Bradley Calls for State Tax Cuts, Changes in the System

Democratic gubernatorial candidate Tom Bradley, seeking to shore up credentials as a fiscal conservative, Thursday proposed that California’s tax system be changed to conform with federal tax reforms recently approved by Congress.

A California tax law modeled after federal law would bring an annual “windfall” $1 billion to $2 billion “that should be returned to the taxpayers,” Bradley said. At the same time, Bradley, speaking at a business leaders breakfast, proposed new state tax breaks--credits for companies that create new jobs and those that make or grow products here and export them. He also proposed reducing or eliminating the capital gains tax on investments made in California.

But the Los Angeles mayor was short on specifics on how the state would make up the revenues that the tax breaks would take away. Instead, he referred reporters to the federal tax reforms advocated by President Reagan. Bradley, usually no fan of Reagan, held a press conference about a year ago to attack Reagan-backed tax reforms that would have eliminated deductions for state and local taxes.

Asked how he would account to the treasury for the credits he is suggesting, Bradley said: “The tax reform package did call for a shift in many categories, but it is revenue-neutral; (those were) the President’s words, I’m taking them right out of his book.”

Details of the plan, and how it would work in California, would be developed by a committee that he would appoint if elected governor, Bradley said.

Sensitive About Charges

Bradley’s new tax proposal appeared to be a reaction to charges by rival Republican Gov. George Deukmejian that Bradley is a big spender. The Bradley campaign is thin-skinned about any public perception that big-city, liberal Bradley is loose with public money.

Ever since Deukmejian claimed nearly two weeks ago that Bradley had a “secret plan” to raise taxes if he is elected, Bradley strategists have used every opportunity to counter what Deukmejian called the “tax-hike Tom” image.

“Contrary to what my opponent is saying,” Bradley said Thursday, “this is a tax plan--but a reduction of taxes. That money must and should go back to taxpayers. If he wants to criticize that, let him go at it.”

Deukmejian did not, but Larry Thomas, his campaign’s political director, said: “Tom Bradley has never, never supported legislation or ballot measures that would cut taxes or rebate a penny of taxpayers’ money to the people. Why should we believe him now?”

Effects on State Studied

The state Department of Finance is currently studying the effects on California of the federal tax changes, said Jess Huff, director of the department. The department has estimated that the federal tax changes would translate into a windfall of about $900 million but it is premature to look at the effects if the California laws were changed, too, Huff said.

Bradley, however, said it was fair and appropriate to change the California tax laws to conform with the new laws passed by Congress and awaiting the President’s signature.

There was some haziness about just what such conformity would mean. Asked if his proposal meant that the state personal income tax rate, now a maximum of 11%, would have to rise to higher federal levels, Bradley said they “would be changed or reduced to conform with the federal system. There might be some exceptions to that. . . . Our ultimate goal is to be fair.”

But Huff said that talk of “conformance” in tax reform terms means “income tax rates are assumed to be untouched. When a state plan conforms with the federal plan you’re really only talking about deductions, credits, treatments of income and definitions of income.”

Prison Washing Machines

In a criticism of Deukmejian’s spending policies, Bradley in another speech questioned $10 million spent by the state for automated washing machines in state prisons. “If George Deukmejian can’t buy the right kind of washing machines, how can we expect him to build entire prisons at reasonable costs to house our growing inmate population?” Bradley asked during a speech to students at the University of California at Davis.

Bob Gore, assistant director of the Department of Corrections, said, “We are surprised and disappointed that the mayor was not better briefed. The new prison commercial laundries will put inmates to work serving public agencies and saving tax dollars, will save water by cutting use in half, will in some case replace 30-year-old facilities that would dismay a Maytag repairman and were approved by bipartisan votes of the Legislature and the prison industry board.”