California

Gerald Parsky is a big fan of independent thinking. He's also a champion of California. Parsky is optimistic that the two will someday meet.

Parsky - the influential chairman of Aurora Capital Group, a former University of California regent and an adviser to the governor and several Republican presidents - told Milken Institute Associates at a private breakfast meeting that without "independent thinkers" the state cannot address its biggest challenges.

Chief among those challenges, he said, is altering the current tax structure that fosters boom-and-bust revenue cycles. Tax reform was one of several goals undertaken last year by the governor's Commission on the 21st Century Economy, of which Parsky was chairman.

The task force settled on a set of interrelated proposals that would reduce and simplify the personal income tax, end the corporate tax and eliminate the state sales tax. To compensate for the lost revenue, the commission recommended a business net receipts levy that would tax not only goods but also services. This would broaden the tax base, offer a more stable source of revenue and reduce dependence on the personal income tax that fluctuates with each economic boom and bust, he said.

The commission issued its report in late 2009. While some reforms are appealing to Democrats and others to Republicans, Parsky said, they must be enacted in concert if they are to fix the state's financial woes. He said tax reform and the state's other big issues - including the required two-thirds vote in the Legislature to pass a budget or raise taxes, political districts drawn to favor one party over the other, and the initiative process - can't be solved by lawmakers who adhere to party lines.

This event was open only to Milken Institute Associates. To join or learn more about the program, please contact Mindy Silverstein, Director of the Associates, at (310) 570-4634 or msilverstein@milkeninstitute.org.

Tweet