Democrats in Sacramento are still operating from the point of view that if government raises taxes, more revenue will ensue. If members of the majority party would simply check empirical evidence, they would see that California has gone past the point of peak revenue generation and not only will fail to generate increased revenue, but will in fact greatly hinder California’s economic recovery, causing more businesses to pull out of the state or to close their doors altogether.
Case in point: the “Amazon” tax (Assembly Bill 28x) recently passed as part of the partisan majority vote budget deal.
According to business and finance experts, due to Governor Brown’s signing of AB 28x, approved by Democrat legislators on a party-line vote, small web-based businesses’ revenue will drop by 20% to 30%. Why? As a direct result of the enactment of AB 28x, larger internet retailers, such as Amazon.com and Overstock.com, have already sent notices to over 20,000 California affiliates business terminating their contracts for advertising services.