THE GOVERNOR’S BUDGET PROPOSAL : Wilson Offers Sweeping Plan to Raise Funds : Taxes: Cost of candy, liquor, car licenses would be among the items increasing under the proposal. Few Californians would escape wide range of levies.

Californians will pay more for their cars, candy, booze, junk food, newspapers and magazines under the tax plan offered Thursday by Gov. Pete Wilson.

In a sweeping tax proposal that will hit virtually everyone in the state, Wilson called for raising $1.8 billion through a variety of higher taxes--including an increase in motor vehicle license fees and a hike in the alcoholic beverage tax.

For the first time, candy, snack foods, newspapers and periodicals all would be subject to the state sales tax. In addition, independent contractors’ income, employees’ bonus payments and income earned by estates and trusts would be subject to income tax withholding for the first time.

The new Republican governor emphasized that he was not proposing a “general” tax increase, such as an income tax or sales tax hike. But few Californians will escape the new levies proposed by Wilson to help compensate for an estimated $7 billion shortfall in state revenues.

“We felt we had to increase certain revenues to avoid Draconian cuts,” Wilson said. “I did not want to cut health programs. I think a tax on candy and newspapers and a tax on beer, wine and hard liquor is a great deal more equitable.”

The increase in vehicle license fees is the single largest component of Wilson’s tax plan, bringing in an estimated $781 million annually.

Under Wilson’s plan, increases in the annual fees will range from 5% to 20%, depending on the age of the car. This will be accomplished by leaving the 2% tax rate untouched--but raising the assessed value of each vehicle upon which the fee is levied. The license fees decline over an 11-year period.

For example, under the current system, a new $10,000 vehicle is assessed at 85% of its purchase price and a 2% tax is levied for a total payment of $170. Under Wilson’s plan, the same car would be assessed at its full value, raising the fee to $200, said state budget analyst Anthony Moss.

By the fifth year of ownership of the same car, the license fee is $80 under the current law. Under Wilson’s plan the fee would be $120. After 11 years, the fee would drop to the minimum, $30. Under current law the minimum is $10.

Despite persistent attempts to increase the state’s tax on alcoholic beverages, industry lobbyists have succeeded for decades in maintaining low tax rates for beer, wine and spirits.

Wilson’s proposal to increase the tax on alcoholic beverages is similar to Proposition 126, a compromise proposal offered by the alcoholic beverage industry but rejected by the voters in November. It also comes on the heels of a federal tax increase on beer, wine and spirits that took effect Jan. 1.

Under the governor’s plan, the tax on dry wine would jump from a penny a gallon to 20 cents a gallon. The beer tax would increase from four cents to 20 cents a gallon. And the tax on distilled spirits would rise from $2 a gallon to $3.30 a gallon. In all, the increases would bring in $190 million a year.

For beer, Wilson’s proposal would mean a tax hike of 1 1/2 cents for a single 12-ounce can, or 9 cents for a six-pack. The governor’s plan would mean a tax increase of about three-quarters of a cent for a five-ounce glass of wine.

Echoing legislative proposals that were rejected last year, Wilson’s plan also calls for imposing the sales tax on a variety of products that are now exempt, bringing the state an additional $384 million a year.

Newspapers, magazines, candy and a variety of snack foods would be subject to the sales tax, which ranges from 6% to 7%, depending on the county.

Among the foods that would be taxed are cookies, most crackers, potato chips, corn chips, pretzels, meat snacks, granola snacks, popcorn and some cakes and pies, said Connie Squires, a state budget analyst.

On top of his tax hike plan, Wilson also proposed cutting the renter’s credit by more than half, saving the state an estimated $210 million annually. The tax refund would be slashed from $120 to $70 for married couples and from $60 to $35 for single people.

Wilson hopes to generate a one-time savings of $412 million by imposing income tax withholding on contractors, bonuses and trusts. Although the state would eventually collect these taxes anyway, requiring withholding of the tax money will give the state the use of the money months earlier.