Is it possible for California to drop lower than 50th in surveys testing state business friendly environments? It seems legislators and spending advocates have that goal in mind as they continue to call for higher and higher taxes on business even while Governor Brown offers up a record-setting budget.
With the stock market busting new records, the economy booming, unemployment low, businesses offering bonuses and pay raises to employees, and one of California’s star companies, Apple, promising to bring billions of revenue back to the country to create jobs, two California legislators decide that corporate businesses in the state should pay more taxes.
Assembly members Kevin McCarty and Phil Ting want to create a seven percent surcharge on employers with more than $1 million in annual income to raise up to $17 billion a year.
That is on top of spending advocates who have filed a split roll property tax initiative that would raise taxes on commercial property to the tune of $11 billion a year.
These calls for new taxes will weigh heavily as Amazon decides if its second headquarters should be located in Los Angeles.
Other tax on business proposals will be introduced. Last week on this page, I discussed city governments in the state who want to tax specific companies related to the oil business to raise money to fight climate change.
Tax increase advocates paint business in a dark light, as if business is getting away with something. In most cases, what business is doing is creating jobs and products that improve lives for Californians.
About the proposal to create the multi-billion dollar surcharge introduced in the legislature, Rob Lapsley, president of the California Business Roundtable, stated, “California employers already pay some of the highest tax rates in the nation. California currently ranks 48th out of 50 for our overall tax policy.”
While the governor and others are concerned that high income tax payers might leave the state when new federal tax laws prevent them from writing off some of their California taxes, high business taxes could create a similar phenomenon. The Roundtable’s Lapsley said, “An additional seven percent surcharge on California employers would force even more to move out of state or close their doors entirely, taking well-paying, middle class jobs with them.”
At a minimum, if all these taxes are imposed the cost of living in California will skyrocket and more Californians will be looking for greener pastures.
And California just may achieve a lower rating than seems possible in the business friendly state surveys.