Slashing red tape in California
Following up on recent posts about inefficient regulation, here are several specific examples to show how California could radically simplify its operations. This would slash state expenditures, hugely reduce compliance demands on small businesses, reduce barriers to hiring and business formation, yet have little or no impact on existing tax and revenue structure.
- No state-specific income tax rules. Conform state tax to federal, without exception. You simply pay 10 cents to Calif. for every dollar you pay to the IRS, minus any amount you paid to other states.
- No “use tax.” Place burden on the seller to charge and remit California sales tax for California buyers.
- All state and county interactions are online and paperless by default: taxes, licenses, etc.
- No smog check on vehicles under 10 years old. Gross polluters were all made before 1980 anyway.
- Eliminate state investment advisor registration. This is how most other states do it, because SEC already registers managers with over $30m AUM. This is a classic 95/5 Pareto optimization: by dollars, most fraud is concentrated in big scams like like Madoff and Allen Stanford; meanwhile, registration has not been shown to reduce fraud, and the law still applies whether registered or not.