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Senator wants tax hike for budget gridlock

July 31, 2010 12:00:00 AM PDT
A State Senate leader is proposing a controversial solution to the budget impasse -- hiking certain taxes.Democrat Sen. Darrell Steinberg wants to increase state income taxes and vehicle licensing fees and reduce the state sales tax.

The tax hikes would apply to all Californians, but less so for the most affluent.

Some Republicans and taxpayer groups say the state already has one of the highest income taxes in the country, and raising it would only further hurt the economy.

"One of the problems in California is that we are overly reliant on the highest income earners. It's not a stretch to say that as goes the stock market so goes California's budget," said Steinberg.

Steinberg said raising state income taxes and vehicle licensing fees are all tax deductible when paying your federal income taxes, so that means Californians would actually get reimbursed at least a little by the feds.