Angelides To Cut Taxes For Californians

by Mike Godfrey, Tax-News.com, Washington

18 August 2006

Phil Angelides, the Democratic nominee for the California Governorship in November's elections, is seeking to ditch his high-tax image by pledging $1.4 billion in tax cuts for mainly middle income earners and small business owners.

Outlining his tax plans in a speech in Hollywood this week, Angelides promised to put the state's tax code "back on the side of the middle class and small businesses" by offering $788 million in tax cuts for families earning up to $100,000 per year, and $536 million in small business tax reductions.

However, larger corporations and wealthy individuals will face increased tax bills under Angelides's plan: individuals who make more than $250,000 a year and couples making $500,000 or more annually will see tax increased to 11% from 10%

Angelides has also proposed a commission to find and eliminate corporate tax loopholes that his campaign has estimated could raise $2 billion for California's state coffers, which are expected to be $4.5 billion in deficit for the next fiscal year.

According to Angelides, at lest 46 corporations with incomes of at least $1 billion in 2001 paid no state taxes in that year.

Meanwhile, Republican Governor Arnold Schwarzenegger's campaign has sought to discredit Angelides by saying that the Democrat's figures don't add up and that he will have to raise other taxes to pay for his tax cuts.

In a written statement, Schwarzenegger campaign spokesman Matt David also accused Angelides of having "no credibility" on tax because he has spent his political career lobbying to increase tax rates.

"It's laughable that 83 days out from the election, Angelides is pandering on his central campaign promise of higher taxes," David said.

Schwarzenegger is campaigning on his familiar pledge to leave tax rates on hold and solve the state's fiscal woes through cuts in spending.

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