California needs an equitable income tax system

January 9, 2024

Statement by California Controller Malia Cohen

Cohen released the following statement following last month’s announcement that the L.A. Dodgers signed a 10-year, $700 million contract with pitcher Shohei Ohtani. The contract is structured so that Ohtani will receive $2 million per year and defer the balance approximately 10 years, when he could potentially return to Japan and escape payment of California state income taxes on the deferred amount:

The current tax system allows for unlimited deferrals for those fortunate enough to be in the highest tax brackets, creating a significant imbalance in the tax structure. The absence of reasonable caps on deferral for the wealthiest individuals exacerbates income inequality and hinders the fair distribution of taxes.

I would urge Congress to take immediate and decisive action to rectify this imbalance.”

Introducing limits on deductions and exemptions for high-income earners promotes social responsibility and contributes to a tax system that is just and beneficial for all. This action would not only create a more equitable tax system, but also generate additional revenue that can be directed towards addressing pressing important social issues and fostering economic stability.

As the chief fiscal officer of California, Controller Malia Cohen is responsible for accountability and disbursement of the state’s financial resources. The controller has independent auditing authority over government agencies that spend state funds. She is a member of numerous financing authorities, and fiscal and financial oversight entities including the Franchise Tax Board.