They’d replace state income tax with an employer paid payroll tax. Do they really think that’d have zero impact on job creation and companies wouldn’t relocate? Wow…
This can be a flat payroll tax like Medicare and Social security tax. Flat tax is good since all the taxpayers would have the skin in the game.
This would be good for hanera since he’ll pay zero state income tax and his dividend income would be state income free. Also good for elt1 since he can pay himself as dividend and no payroll income.
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Why doesn’t California just declare bankruptcy…Discharge it’s bonds and pension liability and let Washington hold the bag…It is Puerto Rico’s plan…
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States can’t legally declare bankruptcy. It has to do with federal bankruptcy law only allows municipalities. Also, there’s language in the constitution about states and contracts. States aren’t allowed to default on them.
It looks like a good idea to me. Why is this financial suicide? Employers will cut salary by around 10% and pay that to the state and then deduct it when they pay corporate taxes. At the outset it looks like a fantastic idea to me.
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Also, the dividends will be taxed separately directly by the state - some US states already do this.
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Great idea. And it simplifies the tax code considerably. Consolidating several state taxes into one.
The unintended consequences of it will be amazing.
If employers lower the worker’s salary by 10%, and use the salary cut to pay state mandatory charity tax, worker’s nominal pay could be lower than other states. Say after the 10% wage deduction, your salary is 90% of the old salary. You may not be able to qualify for the mortgages.
So far California homebuyers have had an unfair advantage since mortgage qualification is based on pretax income. So a Califonrian can buy the same house as a Seattlite even though our after tax income is 10% lower.
So this policy could tank our housing market. So I’m against it.
Also it would remove the illusion that we make more money than people in other states. Now we can’t claim to earn 10% more than our friend in Seattle since the nominal salary would be the same.
How come you are not against lowering the limit on mortgage interests deduction and capping SALT deductions?
How do you know I am not against it? I am against all the tax hikes.
Minimize tax and let the people work and enjoy their labor
Sounds good to me. I want a house for living, not for speculating, and it’s insane that it costs the price of a mansion 
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Homebuyers are a tiny minority and they are in the very stage of transition. So homebuyers are not even a political group.
When I say “I am against it”, it’s not just my personal opinion. It’s a typical response from homeowners. Since tenants are neutral to housing price change, the political decision is not to tank the home price. Economists and our elitists won’t allow it to happen, it’s simply a protest just like “not my president”, it’s not a serious policy discussion.