Proposition 24 is an organized effort to repeal tax breaks agreed to by lawmakers as part of budget agreements in late 2008. These concessions were sought out by Governor Schwarzenegger
The agreements include 3 tax breaks for business that were aimed to relieve their tax burden in this challenged economy and keep California competitive with other states.
Proposition 24 would repeal the following
· The "single-sales factor". This allows multi-state corporations to choose whether they will be taxed on property, payroll or sales.[3]
Note: 24 states (including California) have moved towards this tax because it incentivizes companies to not expand into other states
· Loss carry-backs. This allows corporations that are experiencing losses in California's current economy to get refunds for taxes paid up to two years previously.
· Tax credit-sharing. This allows companies with more tax credits than they can use to distribute the tax credits to affiliates
Note: The intention was to ease burdens on struggling businesses. There are concerns the repeal of this law would be a burden on businesses that are already counting on lighter taxes.
Proponents of this Bill note that the 1.3 Billion in taxes gained could go towards teachers and schools. There is no provision in the legislation that these funds would go directly towards education. Additional funds would go to the general fund and could depending on budget negotiations go toward education.
Top 5 Donors for Prop 24:
California Teachers Association $6,449,893
America's Families First $2,150,000
National Education Association $2,125,000
Alliance for a Better California $161,414
California Federation of Teachers $107,666
Top 5 Donors against Prop 24
Viacom $1,600,000
Time Warner $1,500,000
Walt Disney $1,400,000
FOX Group $1,325,000
Genentech $1,100,500
2 comments:
Thanks Todd. This is an interesting one. While I'm generally for lower taxes the first one that companies can choose which they want to be taxed on payroll, property, or profits seems totally ludicrous to me! I think that it might have been a mistake to give companies such a generous tax break, but I also think it would be a mistake to repeal it now because this would obviously create more confusion in the marketplace which would cause economic instability.
My concern is that if we take away the tax breaks from the entities that create jobs, we will hurt the economy, and households, more.
I'm voting No.
Perhaps we can revisit this in the future, when the economy is better and jobs are on the rise.
Dave H.
Post a Comment