Closing tax loopholes one way to fix state budget

California

A recent Los Angeles Times poll found that just 11 percent of Californians support closing the deficit with new taxes, while 48 percent said it should be addressed only with spending cuts. But Democratic legislators in California want to raise taxes to close a whopping state budget deficit, as they denounce Gov. Arnold Schwarzenegger's initial proposal to slash spending.

Democrats such as Assembly Speaker Fabian Núñez sidestep questions about raising personal or corporate income taxes or sales taxes. Instead, they say such things as this statement from Núñez: "Revenue sources from closing tax loopholes and credits must be on the table." But Núñez, et al., are very vague when it comes to specifics. [snip]

Allowing homeowners to deduct mortgage interest on their state income taxes is a $4.9 billion-a-year tax break that, according to a study by the Legislature's budget analyst, flows largely to more affluent taxpayers because they are most likely to own homes and itemize their tax deductions.

The second-largest tax "loophole" is exempting most food from sales taxes, which was scored at $4.7 billion a year. While its benefits flow more evenly to all income groups, it, too, is a longstanding and highly popular tax break. That's also true of the No. 3 tax break, the $4.5 billion income-tax exemption given to pension contributions by employers, and No. 4, the $4 billion tax exemption for employer-supplied health care benefits.

[ loopholes? deducting interest paid while paying taxes on interest earned? food?? ...... they think it's their money]

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