THE CAL SIMPLE TAX PLAN

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UNITED CALIFORNIANS  

FOR TAX REFORM  

info@CalSimpleTax.org   

 

THE CALIFORNIA SIMPLE TAX

What is the California Simple Tax Plan?


The California Simple tax plan creates an alternative to the current tax code and forms. It provides taxpayers the choice of selecting a simple, easy to use, tax form featuring a reduced tax rate of 2.5% and a generous Standard Deduction.

Our Plan builds on Tax Form 540-2EZ introduced in 1999. This post card sized tax form initially retained the $400 limit on Interest income established by the IRS on form 1040EZ. It also did not allow any income from dividends or pensions nor did it allow use by Seniors over 65. Through extensive lobbying efforts we were able to have the limits removed on interest Income and age.

In our Initiative we now further propose that earnings from Dividends, IRA distributions, and Pensions be allowed. In addition our initiative more than doubles the Standard Deduction to $7020 for single taxpayer and $14040 for married taxpayers filing jointly and replaces the existing six tax rates with a single rate of 2.5 percent. Filing your taxes will be as simple as one, two, three. Just add up your income, subtract the standard deduction and multiply by 0.025.

Taxpayers who wish to continue to itemized their deductions and claim tax credits and exemptions, with all the effort and expense as well as the headaches of the accompanying record keeping can continue to do so by using the current tax code and CA 540 tax forms.

Title and Summary of the proposed Measure

The Attorney General Of California has prepared the following title and summary of the chief purpose and points of the proposed measure.

ALTERNATIVE INCOME TAX RATE, INITIATIVE STATUTE

Amends California’s income tax law to provide an alternative standard deduction and tax rate for taxpayers with adjusted gross income for the taxable year of $50,000 or less for individuals, and $100,000 or less for married couples filing jointly.

Qualifying taxpayers may choose to take a deduction equal to California's minimum wage effective for the taxable year, multiplied by 1,040 for individuals, or multiplied by 2080 for married couples filing jointly, and pay 2.5% tax on the adjusted amount. Directs the Franchise Tax Board to prepare a form for use by taxpayers. Summary of estimate by Legislative Analyst and Director of Finance of fiscal impact on state and local governments: The measure would have the following major fiscal effects: Reduction in state income tax revenues of approximately $900 million in 2004-05 and $700 million annually thereafter.

PRINTER-FRIENDLY COPY OF INITIATIVE:

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