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Sat 26 Nov, 2011 06:17 am
"While maintaining California’s progressive income tax structure, we would reduce rates for every bracket and reduce the sales tax on goods from 5% to 4.5% while broadening the sales tax at a 5% rate to apply to services, which are more discretionary. Education and medical care would be exempted."
What do "bracket" and "discretionary" here mean?
A bracket is an income range. I don't know what CA brackets are in fact, so I'm making up numbers to provide an example: If your income is under $15,000, you owe no tax. If your income bracket is $15,000 to $30,000 you would be taxed at a rate ofr 2%. If from $30,000 to $60,000 you would pay 3% in taxes. Again, those numbers bear no relation to what CA actually says you must pay, they are just illustrative of the concept.
Not sure about how they are using discretionary. Prbably they mean "goods" are things you have to buy, like food or clothing, so taxes on them are lower, whereas services tend to be things that are less necessary for life and buying them is more optional, so they are taxed higher, but necessary services like education and medical care are not taxed at all.
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