After years of raising taxes and increasing the burden of spending, the Governator may be reversing his path. California’s Governor is flirting with the idea of genuine tax reform. I suppose it is welcome news when any politician endorses a flat tax, but battlefield conversions sometimes are a bit insincere. On the other hand, in his pre-Governor days, Schwarzenegger often expressed very sound views – including this video praising Milton Friedman. Here’s the blurb from the L.A. Times on the Governor’s flat tax trial balloon:
Could the flat tax come to California? Gov. Arnold Schwarzenegger said today that he would like to see such “radical” proposals come out of a commission now studying an overhaul of the state’s tax system. The governor told the editorial board of the Sacramento Bee that he hoped the commission would not be afraid … The current system, based on highly unstable income tax revenue that fluctuates with the economy, “doesn’t work,” Schwarzenegger said. Advocates of a flat tax, which applies a single tax rate to all income, say it increases compliance with the tax codes because it is so simple and easy to understand. But opponents dislike that it taxes the wealthy at the same rates as the poor.