Author: Jon Coupal

What Citizen Taxpayers Should Know about the Single Sales Factor Dispute

Last week, Governor Brown made a big splash pushing a business tax reform proposal. This issue involves how national and international corporations are taxed under California law. As the result of the budget deal crafted two years ago (a deal that hit citizen taxpayers hard) corporations were given a choice over how they were taxed. The details aren’t that important for normal people and the issue is a bit complicated. (There was a humorous moment when Darrell Steinberg said “this is simple” and, moments later, Jerry Brown said this is a “complicated issue” and he wasn’t even sure he understood it.)

Whether corporations should be given the opportunity to elect how they are taxed might very well be a legitimate discussion to have. (But Joel Fox makes the valid point that the absence of predictability due to these radical changes in tax policy every few months is a contributing factor to the perception that California is anti-business, if not outright weird).

What is clear is that the elimination of the right to elect would be a tax increase. Pure and simple. Moreover, any such proposal requires a two-thirds vote of each house. The good news is that compliance with Prop 13’s requirement on this issue appears to be a given – even among the Democrats.

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The People’s Initiative Power is in Danger

Democrats in the Legislature are pushing another power grab and, if they win, California voters lose.

Assembly Constitutional Amendment 6, introduced by Assembly Democrats Mike Gatto and Mike Feuer, would radically enhance the power of the Legislature and two unelected, unaccountable bureaucrats while severely limiting the People’s right to put initiatives on the ballot.

ACA 6 would prohibit any initiative from even being voted on if, in the opinion of either the Legislative Analyst or the Director of Finance, the measure did not “pay for itself.” No exceptions. And if the voters at a future date tried to repeal ACA 6 outright, these same two unelected bureaucrats could determine that such a measure itself ultimately would have a “cost” to government in excess of $5 million and, as such, could simply order that the measure not be placed on the ballot. Under 100-year-old constitutional law in California, only the courts have had the power to order something off the ballot.

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