Subject: Studies in the News 07-8 (February 9, 2007)


CALIFORNIA RESEARCH BUREAU
CALIFORNIA STATE LIBRARY
Studies in the News:
Revenue, Taxation and Budgeting Supplement


Contents This Week

Introductory Material ECONOMY
   World ranking of California economy
   Dramatic changes in income trends
   Tax rules changing perceived incomes
GENERAL GOVERNMENT
   Bond package needs ground rules
   Tough choices for future budgets
   Proposed 2008 federal budget
   California's share of federal budget
   State corporate income tax
   State aid to local governments
   Telecommunications taxes
   Trade-offs in California budget
   Tax expenditure report
   Soaring debt in state and local governments
   Governor's budget plan
   Overview of Governor's budget
   Budget bill overview
   Budget shortfalls in all states
   Healthy revenues for states
   Positive fiscal outlook for states
   Plans for new schools, prisons, dams
   Minimizing tax collection gap
   Increasing taxation on older workers
   Taxing foreign earned income
   Sales tax reform
   Estate tax collections dropping
   Local sales tax streamlining movement
PREVIOUSLY IN STUDIES IN THE NEWS
   State business tax climate
   California's limited liability companies
   Taxing low-income families
   Avoiding state corporate income tax
   Ratio of taxes to income
   Structural budget problems
   State tax and expenditure limits
   Troubled state tax systems
   Taxing illegal aliens
   Who pays taxes in California
Introduction to Studies in the News

Studies in the News is a very current compilation of items significant to the Legislature and Governor's Office. It is created weekly by the State Library's Research Bureau to supplement the public policy debate in California’s Capitol. To help share the latest information with state policymakers, these reading lists are now being made accessible through the State Library’s website. This week's list of current articles in various public policy areas is presented below.

Service to State Employees:

  • When available, the URL for the full text of each item is provided.

  • California State Employees may contact the State Information & Reference Center (916-654-0206; cslsirc@library.ca.gov) with the SITN issue number and the item number [S#].

  • All other interested individuals should contact their local library - the items may be available there, or may be borrowed by your local library on your behalf.

The following studies are currently on hand:

ECONOMY

CALIFORNIA

California’s World Ranking: 2005 Gross Product. By the California Department of Finance. (The Department, Sacramento, California) 2006. 1 p.

Full Text at: www.dof.ca.gov/HTML/FS_DATA/LatestEconData/documents/BBRANK_001.XLS

[“California's economy no longer ranks No. 6, but rather is the eighth-largest economy in the world. The state, with about 37 million residents, ranks behind the U.S., Japan, Germany, China, the United Kingdom, France and Italy, according to U.S. Commerce Department and World Bank figures. Spain and Canada complete the top 10.... California last ranked sixth in 1999 and then bounced in front of France until 2002, the last year it ranked so highly. Since then, China, France and Italy have eclipsed the state. “ Fresno Bee (January 12, 2007) 1.]

[Request #S70801]

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INCOME

Pulling Apart: A State-by-State Analysis of Income Trends. By Jared Bernstein, Center on Budget and Policy Priorities, and others. (The Center, Washington, DC) 2006. 60 p.

Full Text at: www.cbpp.org/1-26-06sfp.pdf

["The incomes of very high-income families — the richest five percent — grew dramatically between the early 1990s and the early 2000s. In eight of the 11 large states analyzed, the incomes of the top five percent grew substantially faster than the incomes of the poorest 20 percent. The states with the largest gaps between high-income and middle-income families were Texas, Kentucky, Florida and California.... Changes in federal, state and local tax structures and benefit programs have, in many cases, accelerated the trend toward growing inequality emerging from the labor market."]

[Request #S70802]

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Has U.S. Income Inequality Really Increased? By Alan Reynolds, Cato Institute. Policy Analysis. No. 586. (The Institute, Washington, DC) January 8, 2007. 3 p.

Full Text at: www.cato.org/pub_display.php?pub_id=6880

["Large changes in U.S. tax rules encouraged corporate executives to switch to stock options taxed as salaries rather than capital gains, effectively boosting perceived incomes at the top.... Meanwhile, growing income amounts at the bottom are diminished by studies of inequality based on tax return data which ignore increasing transfer payments to tax-favored savings plans, such as 401(k)s."]

[Request #S70804]

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GENERAL GOVERNMENT

BONDS

Implementing the 2006 Bond Package: Increasing Effectiveness Through Legislative Oversight. By the Legislative Analyst’s Office. (The Office, Sacramento, California) January 22, 2007. 56 p.

Full Text at: www.lao.ca.gov/2007/2006_bonds/2006_bonds_012207.pdf

[“More laws are needed to ensure that the big infrastructure bond package voters approved will improve California's highways, schools, flood-control levees and housing. The report on the $43 billion package urged the Legislature to set ground rules for awarding shares of the money, such as requiring dollars to be used for building things and not creating new state programs. The report also urged the Legislature to monitor closely how dollars are spent, to require local agencies to put up money of their own in order to receive bond proceeds and to cancel awards for projects that are not delivered on time.” North Coast Times (January 23, 2007) 1.]

[Request #S70819]

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FEDERAL BUDGET

Long-Term Budget Outlook: Saving Our Future Requires Tough Choices Today: Testimony. By David M. Walker, Comptroller General of the United States. Presented to the Senate Committee on the Budget. GAO-O7-342T. (U.S. Government Accountability Office, Washington, DC) January 11, 2007. 21 p.

["The $248 billion fiscal year 2006 unified budget deficit was lower than originally forecast and lower than last year’s deficit of $318 billion. In fact, the U.S. government’s total reported liabilities, net social insurance commitments, and other fiscal exposures continue to grow and now total approximately $50 trillion, representing approximately four times the nation’s total output, or gross domestic product in fiscal year 2006.... Many tax expenditures operate like entitlement programs—but with even less scrutiny. Other programs and activities were designed for a very different time. To recapture our fiscal flexibility and bring our government and its programs in line with 21st century realities requires a fundamental reexamination of major spending and tax policies"]

[Request #S70805]

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Budget of the United States Government: Fiscal Year 2008. By the Office of Management and Budget, Executive Office of the President. (The Office, Washington, DC) February 2007.

["Parts of Bush's budget cheered Californians. The state stands to benefit from a proposed change in budget provisions that would steer more of the Homeland Security Department's money to the nation's more populous states...But Bush's proposed cuts to the CalFed Bay-Delta flood control project provoked bipartisan ire....Bush's budget would also eliminate another program the California congressional delegation has come together to restore in the past: the State Criminal Alien Assistance Program, which partially reimburses states for the cost of jailing illegal immigrants." Los Angeles Times (February 6, 2007) 1."]

The Nation's Fiscal Outlook. 12 p.
http://www.gpoaccess.gov/usbudget/fy08/pdf/budget/outlook.pdf

Overview of the Budget. 4 p.
http://www.gpoaccess.gov/usbudget/fy08/pdf/budget/overview.pdf

Budget. Various Pagings.
http://www.gpoaccess.gov/usbudget/fy08/pdf/budget/budget.zip

[Request #S70824]

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President’s Budget Proposal for Fiscal Year 2008: California Implications: Special Report. By the California Institute for Federal Policy Research. (The Institute, Washington, DC) February 2007. 23 p.

Full Text at: http://www.calinst.org/pubs/BudgetProposal2008.pdf

["The Budget proposes $2.9 trillion for fiscal year 2008, and reduces non-security spending for the third straight year.... Total FY 2008 federal spending for 29 of the largest federal formula grant programs was estimated at $382.7 billion.... It is important to note that relatively little can be determined at this early stage regarding any of these programs; future demographic, economic, usage, and other factors will determine states’ actual shares in most cases.... California is expected to receive $21.6 billion, or 10.42 percent of the nation’s $207 billion, from the Medicaid program in 2008. For federal-aid highway program spending, the budget predicts $3.15 billion for California, an increase from $2.4 billion predicted for in 2007 and $2.85 billion in 2006."]

[Request #S70825]

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INCOME TAXES

"The Potential Effect of Eliminating the State Corporate Income Tax on Economic Activity." By Laura A. Wheeler. IN: State Tax Notes, vol. 39, no. 9 (2006) pp. 705-717.

["This report ... estimates the effect of eliminating the state's corporate income tax on economic activity within the state.... Economists have struggled with this issue for over 30 years ... each trying to determine what effect, if any, fiscal variables have on firm location and thus on state employment and investment levels."]

[Request #S61917]

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LOCAL GOVERNMENT FINANCE

State Aid to Local Governments. By July Zelio, National Conference of State Legislatures. NCSL Legisbrief. Vol. 14. No. 36. (NCSL, Denver, Colorado) 2006. 2 p.

[“Local governments … need reliable revenues to deliver services, ranging from public safety to education to health and human services. State financial aid plays a vital role in those revenues. States collectively transferred $356 billion — nearly half their general own-source revenue — to local governments in 2001-2002, the most recent year for which national data are available.”]

[Request #S70813]

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LOCAL TAXES

Local Government Perspective on Telecommunications Taxes: A Response to Industry's 2004 COST Study. By the National League of Cities and others. (The League, Washington, DC) 2006. 15 p.

Full Text at: www.nlc.org/content/Files/LocalGovtPerspective090606.pdf

["Local and state governments stand to lose $8 billion a year in revenues if Congress further restricts their ability to levy taxes or fees on the telecommunications industry.... Eighty-one percent of all cities with populations over 50,000 would see their tax revenues decline. As a result, they would either be forced to cut services to local residents or raise taxes on other taxpayers." Government Technology (September 7, 2006) 1.]

[Request #S70823]

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PUBLIC FINANCE

Fiscal Realities: Budget Tradeoffs in California Government. By Tracy Gordon and others, Public Policy Institute of California. (The Institute, San Francisco, California) January 2007.

["The authors...examine California’s entire revenue and spending picture in a way different from traditional, program-based analyses. Through a broad budgetary lens, and by looking at years of public opinion surveys, they evaluate what it would take to make Californians’ stated desires for their state a reality. In many cases, doing so would be extremely expensive. Reducing class size so that teacher-student ratios match ratios in other states would cost California governments an additional $15 billion per year. What services would Californians be willing to forego to pay for this? The report should help spark a broad public conversation about the tradeoffs Californians make now and those they might have to make to attain the kind of California they want."]

Report. 278 p.
http://www.ppic.org/content/pubs/report/R_107TGR.pdf

Research Brief. 2 p.
http://www.ppic.org/content/pubs/rb/RB_107TGRB.pdf

[Request #S70812]

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REVENUE AND TAXATION

Tax Expenditure Report: 2006-2007. By the Department of Finance. (The Department, Sacramento, California) 2006. 12 p.

Full Text at: www.dof.ca.gov/HTML/FS_DATA/TAX/Tax_Expenditure_Rpt_06-07.pdf

["There is no absolute rule for defining tax expenditures, and the concept of a 'tax expenditure' can be defined in several different ways. For the purposes of this report, the Department has chosen to define a tax expenditure as any special provision in the tax law that results in the collection of fewer tax revenues than would be collected under the basic tax structure. This report is also intended to identify only tax expenditures with large revenue effects in order to focus attention on those areas of the tax structure with major fiscal significance."]

[Request #S70806]

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STATE & LOCAL GOVERNMENT FINANCES

State and Local Government Debt is Soaring. By Chris Edwards, Cato Institute. Tax & Budget Bulletin. No. 37. (The Institute, Washington, DC) 2006. 2 p.

Full Text at: www.cato.org/pubs/tbb/tbb_0706-37.pdf

["State and local tax revenues are currently growing strongly, thus now is a good time to start reducing debt loads. There is no particular optimal level of government debt, but there should be a strong bias in favor of pay-as-you-go financing for infrastructure because it is cheaper, more transparent, and more prudent given the large costs that face the states in coming years. Routine capital projects, such as school construction, should be financed on a pay-as-you-go basis. Debt financing is more appropriate for large and unforeseen needs, such as rebuilding after disasters." ]

[Request #S70808]

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STATE BUDGET

Governor’s Budget: Highlights and Summary: 2007-2008. By the California Department of Finance. (The Department, Sacramento, California) January 2007. Various pagings.

["Governor Arnold Schwarzenegger released a $143.4-billion spending plan that would wipe out the chronic multibillion-dollar deficits that have plagued the state since before he came to office while at the same time running up a new credit card bill for future Californians...." Los Angeles Times (January 11, 2007) A1.]

Budget Highlights. 178 p.
http://www.ebudget.ca.gov/pdf/BudgetSummary/BudgetHighlights.pdf

Budget Summary. 337 p.
http://govbud.dof.ca.gov/pdf/BudgetSummary/FullBudgetSummary.pdf

[Request #S70809]

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Overview of the Governor's Budget: 2007-2008. By Brad Williams, Legislative Analyst's Office. (The Office, Sacramento, California) January 12, 2007. 17 p.

Full Text at: www.lao.ca.gov/2007/budget_overview/07-08_budget_ov.pdf

["The Legislative Analyst's Office report said Schwarzenegger made an 'unusually' large number of overly optimistic predictions about how the state could save money and how much it would earn in taxes during the 2007-08 fiscal year..... [The report] also questioned the governor's assumption that the state would win two court cases that would require new spending of nearly $1 billion. Both cases -- one involving raises for welfare recipients and the other involving pension bonds -- are on appeal after the state lost in lower courts." Sacramento Bee (January 13, 2007) A1.]

[Request #S70810]

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Overview of the 2007-08 Budget Bill (Senate Bill 54, as Introduced). By the Senate Committee on Budget and Fiscal Review. (The Committee, Sacramento, California) January 2007. Various pagings.

Full Text at: www.senate.ca.gov/ftp/SEN/COMMITTEE/STANDING/BFR/_home/Over07.html

["The proposed budget is not without potential risks and uncertainties because the budget balances new spending and closes the General Fund shortfall with $3.4 billion in revenue assumptions.... The Governor’s budget estimates General Fund revenues and transfers to be approximately $101.3 billion, an increase of $6.8 billion, or 7.2 percent, above the revised 2006-07 estimate of $94.5 billion. Total resources available, in 2007-08, from all sources (including a carry forward balance of $3.2 billion from 2006-07) are estimated at $104.5 billion.... The budget proposes General Fund expenditures of $103.1 billion in 2007-08. This is an increase of $1 billion, or 1 percent, over the revised 2006-07 figure of $102.1 billion."]

[Request #S70816]

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STATE BUDGETS

State Shortfalls Projected to Continue Despite Economic Gains: Policy Alert. By Dennis Jones, National Center for Public Policy and Higher Education. (The Center, San Jose, California) 2006. 6 p.

Full Text at: www.highereducation.org/reports/pa_shortfalls/State_Shortfalls.pdf

["All states face potential budget deficits.... Spending in many states will be increasingly dominated by the cost of Medicaid growth. The federal budget outlook has deteriorated dramatically -- the main reason why the fiscal outlook for states shows a potential shortfall of 5.7% by 2013.... Personal income, is projected to grow at an average annual rate of 4.5%. State and local spending needed to maintain current services is projected to grow a bit more slowly than the economy, at an average annual rate of 4.4%."]

[Request #S70807]

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State Budget Update, 2006. By the National Conference of State Legislatures. (NCSL, Denver, Colorado) November 2006. 35 p.

[“The 50-state fiscal survey found that the flow of money into state coffers so far this year is on target or above projections in all but three states. Forty-eight states reported a stable or optimistic revenue outlook. Two years ago, it was the reverse, with 38 states either concerned or downright pessimistic. Only three states reported a budget gap, compared to 31 two years ago.... But the upturn helps only so much, many legislators and fiscal experts warned. The states are suffering because of a combination of damaging developments that leave them less able to provide the fundamentals people expect, from education to roads to social services.” Associated Press (December 9, 2006) 1.]

[Request #S70814]

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Fiscal Survey of the States. By the National Governor’s Association and the National Association of State Budget Officers. (National Governor’s Association, Washington, D.C.) December 2006. 62 p.

Full Text at: www.nga.org/Files/pdf/FSS0612.PDF

[“States posted larger-than-expected fund balances at the end of fiscal 2006, allowing many to bolster their rainy-day funds, paving the way for a stable fiscal 2007, according to a semiannual survey. Meanwhile, state revenue growth was strong, with fiscal 2006 revenues exceeding expectations in 46 states and meeting targets in four. Revenues were 5.9% higher than originally estimated -- sales taxes were 2.3% higher, personal income taxes were 6.6% higher, and corporate income taxes were 20.5% greater. Spending was up 8.7% in fiscal 2006, which the survey noted was 'significantly' higher than the 29-year average of 6.4% growth.” The Bond Buyer (December 14, 2006) 1.]

[Request #S70815]

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STATE OF THE STATE

State of the State Address. By California Governor Arnold Schwarzenegger. (Office of the Governor, Sacramento, California) January 9, 2007. Various pagings.

Full Text at: gov.ca.gov/index.php?/print-version/press-release/5089/

[“Governor Arnold Schwarzenegger called for another multibillion-dollar wave of borrowing for new reservoirs, courthouses, classrooms and prison beds —- core public resources that, he said, are strained by California's growing population. The governor laid out a plan for $43.3 billion in bonds over the next three years to pay for a round of public construction that would surpass what voters approved in the November election.” Los Angeles Times (January 10, 2007) 1.]

[Request #S70811]

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TAX REVENUES

A Report on Tax Agency Information and Data Exchange. By Crystal Taylor, Legislative Analyst's Office. (The Office, Sacramento, California) January 2007. 18 p.

Full Text at: www.lao.ca.gov/2007/tax_agencies/Tax_Agencies_012307.pdf

["Recently, compliance and enforcement issues have become of increasing concern ... due to a number of different trends and factors: 1) abusive tax shelters have led to increased underreporting of income for tax purposes; 2) the growth of the Internet and other forms of remote sales have led to noncompliance with the state’s use tax; and 3) the growth in nonwage income has led to less withholding.... Compliance and enforcement activities are important for the state’s tax system since they help ... reduce the tax rates necessary to raise a given amount of revenues. The collection, sharing, and accessibility of tax-related information among tax agencies are seen as primary methods of dealing with the tax gap . . . that is, the difference between taxes legally owed and actually paid to the state."]

[Request #S70817]

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TAXES

"The Implicit Tax on Work at Older Ages." By Barbara A. Butrica and others. IN: National Tax Journal, vol. 59, no. 2 (2006) pp. 211-234.

Full Text at: www.urban.org/UploadedPDF/1001021_implicit_tax.pdf

["Encouraging work at older ages is a crucial policy goal for an aging society, but many features of the benefits and tax system discourage work. This study computes the implicit tax rate on work at older ages, broadly defined to include standard income and payroll taxes as well as changes in future Social Security benefits, employer-provided pension benefits, and health benefits associated with an additional year of employment. The results show that the implicit tax rate on work increases rapidly with age, rising from 14 percent at age 55 for a typical man to nearly 50 percent at age 70."]

[Request #S70803]

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Taxing Citizens in a Global Economy. By Michael S. Kirsch, Notre Dame Law School. Legal Studies Research Paper. No. 06-33. (The School, Notre Dame, Indiana) October 16, 2006. 77 p.

["As a general matter, the U. S. is the only economically developed country that taxes its citizens abroad on their foreign income. Despite this broad general assertion of taxing jurisdiction, Congress allows citizens abroad to exclude a limited amount of their income earned from working outside the U. S. Influential lobbying groups, including businesses that employ significant numbers of U.S. citizens abroad, argue that this exclusion is necessary in order to keep American business competitive overseas. Recently, these groups have argued that modern developments, including lowered barriers to trade and the increased mobility of workers, strengthen this argument, and that the U. S. must allow an unlimited foreign earned income exclusion, or perhaps abandon citizenship-based taxation altogether, in order to remain competitive."]

[Request #S70818]

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Allocating Local Sales Taxes: Issues and Options. By Brad Williams, Legislative Analyst's Office. (The Office, Sacramento, California) January 2007. 16 p.

Full Text at: www.lao.ca.gov/2007/sales_tax/sales_tax_012407.pdf

["Local governments receive about $7 billion in revenues related to the sales tax each year. This point-of-sale allocation system (sometimes referred to as a 'situs-based' system) raises several important issues and concerns.... The use of financial incentives does not result in net benefits to a broader economic region within the state. It simply shifts existing sales taxes from one jurisdiction to another— at the cost of government resources that could be used for other purposes. The counterproductive aspects of the current system could be addressed through major reforms involving either the local sales tax allocation methodology or changes in local government’s system of taxes."]

[Request #S70820]

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Fewer and Fewer Americans Owed Estate Tax in 2005: State-by-State Data, By Citizens for Tax Justice. (Citizens for Tax Justice, Washington, DC) January 2007. 12 p.

Full Text at: www.ctj.org/pdf/estate0107.pdf

["Overall, the percentage of people owing estate taxes dropped by 39% between 2004 and 2005. This is largely because the estate tax exemption was increased to $1.5 million, compared to $1 million in the previous year. The exemption is scheduled to increase further in later years until 2010, when the estate tax is scheduled to be repealed. In 2011, however, the estate tax will be resurrected with the $1 million exemption and rates that applied under pre-Bush law."]

[Request #S70821]

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"Local Sales Tax Sourcing and the Streamlining Movement." By John A. Smith. IN: State Tax Notes, vol. 41, no. 10 (September 4, 2006) pp. 697-701.

["A primary goal of sales tax streamlining is to reduce the compliance burden of reporting tax to local jurisdictions, thereby paving the way for state taxation of non-physically-present remote sellers, compulsory taxpayers."]

[Request #S70822]

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PREVIOUSLY IN STUDIES IN THE NEWS
[This section links to items in Studies in the News since the last Revenue, Taxation and Budgeting Supplement.]

ECONOMY

TAXATION

State Business Tax Climate Index. By Curtis S. Dubay and Scott A. Hodge, Tax Foundation. (The Foundation, Washington, DC) 2006. 56 p.

Full Text at: www.taxfoundation.org/files/bp51.pdf

["American companies function at a competitive disadvantage in the global economy because they pay one of the highest corporate tax rates of any of the industrialized countries. The index is a tool for lawmakers, the media, and individuals alike to gauge how their states’ tax systems compare."]

[Request #S62302]

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"California LLCs -- An Update on Planning Techniques." By Kathleen K. Wright. IN: State Tax Notes, vol. 37, no. 12 (September 19, 2005) pp. 869-873.

["This article updates the status of limited liability companies in California and how they are being used to achieve those legal and business objectives. Some limited liability companies work, but others get entangled with California's tax law, which may well destroy the benefit of using them."]

[Request #S62304]

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GENERAL GOVERNMENT

INCOME TAXES

The Impact of State Income Taxes on Low-Income Families in 2005. By Jason A. Levits and Nicholas Johnson, Center on Budget and Policy Priorities. (The Center, Washington, DC) February 22, 2006. 24 p.

Full Text at: www.cbpp.org/2-22-06sfp.pdf

["This report analyzes the impact of state income taxes on poor and near poor families in 2005. Included are: income tax thresholds (starting point at which families' incomes are taxed) for each state and the District of Columbia, state income tax on those at and near the poverty level, historical tables for tax thresholds, and a brief discussion of state income tax legislation/reform."]

[Request #S62307]

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Federal "Business Activity Tax Nexus" Legislation: Half of a Two-Pronged Strategy to Gut State Corporate Income Tax. By Michael Mazerov, Center on Budget and Policy Priorities. (The Center, Washington, DC) 2005. 14 p.

Full Text at: www.cbpp.org/1-26-05sfp.pdf

["Many multistate corporations are engaged in a two-pronged strategy aimed at substantially increasing the share of their nationwide profit that is not taxed by any state... The federal legislation ... would make it much more difficult for states to require many out-of-state corporations to pay any income tax."]

[Request #S62308]

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Income Taxes: Who Pays and How Much? By the Federal Reserve Bank of St. Louis. (The Bank, St. Louis, Missouri) March 2006. 1 p.

Full Text at: research.stlouisfed.org/publications/net/20060301/cover.pdf

["In 2003 the ratio of taxes to income was 11.9 percent. The top 50 percent of taxpayers accounted for 86 percent of Adjusted Gross Income (AGI) and paid more than 96.5 percent of Individual Income Tax (IIT). The bottom 50 percent accounted for 14 percent of AGI and 3.5 percent of IIT. The average tax rate for the top 50 percent was 13.4 percent, while the rate for the bottom 50 percent was 3 percent. Both of these rates for 2003 are at their lowest levels for 1985-2003."]

[Request #S62309]

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STATE FINANCES

Faulty Foundations: State Structural Budget Problems and How to Fix Them. By Iris J. Lav and others, Center on Budget and Policy Priorities. (The Center, Washington, DC) 2005. 82 p.

Full Text at: www.cbpp.org/5-17-05sfp.pdf

["Many states risk chronic gaps between revenues and necessary expenditures in coming years because of structural weaknesses in their tax systems. These weaknesses are largely independent of the cyclical budget problems caused by economic downturns. Thus, even though states are now enjoying expanded revenues due to the economic recovery, they could face serious budget problems in coming years if their structural issues are not addressed."]

[Request #S62311]

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State Tax and Expenditure Limits -- 2005. By National Conference of State Legislatures. (NCSL, Denver, Colorado) 2005. Various pagings.

Full Text at: www.ncsl.org/programs/fiscal/tels2005.htm

["The first years of the twenty-first century have brought renewed interest in the structure and effectiveness of tax and expenditure limitations (TELs). These fiscal mechanisms are designed to provide certain strictures to restrain the growth of governmental budgets either on the tax side or the spending side or on both. This paper reviews the use of TELs by the several states and explores the policy issues associated with fiscal limits."]

[Request #S62312]

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STATE TAXES

State Tax Policy: A Political Perspective. by David Brunori, Urban Institute Press. (The Institute, Washington, DC.) 2005. 158 p.

["State tax systems are in trouble. Revenue collecting methods developed more than a half century ago are facing the strain of dealing with 21st century economies.... David Brunori analyzes these and other critical challenges facing state governments. He identifies the important issues, and examines possible solutions in formulating and implementing state tax policy."]

[Request #S62316]

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"Taxing Illegal Aliens." By David Brunori. IN: State Tax Notes, vol. 39, no. 8 (February 27, 2006) pp. 649-650.

["Several state legislators have taken it upon themselves to join the fight to curb illegal immigration, and they're using the tax system as a weapon. In Arizona the House Appropriations Committee approved an 8 percent tax on all international electronic money transfers out of Arizona..... A proposal in Georgia would require illegal immigrants to pay a 5 percent tax on all wire transfers to another country."]

[Request #S62317]

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TAXES

Who Pays Taxes in California? By the California Budget Project. (The Project, Sacramento, California) 2006. 3 p.

Full Text at: www.cbp.org/pdfs/2006/0604_pp_whopaystaxes.pdf

["In 2004-05, California ranked 12th among the 50 states with respect to state taxes as a percentage of personal income. The state ranked 18th with respect to total 'own source' revenues – the broadest measure of state and local revenues –- raised by state and local governments in 2001-02.... California ranks relatively high with respect to personal and corporate income tax collections, although the available data fail to take into account the relatively modest growth in revenues in recent years. The state ranks relatively low with respect to property, vehicle fuel, and alcoholic beverage taxes."]

[Request #S61633]

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