By Dan Walters
dwalters@sacbee.com The Sacramento Bee
Published: Monday, Aug. 30, 2010 – 12:00 am | Page 3A

One can find broad agreement in the Capitol – and probably in the public – that California’s tax systems, which collect upwards of $200 billion a year, are a mess.

But that’s where accord on taxes ends. Everyone, it seems, has a different take on how taxes should be made fairer, more relevant and easier to administer – usually reflecting an old adage: “Don’t tax you, don’t tax me, tax the fellow behind the tree.”

That’s why, for decades, tax reform has been an issue about which there is endless discussion but no action. Action would require consensus of some kind and there is none, as the Legislature demonstrated when it ignored a blue-ribbon tax commission’s tax overhaul recommendations.

Instead, we see constant skirmishes over small pieces of the tax puzzle, usually efforts by economic interest groups to win special tax breaks for themselves and/or by other groups to undo tax breaks.

At the moment, there’s an especially high interest in California’s taxes because its economy is mired in what’s been dubbed the Great Recession, and state and local governments are dripping with red ink.

Those who contend that more tax breaks are needed to jump-start the economy – Republicans and business groups, generally – are pitted against Democrats and unions that want what they regard as unjustified tax loopholes to be closed so that public coffers would see more money.

Last year, for instance, those Democrats agreed to give business about $2 billion in additional tax breaks as the Republican price for a state budget. Now they want to repeal them via a ballot initiative, Proposition 24.

Democrats are also sending Gov. Arnold Schwarzenegger a series of bills that would require more reportage of business tax breaks and limit their existence. But Schwarzenegger, who advocates business tax breaks to spur investment, is likely to veto them.

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