Income Tax California

For most taxpayers, filing a California income tax return is fairly easy once the federal return is filled out. But it isn't a simple matter of copying numbers. California has not adopted several key changes in the federal tax code that were effective in the 1994 tax year. Although last year Gov. Pete Wilson and the Legislature announced that the top state tax brackets would expire, the expiration was effective this year, not for 1995.

Among state lawmakers there is an unwritten rule: Republicans may be in the minority, but they are the ones most responsible for shaping any tax cuts. It's a rule Gov. Gray Davis flouted when he scrapped the GOP's tax cut plan last week and substituted his own. It came with a price. The governor has the bulk of the power in annual budget negotiations; he can delete any lawmaker's pet project. But his power is not absolute.

Just 24 hours after Sen. Dianne Feinstein accused her leading Republican rival of dodging his taxes, GOP candidate Michael Huffington responded in kind Wednesday with a new television commercial raising questions about whether Feinstein has paid enough federal taxes. Huffington's ad says he has paid "every penny in tax that he owes," rejecting a charge made in a Feinstein television ad released Tuesday that Huffington "avoided California taxes" by maintaining a residence in Texas until 1991.

Bad policy. Not bad politics. That sums up Gov. Gray Davis' ridiculed proposal to excuse public school teachers from paying the state income tax. Davis won't yet concede it's poor policy because he's still enjoying the political profit. He broke out of his boring mode and became bold, attracting attention from the national news media and fellow pols. "I give him an A-plus for creativity and thinking outside the box," says Sen.

President Clinton signed legislation Wednesday that bars California and other states from taxing pension incomes of former residents, in what is believed to be the first assault on so-called source taxes that overall bring more than $500 million annually to California.

For the millions of average people who earned money in the Golden State last year, filing a California income tax return is no longer a simple matter of copying numbers from the federal return that goes to the Internal Revenue Service. For the first time in at least a decade, California legislators voted not to adopt key changes made to the federal Tax Code, said Irene Goodman, who heads the California tax group of the Commerce Clearing House.

Gov. George Deukmejian's chief budget adviser said Tuesday that he is committed to taking "whatever steps are necessary," including making budget cuts, to keep the state solvent this year, despite an unexpected drop of as much as $1 billion in tax revenues. The promise to keep the state in the black was made by state Finance Director Jesse R. Huff during a briefing on the fiscal crisis to members of the Assembly Ways and Means Committee.

Instead of hiring day laborers who wait on street corners around Los Angeles, Val Holwerda, owner of Bristol Press in West Los Angeles, frequently called the Santa Monica branch of the California Employment Development Department for help. In 1987 and 1988, when she first opened the business, Holwerda hired more than 100 different casual laborers, paying them about $26 a day to move boxes, put up shelves, collate papers, sweep floors and perform other tasks.

Among state lawmakers there is an unwritten rule: Republicans may be in the minority, but they are the ones most responsible for shaping any tax cuts. It's a rule Gov. Gray Davis flouted when he scrapped the GOP's tax cut plan last week and substituted his own. It came with a price. The governor has the bulk of the power in annual budget negotiations; he can delete any lawmaker's pet project. But his power is not absolute.

For the second year running, Gov. Pete Wilson and Republican legislative leaders are backing off on their insistence on an across-the-board personal income tax cut. And in response, state Senate Democrats are relenting on a GOP-backed plan to shave bank and corporate taxes, all of which is laying the groundwork for a compromise on the state's $63-billion state budget for the fiscal year beginning July 1.

Right up front, I'll confess to a conflict: My wife is a high school teacher. One daughter is an elementary teacher. A close friend since college also teaches. So does his wife. You get the idea: I can't go home, sit down to a Christmas dinner or chase a golf ball without hearing about education. About administration blather, a ramshackle classroom or the latest misguided "reform." Or an outstanding student who just won a big scholarship or merely said something witty.

State Senate Majority Leader Richard Polanco is asking taxpayers to remember Mexican American veterans when they fill out their state income tax forms this year by checking off a contribution to upgrade the California Mexican American Veterans Memorial in Sacramento. "The time has come now to build upon the statue, to make the memorial more visual and prominent in the capital," he said Tuesday.

Rep. Howard P. "Buck" McKeon (R-Santa Clarita) said he will seek a congressional investigation into why Californians are called in for face-to-face audits by the Internal Revenue Service at roughly twice the rate of the rest of the nation. McKeon, who has previously pushed IRS reform legislation, was responding to a report on IRS audit rates released Saturday by a watchdog group. The report found that in Southern California, the nation's audit capital, 1.

A measure that would have given state income tax information to cities to help them track down business-tax scofflaws has been vetoed by Gov. Pete Wilson in the face of opposition by the Writers Guild of America. The guild organized entertainment industry groups, including songwriters and broadcast artists, to push for the veto as part of its opposition to a Los Angeles ordinance requiring home-based businesses to obtain a city business permit.

Gov. Pete Wilson on Wednesday signed what advocates are calling the largest reduction in California personal income taxes since World War II, settling one of Sacramento's sharpest political battles and demonstrating the state's robust economic health. The total package of tax cuts that legislators adopted last month with just two dissenting votes will be worth nearly $1 billion when it is fully implemented in 1999.

The debate over Gov. Pete Wilson's sudden pitch to cut the state income tax has quickly found a focus--the impact a tax cut would have on public school budgets. Because public education is guaranteed the largest chunk of the state's budget, any drop in tax revenue automatically reduces the amount of money that can go to schools.

Having already rejected Gov. Pete Wilson's proposed 15% income tax cut, the state Senate on Thursday swiftly approved its version of the $63-billion state budget, setting up a fight with Assembly Republicans over the tax cut. The 40-member Senate approved its budget 36 to 1, in contrast to the raucous GOP-controlled Assembly, which approved its spending plan Wednesday with no votes to spare, along partisan lines and after hours of debate.

Republican Gov. Pete Wilson's proposed 15% across-the-board income tax cut for individual Californians and businesses was defeated Tuesday by Senate Democrats and independents, the second time in two years that the governor's cut has been crushed in the upper house. The bill, narrowly approved last month by the Republican-controlled Assembly, failed in the Senate Revenue and Taxation Committee when only two GOP members voted for it. Four Democrats and two independents voted no.

Pressure for a tax cut aimed at middle-income earners built Thursday as Republican legislators lauded Gov. Pete Wilson's $1-billion tax reduction plan and Democratic leaders derided the proposal but left open the possibility of some sort of tax cut. Even as Assembly Speaker Cruz Bustamante and Senate President Pro Tem Bill Lockyer declared that Wilson's plan had virtually no support among Democrats, they were careful not to rule out some form of tax reduction.