The California Report, September 18, 2009 Host Scott Shafer
The business net receipts tax is a way to implement something like a value-added tax at the state level. Nothing quite like this has ever been tried before. So this is a novel tax instrument relying on advances in economic theory, but it has some characteristics that are similar to sales taxes—it’s a consumption tax—and some characteristics similar to business-income taxes. It can be viewed as a hybrid between a business-income tax and a sales tax.
The Oakland Tribune, July 25, 2009 by Josh Richman
“It has some flavor of raising taxes without actually raising taxes,” agreed David Gamage, a tax law expert and associate professor at University of California-Berkeley’s Boalt Hall School of Law. “It may be the most obvious impact for some taxpayers because you actually see the money coming out of your paycheck, but in the context where there are only bad (state budget) options, I don’t think this is going to strike anybody as the worst option.”
Radio Netherlands Worldwide, July 2, 2009 Host Marijke Peters
Imagine that a business runs out of money, but still has a bunch of debts. It goes bankrupt. States can’t go bankrupt, so some bills just end up not being paid…. It’s widely agreed that California’s budgeting process is dysfunctional. The combination of the two-thirds majority rules to pass budgets and two political parties that vehemently disagree on taxes and spending, repeatedly create paralysis.
KQED-FM, Forum with Michael Krasny, June 10, 2009 Host Michael Krasny
“The city’s contracts are potentially all up in the air. More or less everything the city does is reviewable by a bankruptcy judge in a bankruptcy court. The bankruptcy court can tear up contracts that otherwise the city couldn’t alter—and force the city to restructure its finances in ways that the political leaders wouldn’t necessarily approve. In fact, the last thing any entity, public or private, wants to happen is for lots of talk to be out there about bankruptcy without bankruptcy actually happening, because you get all the costs without any of the potential benefits.”
San Francisco Chronicle, June 6, 2009 by Marisa Lagos
UC Berkeley assistant law professor David Gamage said cases such as this one are not as clear cut as both sides would like. “I would say an inquiry like this is very fact intensive,” he said. “The law recognizes that taxpayers have the right to organize their affairs to minimize their taxes, but only within the bounds of what is legal.”
KTVU News, April 26, 2009 by Diane Guerrazzi
“It’s most important long term aspect is it significantly improves California’s rainy day fund, our budget stabilization fund. What 1A requires the state to do is save more of the extra revenues that the state generates during good economic times. The idea is to give the government more flexibility to deal with downturns.”
SF Weekly, January 14, 2009 by Peter Jamison
“The literature is fairly robust on this: A large number of the people don’t switch,” said David Gamage, an expert in consumer issues and assistant law professor…. “Whatever the default option is becomes the default.”
Christian Science Monitor, July 26, by Ben Arnoldyhttp://www.csmonitor.com/2008/0726/p25s34-uspo.html“Structural inequality has been rising at a level we haven’t seen since before the Great Depression,” says David Gamage. “And the natural response, both psychologically and economically, is to make the tax system more progressive.”