Years of overtaxation and overregulation have given
California the second highest unemployment rate in the nation. Even so some of
our state lawmakers still believe that punishing success is a recipe for job
growth.
Efforts by Assemblywoman Nancy Skinner (D-Berkeley) and
other Democrat legislators to increase taxes on high income earners will
actually punish California job creators and worsen volatile state revenues.
According to the Tax Foundation, California already has the
third highest income tax rate and one of the most progressive tax structures in
the nation. The top one percent of California’s income earners have incomes of
$500,000 or more per year and pay up to 50% of all income tax revenues received
by the state each year, according to a report by the non-partisan Legislative
Analyst’s Office.
The battle cry to ‘tax the rich’ is really code for taxing
California’s job creators, including many small businesses that are struggling
to survive. Rather than help California’s budget, higher taxes will reduce
revenues and drive even more job creators out of our state or out of business.
The Tax Foundation also found that most small businesses pay
their business taxes using individual rates, and California’s taxes on small
businesses are among the most burdensome in the nation.
The California Taxpayers Association (CalTax) recently
announced that Franchise Tax Board numbers show the number of Californians
reporting million-dollar-plus adjusted gross incomes fell by 20.2% from 2008 to
2009. Reported income fell by 27.8% and the amount raised by the extra 1% tax
on millionaires (enacted by Proposition 63 of 2004) fell 31.3%.
According to Caltax, the falling numbers are the likely
result of a "combination of high-income Californians moving to states with
a more friendly tax climate…and the impact of the recession on personal
income."
CalTax also noted that a taxpayer making $2 million a year
can save nearly $200,000 a year simply by moving from California to Nevada.
To paraphrase Ronald Reagan, the Democrats’ view of the
economy could be summed up in a few short phrases: If it moves, tax it. If it
keeps moving, regulate it. And if it
stops moving, subsidize it.
Elected in November
2010, George Runner represents more than nine million Californians as a member
of the State Board of Equalization. For more information, visit www.boe.ca.gov/Runner.