The bipartisan commission set up to reform California’s tax system is considering reducing income tax rates and increasing the gas tax. That’s a great idea.
The income tax raises revenue but affects behavior in unfavorable ways. A tax on business discourages investment, and a tax on personal income discourages savings or labor. Increasing the tax on gas will also affect behavior, but in a favorable direction. Californians will drive less, and that will reduce pollution, urban sprawl and greenhouse gas emissions.