California Budget Project: COTCE Proposals Would Increase Budget Gaps, Tax Low- and Middle-Income Californians
ITEP Work in ActionThe core of the COTCE proposals would reduce the state’s reliance on the personal income tax by reducing the number of rates and the maximum tax rate, eliminate the corporate income tax and the state’s share of the sales and use tax, and replace the revenues lost by imposing a new business net receipts tax (BNRT).1 The BNRT is a “value-added” tax on consumption that would be paid by businesses based on the difference between the amount they earn from the sale of goods and services and the amount they pay for goods and services.2 The COTCE has also considered imposing a new tax on carbon based fuels.