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Volatility of the Personal Income Tax Base


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[PDF] Volatility of California’s Personal Income Tax Structure

September 28, 2017 - For many years, personal income tax (PIT) volatility has complicated budgetary planning. This report analyzes the causes of PIT volatility. We find that about 40 percent of PIT volatility is due to choices about which types of income to tax, another 40 percent is due to the progressive rate structure, and the last 20 percent is due to deductions and credits. The Legislature could choose to make the tax less volatile, but actions to reduce volatility could reduce future growth of state tax revenues.

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Perspectives on State Revenues 2004-05

February 18, 2004 - 2003-04 Forecast: We forecast that General Fund revenues and transfers will total $74.1 billion in the current year, a $2.8 billion (3.9 percent) increase from 2002-03. This is down $491 million from the budget forecast, of which $477 million is related to our lower estimate of personal income tax (PIT) revenues. 2004-05 Forecast: We forecast that revenues and transfers will total $75.9 billion in 2004-05, a $1.7 billion (2.4 percent) increase from the current year. This is down about $525 million from the new budget's projection, primarily reflecting the ongoing effects of the current-year reduction in PIT receipts.

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California's Changing Income Distribution

August 10, 2000 - In recent decades the distribution of adjusted gross income reported on California tax returns has shifted significantly, with the share attributable to the top 20 percent of returns rising and that for the bottom 80 percent falling. We examine the changes in California's income distribution and their causes.

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Revenue Volatility In California

January 20, 2005 - Following the boom-bust revenue cycle in recent years, concerns have developed about volatility in California's General Fund revenues. This brief quantifies the amount of revenue volatility experienced in California during the past quarter century, identifies the main causes of the volatility, and discusses the outlook for volatility in the future. We also highlight some options for reducing future impacts of volatility—both those involving changes to the tax system and budgetary changes—and discuss the trade-offs inherent in each of the alternatives.

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[PDF] Perspectives on State Revenues 1997-98

February 19, 1997 - Perspectives on State Revenues 1997-98

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The 2014-15 Budget: Overview of the May Revision

May 16, 2014 - On May 13, 2014, the Governor released the 2014-15 May Revision to his annual budget proposal. The package continues to build reserves and pay down debts, including a new proposal to fund the teachers' pension system over about 30 years. Our May revenue forecast projects $2.5 billion higher revenues compared with that of the administration—not substantially different given the size of the state budget. In addition, we project over $700 million more in local property taxes for school districts. If the Legislature were to adopt our office's higher revenue forecast and property tax estimates, General Fund spending under Proposition 98 would increase $2.7 billion, relative to the administration's May forecast. Assuming that the administration's non-Proposition 98 spending estimates are accurate, this would leave around $500 million available for building reserves, paying down more debts, and/or other state priorities.