(September 30, 2009) The final recommendations of a special state tax commission need “additional analysis and review,” California Chamber of Commerce President and CEO Allan Zaremberg said yesterday.

The Commission on the 21st Century Economy issued its final 425-page report, including draft legislative language, recommending a massive reshaping of California’s tax system. Shortly afterwards, Governor Arnold Schwarzenegger called a special session of the Legislature “at a time to be determined” to consider legislation to “address and improve the state tax system.”

Zaremberg said: “What the commission has recommended would substantially change the way in which the state taxes businesses. In calling the special session, the Governor has recognized that those potentially impacted by these proposals need the opportunity for input. The Legislature needs to fully examine the true impact that these recommendations would have on our struggling economy and our ailing business climate.

“We must not rush into replacing our 70-year-old tax system with an unproven experiment that may fail to deliver the promised results."

Nine of the 14 commissioners, including Chairman Gerald Parsky, signed onto the report, which recommends:

• Adopt new “business net receipts tax,” not to exceed 4 percent;
• Reduce and restructure personal income tax;
• Eliminate state portion of sales tax;
• Eliminate corporate tax;
• Create independent tax dispute body;
• Strengthen rainy day reserve fund.

Business representatives from a variety of industries told the commission during workshops that the business net receipts tax could drive jobs out of California.

A CalChamber-led coalition, Californians Against Higher Taxes, is continuing to raise awareness about proposed tax increases. Updates are available on the coalition’s website and its Twitter at:
www.twitter.com/MoreJobsNotTaxz.