Written by Joel Fox, Editor and Co-Publisher of Fox and Hounds Daily
Businesses, particularly corporations, are the targets of tax raisers in the legislature, at city hall and on the ballot. Piling on business taxes in a state notorious for its poor attitude toward business, one wonders how long businesses will put up with it before leaving. As Jim Wunderman, the president and CEO of the Bay Area Council told the San Francisco Business Times, “Taxes equal Texas.”
The state legislature recently eliminated business tax credits, suspended the net operating loss deduction, and made other moves to find budget revenue with $9.2 billion from business. San Francisco and Oakland, as examples, are looking at proposals to restructure their business taxes with the goal to raise revenue from big businesses. Coming on the November ballot is the largest property tax increase in history aimed at corporations, although in reality all businesses will feel the effect. The property tax measure is backed by politicians such as the mayors of Los Angeles and San Francisco, as well as the largest public employee unions in the state.
How long will businesses put up with this treatment? Texas chamber of commerce officials say that every time California or municipalities talk about raising business taxes, phone call inquiries increase. Just over a month ago, business location expert Joseph Vranich wrote on this page, “For many years I’ve witnessed corporate leaders and business owners giving up on California because of its harsh regulatory, tax and political environments. Some of the language they used in private can’t be published here.”
Vranich reported that approximately over the last decade 17,000 businesses left California in full or in part diverting an estimated $99 billion in capital, “a conservative number,” he writes.
Read the rest of the column here.
Joe Vranich of Spectrum Location Solutions understands California’s perennially difficult business environment and his writings about the topic have been recognized by The Economist, Wall Street Journal, Investor’s Business Daily, Forbes and countless other media outlets.