Freedom Line Blog

Following up on a previous diagnosis of all that ails California, CFIF Senior Fellow Troy Senik is out today with a prescription for the Golden State to get back on the road to recovery.

Senik’s piece in City Journal doesn’t hold out much hope for newly elected Governor Jerry Brown, but the author does shed light on one proposal that might garner enough votes for a simplified tax code:

California would therefore do well to take the advice of economist Arthur Laffer, not just because of his status as one of the authors of Reaganomics but because he is an example of the state’s woes, having packed up his California-based fund-management business in 2006 and relocated to Tennessee. By Laffer’s estimates, if California abandoned its current, highly progressive income-tax system in favor of a statewide flat tax of no more than 6 percent on personal income and net business sales, it could completely abolish all property taxes, state gas taxes, and state payroll taxes, as well as all current state and local sales taxes, without losing revenue. And that’s without factoring in the increased economic activity that such a dramatic change to the tax code would almost certainly generate. This change would once again require the support of a two-thirds majority in the legislature, but its appeal just might be broad enough to attract such a coalition.

Read the entire article here.