Taxes. Personal Income.

TAXES. PERSONAL INCOME. INITIATIVE STATUTE. Repeals specified statutes imposing tax on personal income of California and out-of-state residents. Imposes 2.5% tax on entire personal gross income of residents and specified out-of-state residents. Imposes additional 2.5% tax on gross income in excess of $52,000 for five years, and as extended, in five-year increments, by two-thirds vote of Legislature. Requires annual cost-of-living adjustment to $52,000 threshold. Provides no deductions, exemptions, exclusions be made in determining gross income, unless in connection with trade, business, or required by federal or constitutional law. Requires postcard size returns be available for defined individuals. Summary of estimate by Legislative Analyst and Director of Finance of fiscal impact on state and local governments: The overall impact of this measure is unknown and would depend upon the resolution of certain legal questions and implementing legislation. With certain assumptions as to how these issues would be resolved, the major fiscal impact would include annual state revenue losses of approximately $179 million per year beginning in 1995-96; annual state savings of approximately $90 million in K-14 school apportionment expenses, beginning in 1995-96 and continuing for an unknown period of time; increases in state administrative costs for tax return processing of several million dollars per year, beginning in 1994-95