California's progressive income tax structure, which taxes higher earners more, leads to revenue volatility as high earners derive income from capital gains and stocks, causing budget shortfalls during economic downturns.
Structural reforms are crucial to managing the state's finances effectively by balancing the budget and investing in essential services to maintain infrastructure and support the well-being of Californians.
#california-budget-shortfall #structural-reforms #income-tax-structure #revenue-volatility #state-finances
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