California’s economy is in the tank and our state budget is wildly misaligned. The only way to get the state budget back in shape is to grow the economy, to put our record number of unemployed back to work and to get businesses opening and expanding instead of shrinking and closing.
Unfortunately some in the state Capitol are pushing even higher taxes which are a poison pill for economic growth. One public employees union has a list of 31 new and higher taxes totaling $40 billion.
That’s why the National Federation of Independent Business (NFIB) has joined with taxpayer organizations, large employers and other small business organizations to create Californians Against Higher Taxes. This coalition aims to use every arrow in our quiver to fight off economically devastating tax increases.
Our best, and frankly only, hope for meaningfully tackling our state budget crisis and putting our state on the road to economic recovery is creating an environment in which small businesses will grow and create jobs. Some question an emphasis on small business, but history is our guide showing that small businesses traditionally create about 75 percent of all new jobs and almost 100 percent coming out of recessions like the one we now find ourselves experiencing.
Californians are certainly already doing their share by paying $12.5 billion in new taxes this year. Those taxes cut business budgets for hiring or retaining employees and they slice into citizens’ disposable income. That dramatically reduces the very private sector spending that could ignite and support a recovery.
Our state’s companies are also certainly doing their share. Business taxes are so high that California is ranked the 6th most expensive state in which to do business.
A new Milken Institute study has found that California’s high taxes were a primary reason the state lost manufacturing jobs. The industry sites an Employment Development Department report that found 436,900 manufacturing jobs were lost from 2001 through April of last year.
Putting people back to work expands the tax base and is the real solution to California’s budget woes. Tax increases undermine that goal.
NFIB/CA is a member of Californians Against Higher Taxes.