California Democrats to Unveil Budget Plan, Income Tax Increase
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California’s Democratic leaders plan to unveil a budget proposal to erase a $19.1 billion deficit as early as next week that may include a 1 percentage-point rise in the personal income-tax rate.
The increase would affect all taxpayers except those in the highest tax bracket, according to Senate President Darrell Steinberg, a Democrat. To make it more palatable to voters, California’s highest-in-the-nation sales tax would be cut simultaneously by 2.5 percentage points. Unlike sales levies, state income taxes are deductible from federal returns. The swap would add as much as $3 billion to the general fund.