During a discussion at the 2015 Cal Tax Annual Members meeting, Board of Equalization Vice Chair George Runner suggested replacing California’s income tax with a sales tax on services to make life easier for taxpayers.

“If you want real tax reform, we ought to look at eliminating the state’s personal and corporate income tax,” said Runner. “One less tax agency would make California a far more attractive place for jobs, retirees and investment.”

George Runner

Runner noted that if California eliminated income tax more companies would base themselves in California. Also, more residents would stay in the state upon retirement, leading to more revenue for the State of California.

Seven states do not have an income tax. Those states include Alaska, Florida, Nevada, South Dakota, Texas, Washington and Wyoming.

Runner said true tax reform makes tax systems simpler, rather than more complicated. He called Senate Bill 8 (Hertzberg), which would extend sales tax to services, a massive tax increase. In its current form the legislation would make California’s tax system more complicated and add thousands of state auditors and tax collectors to state payrolls.

“Any shift to a broader reliance on sales tax must be combined with real tax reform that removes barriers to doing business in our state,” added Runner. “Don’t be seduced by false reform that makes California’s tax code more complicated for everyone.”

Runner called for dynamic economic modeling of the likely benefits of an elimination of income tax and a shift to a consumption-based tax system. He encouraged businesses to conduct their own modeling to weigh the pros and cons of such a structure.

The annual meeting hosted by Cal Tax attracts taxpayers from many industries and gives the business community an opportunity to be updated on legislative affairs.

Elected in November 2010 and re-elected in 2014, George Runner represents more than nine million Californians as a member of the State Board of Equalization. For more information, visit the website.