Tax Reforms

Retired Gen. Wesley K. Clark on Monday unveiled the most sweeping tax-reform plan of any of the Democratic presidential hopefuls, a plan he said would dramatically simplify tax returns and benefit 31 million families without increasing the budget deficit. Under Clark's proposal, a family of four making up to $50,000 a year would pay no federal income tax at all, and all families with children making up to $100,000 would see a reduction in their tax bill.

A year after defeating secession, Los Angeles Mayor James K. Hahn said in his annual State of the Valley speech Thursday that city efforts had contributed to a drop in crime and an increase in economic development in the San Fernando Valley, but he warned that budget problems mean tougher times ahead. Hahn ran into skepticism from leaders of the Valley Industry and Commerce Assn.

The most feared man in Washington state politics may be a giggling, pasty-faced watch salesman who's about to take himself on another ride. "Hoo-ha!" he likes to say. "This is Tim Eyman!" In four short years, the man known around these parts as the initiative king has risen from suburban obscurity to become the Moses of the tax-burdened masses. He has led four popular anti-tax initiatives, is leading a fifth, and has attracted a large and devout following in the state's fields and farmlands.

As California struggles with a historic budget shortfall, a growing number of lawmakers are hoping the crisis finally nudges the Legislature into untangling a state tax system that they argue shortchanges many large counties, including Los Angeles, Orange and San Diego.

Los Angeles City Councilman Tom LaBonge proposed Wednesday that 75% of business taxes collected through a new crackdown on scofflaws be devoted to reforms, including possible rate reductions and tax code simplifications. As a result of a new state law, the city can learn the identity of all Los Angeles companies paying state taxes, information that can be cross-checked with city tax rolls to determine which companies are not paying required city taxes.

It's clear that the way California cities pay the bills for basic services makes no sense. It is a dysfunctional mess. For 20 years, California cities have demanded reform. Last month, the state Assembly took the first baby step by passing AB680, a pilot effort to share sales taxes revenue growth among Sacramento-area cities. But guess who led the opposition? The League of California Cities.

Thirteen months after he took office with promises to modernize Mexico, President Vicente Fox greets the new year with a much meeker version of the radical fiscal reform he once sought. Mexico badly needs to plug the holes in a feeble tax-collection system that has left the country heavily dependent on oil exports, a volatile source of income, analysts say. The nation boasts the second-largest economy in Latin America but has one of the worst tax-collection rates in the region.

Mexico's Congress passed a $7.5-billion package of new taxes Monday, including new levies on telephone services, soft drinks and cigarettes, meant to boost government income and ease dependence on oil exports. The taxes were drawn up following months of debate by the nation's main political parties after they rejected key elements of President Vicente Fox's fiscal reform package presented in April. New revenues from the tax reforms were estimated at $7.

Mexico's lower house of Congress has reduced tax breaks for the private sector in the first of a series of reforms aimed at bolstering government revenues and reducing the country's dependence on volatile oil-export income. The action over the weekend came as legislators faced a deadline to approve tax reforms and include them in the government's 2002 budget before Jan. 1. Mexico is Latin America's second-largest economy but has one of the region's lowest tax-collection rates, at about 10.

Saying he wants to get the word out that Los Angeles is friendly to business, Mayor Jim Hahn on Thursday signed six tax-reform ordinances designed to entice more businesses and jobs to the city. The measures were drafted by a committee appointed by city officials two years ago and approved last month by the Los Angeles City Council.