Hastings Constitutional Law Quarterly


What role do tax reform commissions play in California fiscal history? The recent California Commission on the 21st Century Economy-the Parsky Commission-temporarily raised hopes for substantive tax reform in California. However, its apparent failure raises broader questions about the role of tax commissions. Have they ever led to fundamental tax policy changes in the state and, if so, what made them successful?

To address these questions, this paper explores the experiences of two important California tax commissions, the 1906 and 1929 commissions, and places them into the history of taxation in California. Both the recommendations of the 1906 and 1929 Commissions were largely adopted but only after some modifications and, in the case of the 1929 Commission, considerable fiscal turmoil. Two of the most dramatic changes in California tax history, however, took place outside of formal tax commissions. The Riley-Stewart initiative, approved by the voters in 1933, set the stage for the modern California tax system while Proposition 13 fundamentally altered the fiscal constraints facing policymakers.

The paper then takes a close look at the recommendation and operation of the Parsky Commission, with particular focus on the difficulties associated with their new proposed business tax and the failure of the Parsky Commission to treat the issue of the distribution of the tax burden with sufficient care. It suggests that one positive, although unintended outcome for the Parsky Commission's report could be a consideration of broader business taxes for California as complements to the existing tax structure.