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Voters to decide whether to prolong the life of Proposition 30

| Jul 2, 2016 | Tax Controversies |

California’s 2016 ballot is shaping up to be very interesting, as voters will be asked to decide everything from whether proposed legislation should be published online for at least 72 hours before state lawmakers can vote to whether to legalize the sale and use of marijuana for recreational purposes.

It looks as if this already diverse and fascinating ballot will become even more so, as voters will now be asked to decide whether to extend the life of Proposition 30.

For those unfamiliar with Proposition 30, it was an initiative passed back in 2012 that created a higher tax bracket for 1) residents earning more than $250,000 per year and 2) so-called “pass-through” businesses (general partnerships, limited partnerships, etc.) that enable partners to be taxed directly on their share of profits.  

While Proposition 30 was originally set to lapse in 2018, the ballot measure asks voters whether this expiration date should be extended by 12 years, filling the state’s coffers with an estimated $5 billion a year in revenue.

Supporters of extending Proposition 30 point to recent remarks by Governor Jerry Brown indicating that the state could see the deficit balloon up to $4 billion as soon as 2019 if the these temporary income tax rates expire due to growing healthcare and education costs.

Opponents, however, have expressed concern over whether sufficient reforms have been implemented within these two sectors to justify the extension of the tax hikes.

As to how the issue may be decided come November 8, early polling has shown as many as 62 percent of likely voters favor extending the life of Proposition 30.

Stay tuned for updates …   

If you have questions regarding your rights and responsibilities under both state and federal tax laws, consider speaking with an experienced legal professional.

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