California has one of the highest tax burdens in the nation. Yet, the government can’t pay its bills and is on the brink of financial collapse. If changes are not made to business as usual policies in Sacramento, our state faces long-term economic instability.
If we want to reverse this trend and grow our economy, we must begin by establishing a mandatory spending cap on our state government. It is essential that we force our state leaders to prioritize spending. They need to learn what every family in California already understands – you can’t spend what you don’t have.
We also need to bring jobs back. To accomplish this, we must grow our economy and reduce the burden on small businesses. Tax reform is the key. Our state’s complex and oppressive tax laws drive employers out of California.
A healthy economy will require the scraping of the tax code. In place of corporate and personal income taxes, we should create a simple consumption oriented retail sales tax. According to a recent report by the American Enterprise Institute, that sales tax would only need to be about 10% to fund our government at current levels.
Our state can either lead the way in economic recovery by establishing a pro-investment, pro-job creation environment or we can lead the way in the opposite direction. If no changes are made, California is on auto-pilot to become permanently economically depressed. For this reason, I have urged Governor Schwarzenegger and other state leaders to seriously consider the changes I have outlined (click here for more info).