DEMOCRATS URGE TAX SHIFT PLAN WOULD CUT GAS TAX, RAISE SALES, EXCISE.Byline: Harrison Sheppard Sacramento Bureau Assembly Democrats unveiled a transportation spending plan Tuesday that would lower the gasoline tax Noun 1. gasoline tax - a tax on every gallon of gasoline sold excise, excise tax - a tax that is measured by the amount of business done (not on property or income from real estate) , but raise sales and excise taxes excise taxes, governmental levies on specific goods produced and consumed inside a country. They differ from tariffs, which usually apply only to foreign-made goods, and from sales taxes, which typically apply to all commodities other than those specifically exempted. in an effort to immediately fund major projects. The complex proposal involves the state selling $10 billion in bonds to raise money to ``jump start'' transportation and transit improvements. The tax shift is necessary, said Assembly Speaker Fabian Nunez, D-Los Angeles, because of constitutional limitations on the sources of funds to pay back this type of bond. ``This investment is going to give commuters the gift of spending more time at home with their families and less time on our congested con·gest·ed adj. Affected with or characterized by congestion. congested ENT adjective Referring to a boggy blood-filled tissue. See Nasal congestion. roads and highways List of articles related to roads and highways around the world. International/World
The proposal comes as gas prices in California hit near-record levels, currently $2.435 per gallon in Los Angeles, according to the Automobile Club of Southern California The Automobile Club of Southern California was founded December 13, 1900 in Los Angeles as one of the nation's first motor clubs dedicated to improving roads, proposing traffic laws and improvement of overall driving conditions. . Republicans said they hadn't reviewed the details, but likened the proposal to a shell game in which - even though one tax is being lowered - the net effect is to increase taxes on Californians. ``It looks very much like, let's put a tax under the cup and move three or four of them around and see where it comes out,'' said Assemblyman John J. Benoit John J. Benoit (December 1951–) is a U.S. politician, currently serving as a Republican member of the California State Assembly, representing the 64th Assembly District, covering Riverside County. He has served in that body since December 2002. , R-Riverside, a member of the Assembly Budget Committee. ``I don't know Don't know (DK, DKed) "Don't know the trade." A Street expression used whenever one party lacks knowledge of a trade or receives conflicting instructions from the other party. that anybody can at this point in time guess which cup the tax is under.'' The Democratic legislators have yet to issue the complex plan in official written form. Several groups said they were glad to see Democrats tackling an issue that is among the state's top problems, but were unsure whether they have come up with the right solution. ``I think the speaker deserves an A for effort for, one, making transportation a priority and, two, considering not only the short-term but the long-term fix we need for transportation in this state,'' said Michael Lawson, executive director of Transportation California, a coalition of business, labor and transportation agencies. ``But because this is a very complex proposal - it has a lot of moving parts - I think our organization is going to have to take some time to study the economic and political viability of it before we can decide whether to issue it a passing grade.'' Nunez maintained the plan is essentially ``revenue neutral'' because the tax increases and cuts cancel each other out. But tax policy experts noted that the change will likely shift the burden for funding transportation projects away from drivers and onto the working poor. Lowering the gas tax may also encourage people to drive more, thus worsening congestion The condition of a network when there is not enough bandwidth to support the current traffic load. congestion - When the offered load of a data communication path exceeds the capacity. , some experts said. ``You're pushing costs to people who are buying anything, as opposed to people who are directly benefiting from the supposed expenditures that we're supposed to be making with the gasoline tax,'' said Daniel J.B. Mitchell, a professor of management and public policy at UCLA UCLA University of California at Los Angeles UCLA University Center for Learning Assistance (Illinois State University) UCLA University of Carrollton, TX and Lower Addison, TX . ``It's just not clear to me why one would want to do this.'' People in higher income tax brackets tend to save a greater portion of their income while those in lower brackets are forced to spend a greater percentage, meaning the sales tax sales tax, levy on the sale of goods or services, generally calculated as a percentage of the selling price, and sometimes called a purchase tax. It is usually collected in the form of an extra charge by the retailer, who remits the tax to the government. hits them harder, Mitchell said. Rob Stutzman, communications director for Gov. Arnold Schwarzenegger, said the administration looks forward to reviewing the plan. ``We will be happy to receive that proposal, take a closer look at it, and react to it more specifically in the days ahead,'' Stutzman said. Aides to Los Angeles Mayor James Hahn said he would rather see the state strengthen Proposition 42, which was supposed to guarantee more funding for transportation. State legislators and the governor have in recent years used loopholes in the measure to avoid providing full funding to transportation during budget crises. Jon Coupal, president of the Howard Jarvis Taxpayers Association Howard Jarvis Taxpayers Association helped sponsor Proposition 13, the property tax-cutting initiative in California in 1978 which slashed property taxes by fifty-seven percent and initiated a national tax revolt. It was founded by California republican Howard Jarvis. , said the proposal appears to create a net increase in taxes. ``At first blush Adv. 1. at first blush - as a first impression; "at first blush the offer seemed attractive" when first seen , I think it looks like smoke and mirrors to me, but we will analyze it some more,'' Coupal said. Staff Writer David M. Drucker contributed to this report. Harrison Sheppard, (916)446-6723 harrison.sheppard(at)dailynews.com TAX PLAN Here are details of the Assembly Democrats' proposal to fund transportation in California: --Exempt gasoline from the state's 5 percent sales tax, currently about 11 cents per gallon, or about $1.3 billion total. --Raise the statewide sales tax by one-quarter percent for five years. It would revert to its current level in 2010 if Congress allows the current cut in the estate tax to expire that year as planned, bringing in the equivalent amount of revenue to California. --Raise the 18-cent-per-gallon excise tax Excise Tax 1. An indirect tax charged on the sale of a particular good. 2. A penalty tax applied to ineligible transactions in retirement accounts. This penalty is assessed by and paid to the IRS. Notes: 1. on gasoline by 1 cent in 2006-07, 2 cents in 2010-11 and another 1 cent in 2015-16. It would also be increased by 3 percent every five years to account for inflation. --The state would sell $10 billion in bonds to pay for transportation projects, repaying the debt through the increased gasoline excise tax. CAPTION(S): box Box: TAX PLAN (see text) |
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