Given the way California’s Governor unveiled his jobs plan, it seems he’s taken a page from the playbook of the President of the United States, seeking to use the issue to score political points against Republicans rather than repeal laws which increase the cost of doing business in the Golden State. The “news conference,” the LA Times reports, “at times seemed more like a partisan rally than an attempt to reach across the aisle. Democrats used the governor’s announcement to rap Republicans’ knuckles for favoring out-of-state companies at the request of conservative activists who oppose changes in the corporate tax structure.”
The governor contends that California’s current “complex tax formula . . . allows a tax break for companies that move jobs out of state. He wants to eliminate that ‘outrageous and perverse’ incentive.” To fix that, the Democrat . . .
. . . wants to change the state’s tax code in a way that would reap more revenue from some companies that employ the bulk of their workers outside California, while creating new tax breaks for firms that hire in the state or buy business equipment here.
Problem is is that such changes might spur those companies which are based in California and employ workers in other states to join those companies that have already left the state. The intention may be to bring jobs back to California; the result would be for more firms to leave the state. This proposed change basically just imposes another burden on California employers. Firms would avoid that burden by leaving the state.
In short, Brown’s plan would only succeed in making the currently complex tax formula even more complex. He’d be wiser to simplify the formula and cut regulations.
His proposed “tax credits for companies of up to 50 employees” which hire new workers in the state would certainly decrease the cost of bringing on new employees, so it does represent a step, albeit a modest one, in the right direction, but it doesn’t address the real problem the complicated tax “formula” and the state’s burdensome regulations.
He may make it less expensive to bring on a new employee, but it would still remain costly to do business in the state.
Republicans who oppose this plan would be wise to put forward an alternative which both cuts taxes on business and reduces regulation.
This “plan” is in keeping with the “if you don’t like it leave” attitude of Kalyfornia state government. Unfortunately, it’s also become the attitude of the federal government as well. I guess there was no mention of eliminating duplicate/ineffective programs or reducing spending during all this negotiating?
I expect nothing less from Governor Moonbeam; he is a Democrat.
wants to change the state’s tax code in a way that would reap more revenue from some companies that employ the bulk of their workers outside California
So Moonbeam’s new dictum to the California business community is essentially this: put all your employees in California or you will be punished.
Simultaneously, we have Gavin Newsom’s new Bureaucratic Office of Helping Businesses Avoid Bureaucratic Offices commissioning all sorts of studies and flying around the countryside trying to figure out why businesses are leaving California left and right.
Obama Party members are idiots. That is the only explanation I can see for any of this.
the only thing brown wants to do is change the tax code to put more money in the hands of the politicans.
That can’t be because of socialist policies, since socialism is supposed to create prosperity. So, it logically follows that the problem must be in the way they are executing the socialist policies. The obvious solution is to enact more socialist policies, while in the meantime try to figure out what is wrong with the execution of their socialist policies.
They’re fricking brilliant.