California Proposition 167, Sales and Income Tax Increases (1992)

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California Proposition 167, or the Economic Recovery Tax Relief Act, was on the November 3, 1992 ballot in California as an initiated state statute, where it was defeated.

Proposition 167 would have increased the tax burden on California taxpayers by an estimated $340 million. It would have raised this additional revenue through a variety of changes to income taxes, sales tax, renters' tax credits, taxes on corporations and taxes on oil and gas.

Election results

Proposition 165
Defeatedd No6,136,89558.84%
Yes 4,293,460 41.16%

Ballot summary

Proposition 167's official ballot summary said:

  • Increases state tax rates for top personal income taxpayers.
  • Temporarily suspends indexing on top personal income tax brackets.
  • Increases income tax rates for corporations and premium tax rates on insurers.
  • Defines corporate income to include specified excess employee compensation.
  • Increases tax liability of banks and corporations doing business within and outside California.
  • Provides for reappraisal of most business-owned real property upon specified change in ownership interests.
  • Imposes new oil severance tax.
  • Changes tax rules related to oil and gas production.
  • Repeals 1991 sales tax increases.
  • Provides for renters' tax credits.

Fiscal estimate

The fiscal estimate provided by the California Legislative Analyst's Office said:

  • Increases state tax revenues by roughly $340 million in 1992-93, and $210 million annually through 1995-96. Additional annual revenue increases of roughly $1 billion beginning in 1996-97.
  • Replaces state expenditures on schools with increased local property tax revenue of $350 million to $700 million annually beginning in 1993-94.
  • Increases property tax revenue to local governments by $750 million to $1.4 billion annually, beginning in 1993-94. Reduces sales tax revenue to local governments by about $95 million in 1992-93 and $200 million annually thereafter.
  • The actual fiscal impact could differ significantly from these estimates, depending on how individuals and businesses respond to the measure's tax changes.

External links