Burton Urges Income Tax Increase

State Senate leader John L. Burton on Thursday proposed a $2.5-billion annual income tax increase on the wealthiest Californians as a way to help fill the projected $12-billion budget shortfall.

The liberal Democrat from San Francisco called for restoring the highest individual tax brackets to 10% and 11% from 9.3%, the rate since Republican Pete Wilson was governor.

Even with Democrats controlling the Assembly and Senate, the proposal faces an uphill fight in this election year. Burton acknowledged its long odds.

But he said the wealthiest Californians received a “pretty nice” income tax break last year from President Bush and Congress. They would suffer no hardship by sharing it to prevent potentially deep cuts in programs for the elderly, disabled and needy, he said.

“They can still go out and buy a BMW, if they want,” Burton, president pro tem of the Senate, said of the wealthy.

He insisted that raising the rates would not be a tax increase. Instead, he called the proposal “revenue restoration.”

The plan was shrugged off by an aide to Gov. Gray Davis and the leader of Senate Republicans.

Davis spokesman Steve Maviglio said the governor will put his “focus on cutting back [the budget] rather than increasing taxes.”

“John Burton wants to raise taxes and the sun came up this morning. So, all is normal in the world,” said Sen. Jim Brulte (R-Rancho Cucamonga), Senate Republican leader. “I don’t think there are any Republican votes to raise income taxes.”

But Herb Wesson (D-Culver City), who is scheduled to become the new speaker of the Assembly, gave it a slightly warmer reception, saying it will get serious discussion in the lower house. “Nothing is off the table,” Wesson said.

Burton, the second most powerful man in the Capitol after Davis, conceded at a news conference that he was unsure whether he could push the proposal through the Senate, let alone the more conservative Assembly, where election jitters have already begun.

But he defended the notion of raising income taxes of the wealthy to spare severe cuts in social programs for poor Californians.

Under the Burton program, single people with annual taxable incomes after deductions of $130,000 to $260,000 would be raised into a new 10% bracket. Those whose income exceeds $260,000 would be in the 11% bracket.

Married couples filing a joint return would be pushed into the 10% bracket if their taxable income was $260,000 to $520,000. Those whose taxable incomes exceeded $520,000 would be in the 11% bracket.

Burton said the higher tax would produce $2.5 billion a year. It would remain in effect until the state budget regained a 3% reserve or surplus. Then, it would return to 9.3%, Burton said.

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Times staff writer Julie Tamaki contributed to this report.