But as the commission they formed for that purpose prepares to release its final report this week, business leaders are grumbling, labor unions have turned wary and once-bullish lawmakers are backing away. The recommendations from the Commission on the 21st Century Economy, which include such revolutionary ideas as scrapping the sales tax and imposing a broad and untested new business levy, have been met with shrugs and even a few snickers. 'It's not cooked,' said state Treasurer Bill Lockyer, who was a tax lawyer for decades. 'It probably needs years of work.' Republicans like some of what they see, such as the plan's call for a flatter income tax, but they don't expect to make much headway in a Capitol dominated by Democrats. 'This is the most significant tax policy proposal in three decades,' said Assemblyman Chuck Devore, an Irvine Republican. 'But the chances of this getting approved, as is, are zero percent.' Such conclusions have not completely derailed the prospects for change. Schwarzenegger is expected to call a special session of the Legislature to address the commission's findings. Assembly Speaker Karen Bass, an early proponent of the commission, has backed away from a vow to hold a yes-or-no vote on the package. But the Los Angeles Democrat calls the commission's principal suggestions 'intriguing.' Although that is not a warm embrace, she and other lawmakers see the package as a worthy starting point for debate on changes considered long overdue. They say the commission report should spark a full reappraisal of California's tax structure and possibly a push toward a bipartisan compromise that might actually take flight in the fickle political winds of Sacramento. 'The issue is not going to go away,' said Senate Speaker Pro Tem Darrell Steinberg, a Sacramento Democrat. 'But it's important to get it right.' The state's tax system was fashioned during the Depression, when small manufacturers churned out retail products subjected to a sales tax. As recently as 1950, the sales tax provided nearly 60 percent of the state's revenue. But in the years since, California's economy has shifted to one dominated by service industries -- lawyers, engineers and other professionals whose sales are not taxed. Although the state has the nation's highest sales tax, it now accounts for barely a quarter of revenue. The result has been an increasing dependence on income taxes, which grew from 11 percent of state revenue in 1950 to more than 53 percent in 2008. In recent years, the wealthiest 1 percent of the state's population has generated a big percentage of that. Liberals say the tax burden borne by the wealthy simply reflects the astronomical rise in incomes of the super-rich. But that revenue, too, has proven volatile, soaring or stumbling with the rise or fall of the economy and the stock market. As the economy slumped and tax proceeds plummeted late last year, Bass and Schwarzenegger got together to form the 14-person tax commission and sidestep the usual Capitol bickering. But the commission -- attempting to do in months the kind of wholesale reconstruction some states have taken years to accomplish -- slogged along. Partisan fissures cracked open, and the group's ideas fell well short of unanimous approval from participants. Still, Schwarzenegger believes the panel's proposed changes in the tax system are 'the most significant action we can take in ending our perpetual budget crises,' said Aaron McClear, the governor's spokesman. Under the plan, the state's current half-dozen income tax rates would be replaced by two -- 2.75 percent for those making up to $56,000 a year and 6.5 percent for those earning more. Sales and corporate taxes would be replaced by a single new business levy that would spread the burden -- at a tax rate of about 4 percent -- more broadly and would include service professions. The proposals have drawn heavy fire from all sides. Business leaders are worried it could make things worse for their bottom lines and the broader economy. 'There is simply too much at stake to adopt this proposal before the implications for jobs and the economy have been fully assessed,' said Allan Zaremberg, president and chief executive of the California Chamber of Commerce. Although some tax experts saying the changes would favor the rich and could cost jobs, labor leaders don't like what they see. 'This feels like a dangerous experiment,' said Courtni Pugh, executive director of SEIU California, the state's largest union with more than 700,000 workers. Among the most pointed critics are nine tax experts from academia. They rose up earlier this month to oppose the bid for a broad new business levy, saying in a Sept. 5 letter to Commission Chairman Gerald Parsky that there are 'numerous reasons to believe that this is the wrong course for the state to take at this stage.' They cited potential administrative difficulties, legal challenges and competitive disadvantages to California businesses compared to out-of-state firms not hit by the tax. 'The problem with this is it's a poorly designed substitute for a sales tax,' said Kirk Stark, a University of California, Los Angeles law professor and tax law expert who signed the letter. Lockyer and other Democrats, meanwhile, say the commission's mandate to ease the volatility of state revenue -- a boom-bust cycle that has sent the state spinning into deep deficits -- seems to have masked a hidden agenda. 'What they really wanted to do, in my opinion, was lower taxes on rich people,' Lockyer said. Republicans counter that their foes across the aisle had their own motivation -- to raise taxes. Still, lawmakers from both parties insist they will fully analyze the commission's proposals and come up with alternatives. (Begin optional trim) One strategy suggested by Democrats is to broaden the existing sales tax to include more service industries rather than impose a whole new business tax. They want to also look at tapping Internet commerce, hiking the gasoline tax to help fund the fight against global warming and adopting a levy on oil extracted from California, the only petroleum-producing state without one. Republicans probably will push for a bigger rainy-day fund to help the state better survive slumps. But they draw the line at any proposal to boost taxes overall. Nearly every GOP lawmaker has signed a no-new-taxes pledge. In addition to ideological opposition, attempts to increase taxes would face a gantlet of special interests with something to lose. (End optional trim) 'Any revision of the tax code is a Herculean undertaking,' Assembly GOP Leader Sam Blakeslee said. (Optional add end) But the commission's report -- along with the Legislature's abysmal legislative approval ratings and an election year sure to be dominated by the cry for California government to fix itself -- could still provide enough impetus for change. 'The bottom line is we've got a tax system designed back in the 1930s, when we were building widgets,' said Assemblyman Charles Calderon, chairman of the lower house tax committee. 'We need reform. We need a system for the information age.' 