LA Times

LOS ANGELES TIMES: Capitol Journal: Taxing Dodgers tickets would be a fiscal win for the state

June 20, 2016

By George Skelton

If California applied the sales tax to Dodgers tickets and other sporting events, it could raise $320 million a year.

And why would the state do that? To lower the overall sales tax rate, rely less on the roller-coaster income taxes of rich people and overhaul California’s rickety, archaic revenue system. Lift it out of the mid-20th century and into the 21st.

It would have to do much more, of course, than merely tax spectator sports.

It could tax the services of agents for athletes, movie stars and other entertainers. That would generate $234 million, according to a report released last week by state Controller Betty Yee.

Taxing auto repair labor would net $1 billion. Now, just the parts are taxed.

Lawyer work? That’s potentially $3.6 billion.

A long list of tax targets has been gabbed about for half a century in Sacramento. But most politicians are cowards on the subject.

It involves extending the sales tax to services and matching revenue with reality. In recent decades, California’s economy — sixth largest in the world — has shifted dramatically from being driven predominately by manufacturing to services.

We’re taxing retail sales but not services. Consequently, the sales tax isn’t producing nearly what it used to. In 1950, it supplied 60% of state general fund revenue. Today, it’s only about 22%.

To fill that gap, we’ve greatly escalated the income tax. In 1950, it filled just 10% of the general fund. Today it’s about 70%. And nearly half of that comes from the top 1%, whose incomes — especially their capital gains — function like a yo-yo.


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