ION OF PERSONS, CORPORATIONS, INSURERS. INITIATIVE CONSTITUTIONAL AMENDMENT. Amends personal and corporate income tax provisions of article XIII, sections 26 and 27, and taxation of insurance companies provisions of article XIII, section 28, of California Constitution. Establishes formula for computing individual income tax rate, with ceiling of 7 1/2%. Sets maximum corporate income tax rate at 6 1/4%. Requires Legislature to define taxable income for persons and corporations. Allows Legislature to classify types of organizations as tax-exempt corporations. Eliminates prohibition on taxing income of insurance companies. Provides that effective date of amendment shall be January I, 1981. Financial impact: Would reduce personal income taxes by about $1.7 billion, and bank and corporation taxes by about $800 million. Potential for significant increase in insurance tax revenues, depending on legislative action. No effect on state costs or local government revenues and costs.


Mr. Charles W. Dailey, 430 W. Adams Park Drive, Covina, California 91722



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