SACRAMENTO, April 12 (UPI) -- Lawmakers in California are proposing to narrow the state's spending deficit through a tax-amnesty program targeting the booming underground economy.
The San Jose Mercury News reported Monday that the program, which would be California's first broad amnesty program in 20 years, could raise an estimated $500 million or more by generating tax revenues from unreported cash and barter transactions. The money would go toward closing the projected $12 billion gap between revenue and spending.
Tax-amnesty programs are not new. California reaped an estimated $154 million from its 1984-85 amnesty program. In the last three years, 20 states have pursued similar initiatives.
"If it's done right, an amnesty can be a useful tool for non-compliant taxpayers and a boon for government," Howard Jarvis Taxpayers Association President Jon Coupal said of the general idea.
The proposed amnesty would apply only to taxes owed through 2002 with a window for confession that would last two to three months, probably from January to March 2005.
