Skelton: Stimulate California by Restoring the State Sales Tax Deduction
Joe Mathews -
January 19, 2009 - 1:57pm
Los Angeles Times columnist George Skelton has an interesting idea for stimulating the economy: Have the federal government restore the tax deduction for state sales taxes.
In California, this would blunt some of the blow from the expected sales tax hike to help fill an estimated $40 billion shortfall in the state budget over this year and next. Skelton argues that the credit would spur consumer spending -- making it more of a pure stimulus. The sales tax credit existed before the 1986 tax bill. Under President Bush, taxpayers could take a credit for either state income tax or state sales tax, but not both.
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