Assembly Democrats Unveil Smaller Tax Package

SACRAMENTO (AP) - The state Assembly is debating a revised Democratic proposal that calls for $6.6 billion in tax increases on the wealthy and corporations.

Democrats on Sunday unveiled a tax plan that's smaller than the $8.2 billion package they initially proposed.

The new plan calls for a 1 percent income tax increase on jointfilers making more than $321,000, and a temporary suspension on the net operating loss deduction allowed for businesses. The plan also reinstates a higher corporate tax rate.

The package is currently being debated in the Assembly, which could take a vote for the first time since the state began its new fiscal year July 1 without a budget.

Democratic leaders say it's important to vote on the budget even though the plan is expected to fail. Republicans, whose votes are needed for a two-thirds vote, say they refuse to burden people with taxes while the economy remains weak.

(Copyright 2008 by The Associated Press. All Rights Reserved.)

AP-NY-08-17-08 1922EDT

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