Steinberg has tax plan to end budget stalemate

July 30, 2010 6:51:44 PM PDT
State Senate President Pro Tem Darrell Steinberg is floating a new plan for ending California's 30-day-old budget stalemate.

He is suggesting increasing the state income tax, increasing vehicle licensing fees and lowering the state sales tax.

But most Republicans and taxpayer groups are saying the state already has one of the highest income taxes in the country and they are warning that increasing it will only hurt the state's economy.

State income taxes are deductible, so if you pay more in income tax you get a good percentage back in your federal tax return.