We Don’t Need Another Tax Proposal – We Need Jobs and Reforms!

John Kabateck
NFIB State Director in California

Last week, the National Federation of Independent Business/California, Howard Jarvis Taxpayers Association, and Small Business Action Committee joined together to officially launch “Californians for Reforms and Jobs, Not Taxes”, the campaign opposed to the Governor’s $50 billion tax increase initiative.

According to the independent California Legislative Analyst, the tax hike will:

  • Raise sales and income taxes by as much as $50 billion for up to seven years, mostly on the backs of small businesses, regardless of whether the economy improves;
  • Increase income taxes by up to 32%, applying retroactively to January 1, 2012; and
  • Increase sales taxes over the current rate by more than 3% to a statewide average tax rate of 8.4%, the highest in the nation.

It’s important to point out that most small business owners file their income taxes as individuals, not corporations. Moreover, a higher sales tax rate will only worsen small employers’ efforts to invest in their business supplies and needs thereby forcing them to pass on that cost, and will give consumers one less reason to patronize their corner bakery, auto shop or bookstore.

So, while the Governor would like for you to believe that this is a “Millionaire’s Tax”, it would be more appropriate for him to deem it a “Mom and Pop Tax” – because that’s precisely who it would clobber the most!

What is even more appalling is that the Governor wants to raise $50 billion in new taxes from already-struggling Californians without including one single reform or assurance as to how politicians and bureaucrats would spend these dollars. The Governor claims that this measure will help our schools, but that promise falls flat when you look at where the money is going – or, should I say, isn’t going. According to a recent independent study by Pepperdine University, up to 50% of the money we spend on education never gets to schools, let alone the classroom.

Given the fact that California is facing a $16 billion deficit and spending in our state has increased by $30 billion since 2008, how can anyone trust tax proponents that their hard-earned dollars will be spend responsibly or honestly?

For years, small business owners have been pleading with our state leaders for meaningful, sustainable reforms – tax reform, regulatory reform, pension reform (we’re now facing a $500 billion unfunded pension liability), and legal reform to stop frivolous “ADA shakedown” lawsuits.  But have politicians in Sacramento heard and responded to their constituents’ pleas?  No — in fact, there have been no serious inroads for change that would help close the deficit and get California moving again. The Governor and legislators remain beholden to special interests that continue to kill any meaningful reforms.

And, finally, we’ve all been down this dreary road before: the Governor contends that these taxes would extend for merely seven years, but when was the last time we witnessed truth in advertising when it came to new money our legislature and state bureaucrats could get their hands on?

Consider the facts:

  • There are more than 2 million unemployed in our state right now;
  • Small business confidence was stagnant in May with no signs of improving any time soon.
  • Businesses like Waste Connections, formerly in Folsom as the largest publicly traded company in Northern California, are leaving for Texas and other friendly states because of the high cost of doing business here and the massive amount of regulations that are heaped upon them.  The biggest casualties here: California jobs and the scores of small businesses coexisting in these communities.

In a nutshell, small business owners, their employees and customers are uncertain, scared and frankly fed up with a state government that repeatedly fails them, is out of touch and continues to look to Main Street as the trusted ATM.

Instead of allowing small businesses the ability to create jobs and invest in their communities, these taxes will force them to raise prices, cut employees, or close their doors and move out of state, something which is already happening.

It is time to stop the madness – we must stop rewarding our government leaders – who continue to spend our money recklessly and without accountability – with more money.

This November, small business owners, taxpayers and all Californians will have an opportunity to send a powerful message to Sacramento – that the Governor’s tax proposal is neither a reform nor a solution to help recover California jobs and the economy. It would only make a tragic situation on Main Street horribly, irreversibly worse.

We urge all small business owners, taxpayers and concerned Californians to join our efforts to tell Sacramento “Enough is Enough!” by joining our growing coalition – Californians For Reforms and Jobs, Not Taxes.  For more information visit: http://www.reformsandjobsnottaxes.com/.

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