Colman: BUSINESSES IN CALIFORNIA ARE UNDER ATTACK

Government mandates are raising the cost of energy and water for businesses.  High tax rates add to the cost of doing business in California.  Anti-housing policies cause the cost of living and leasing a facility to do business raising the costs.  The proposal to raise property taxes—the sky is the limit—via a split roll tax will force thousands of businesses to close or leave the State—and tens of thousands, if not hundreds of thousands of workers will also be affected.

 Examples of small businesses are barbershops, dry cleaners, dental offices, wine stores, and restaurants.  These small businesses are not as prominent as Facebook, Google, and Apple.  However, these large computer and data firms were once small businesses.

 According to the website Tax Notes (www.taxnotes.com), the 2020 ballot proposition ” . . . would amend the state constitution to allow commercial and industrial properties and vacant land . . . to be taxed based on their current assessed market values.”

 The proposition is called the “split-roll” initiative because property taxes on businesses would increase while residential property taxes would stay the same.

 Advocates of a split-roll tax are schools, hospitals, and libraries.  Supporting the split-roll tax are the League of Women Voters of California and the California Federation of Teachers.

It will not take the passage of this measure to kill the California economy.  Watch as folks start realizing the killer of the economy via the split role, watch small businesses close, storefronts become empty and the economy goes into a government induced DEPRESSION—just in California.  It is almost as if the Texas Chamber of Commerce is financing the split roll—since they will be the winner!

Photo courtesy taberandrew, flickr.

Photo courtesy taberandrew, flickr.

BUSINESSES IN CALIFORNIA ARE UNDER ATTACK

By Richard Colman, California Political News and Views,  3/25/19

 

 

Businesses in California face an attack.

 Dr. Richard Colman, Exclusive to the California Political News and Views,  3/25/19   www.capoliticalreview.com

A ballot proposition scheduled to appear on the state’s 2020 ballot will, if passed, increase taxes on businesses, large and small.

 The proposition is officially called the California Schools and Local Communities Funding Act.

 The ballot measure would affect small businesses, a significant part o California’s economy.

 According to the Small Business Administration, “99.8% of California businesses (3.8 million) are small businesses, 95.9% of California exporters are small businesses, 49.2% of California employees (6.8 million people) are employed by small businesses [and] 197,532 new net jobs are created by small businesses in one year in California.”

 Generally, a small business is defined as one with 50 or fewer employees.

 Examples of small businesses are barbershops, dry cleaners, dental offices, wine stores, and restaurants.  These small businesses are not as prominent as Facebook, Google, and Apple.  However, these large computer and data firms were once small businesses.

 According to the website Tax Notes (www.taxnotes.com), the 2020 ballot proposition ” . . . would amend the state constitution to allow commercial and industrial properties and vacant land . . . to be taxed based on their current assessed market values.”

 The proposition is called the “split-roll” initiative because property taxes on businesses would increase while residential property taxes would stay the same.

 Advocates of a split-roll tax are schools, hospitals, and libraries.  Supporting the split-roll tax are the League of Women Voters of California and the California Federation of Teachers.

 In 1978, California’s voters passed Proposition 13, which put a limit on property taxes and rolled them back to 1975 levels.  To raise property taxes, Proposition 13 required a two-thirds vote.  Prior to Proposition 13, property taxes would automatically increase if the assessed value of property increased.

 “The California Legislative Analyst’s Office,” according to Tax Notes, “projects that the split-roll proposal would generate roughly $6.5 billion to $10.5 billion in additional annual revenue.”

 Any extra revenue for California would come at a time when the state has a budget surplus of $20 billion.

 Under the split-roll plan, a business that was paying $20,000 a year in property taxes might end up paying $70,000 a year.  The tax level would depend on the assessed value of the business’s property.

 If property taxes on businesses go up, the enterprise might have to terminate employees, relocate, or close down.

 If unemployment went up, the state would collect fewer dollars in personal incomes taxes and in sales taxes.

 California, like the rest of the nation, is due to have an economic downturn.  For the last 10 years, the economy nation-wide has been expanding.  However, business expansions rarely exceed 10 years. 

 Sometimes downturns occur at five-year intervals.  If California experiences a recession, state revenue from employees and businesses will drop, and the state could go from a budget surplus to a budget deficit.

 At the current time, when California has a budget surplus, the state should be cutting, not raising, taxes.

About Stephen Frank

Stephen Frank is the publisher and editor of California Political News and Views. He speaks all over California and appears as a guest on several radio shows each week. He has also served as a guest host on radio talk shows. He is a fulltime political consultant.