeSaw
      SeeSaw 17 April, 2015, 16:25

      There are no people of that ilk in my lineage–thank god. I am proud to be an American and will always be thankful that being born in America was my destiny.

      Reply this comment
  10. joper1
    joper1 19 April, 2015, 14:13

    This is what you have when you allow the democrat’s total power.
    Our state is controlled by public employee unions, the extreme environmentalists and their owned and paid for democrat party.
    You all can blame the water storage today on the extreme environmentalists who have FOUGHT every surface storage proposal for the last 40 years.

    The democrat tax and spend policies have driven manufacturers and their high paying jobs from the state.
    The tax policies have also driven high tax paying professionals from California.
    California’s K-12 system is also to blame.
    They are graduating students who are not useful to any employer other than those who need limited intellectual capacity and a strong back.

    A state or country is ONLY as successful as their educated citizens will allow it to be.

    California is headed for bankruptcy and all of the democrat politicians will be surprised when it comes.

    California is the perfect example of why our founding fathers set up a two party system.

    One party rule leads to disaster.

    Reply this comment
    • SkippingDog
      SkippingDog 19 April, 2015, 21:06

      Our founders did not set up a two party system. In fact, founders such as Washington, Adams, and Madison believed political parties were incompatible with our constitutional republic. Time to read a book.

      Reply this comment
  11. mteresa
    mteresa 19 April, 2015, 15:19

    I am in heaven. Anyone want a good laugh, look at the 1950’s bestseller. Look up “The Affluent Society”, and what it’s premise is.
    Take note, the author is searing in Hades. Hey, $/;” happens.

    Reply this comment
  12. Queeg
    Queeg 19 April, 2015, 17:27

    Comrades

    Face destiny. Trains and pensions are just the start of funding malaise…..massive immigration and declining job count and average wager per hour…..take more than a ilage and Lizzy Warren….

    Reply this comment
  13. NormD
    NormD 20 April, 2015, 04:29

    Overlooked in all this is the operational impact on hundreds of thousands of (mostly small) businesses.

    Having run a small business that had to file sales tax returns every month, its a pain. For a while, the penalty for being even one day late was 100% of whatever tax was owed.

    As an example, my brother runs a small dental office using old accounting software that he saw no need to upgrade. No longer after a change like this. Medical exemption? Not all dental procedures are medical. A very expensive upgrade would be required.

    I am sure he is not alone.

    Reply this comment

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