Analyzing PPIC Poll on Taxing Business

Joel Fox
Editor and Co-Publisher of Fox and Hounds Daily

A superficial read of the latest PPIC poll might encourage the Brown Administration to change course away from across the board tax extensions to taxing businesses. But, such a move would be a mistake.

All ready, the Brown administration is informing business leaders that if the tax extension plan included in the governor’s budget doesn’t move forward, Plan B could be to tax individual industries. Not surprisingly, the poll shows voters would rather tax corporations than tax themselves. PPIC reports that 55% of likely voters favor raising state taxes paid by corporations. Meanwhile likely voters turned thumbs down on the idea of raising personal income taxes (70% No), state sales taxes (64%), and vehicle license fees (62%).

However, PPIC pollsters did not follow up with any questions to test the idea of taxing corporations. Since businesses provide jobs, and increased taxes mean less revenue businesses would have to hire employees, and jobs are important to the electorate (31% of likely voters said it was the most important issue the state faces), clearly reminding the voters of the connection between higher taxes and fewer jobs would effect election results.

Raising taxes to solve the budget problem is precarious at best. Asked if they would support tax increases as proposed by Brown in a special election, respondents approved the idea 53% to 41%. However, barely getting over the magic 50% mark this early before an election campaign is not a good sign for supporters. Furthermore, the poll found that balancing the budget with a mix of taxes and cuts barely out polled an all-cuts solution with likely voters, 45% to 41%.

A campaign can turn numbers around, of course. The administration is counting on massive financial support from public unions, particularly the California Teachers Association, for the tax extension ballot measures. Protecting K-12 education showed well in the poll with 75% opposing cuts to K-12, and 71% of all adults (as opposed to likely voters) saying they are willing to pay higher taxes than see education cut.

But, when respondents were asked what was the single most important issue facing California, jobs and the economy doubled-up the concern over schools, 31% to 15%.
The jobs issue would play a big role in any attempt to tax business even if the tax revenue is dedicated to schools.

Expecting voters to rally around a corporate tax is doubtful since the voters just had an opportunity to do that and they said No. Proposition 24 on the November ballot would have removed recently passed tax breaks for business. The CTA heavily campaigned for Proposition 24, donating over $8 million to help it pass, claiming the schools would reap billions in benefits. The measure lost 58% to 42%.

Jobs and the economy are still important to the voters and would be a determining factor should an attempt be made to tax corporations or any businesses.

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