Thursday, November 01, 2012

I have a Proposition for you...

Prop 39

Imagine for a moment that you work for several employers in several states.  You don't actually work in California physically, but you do have operations in the state and generate income from within California.

Now imagine that you can pay a lowered California income tax rate by choosing between the more favorable of two formulas for calculating your tax liability.  In reality, the only fair way to be taxed is for California to tax you based on the amount of, or percentage of income you earned in California itself.

That's what Proposition 39 wants to do to businesses that are currently located outside the state.  By locating their offices and personnel outside the state's borders they can pay a lowered rate of income tax.  This proposition will not have any effect on any business that has a physical presence in the state already.

New Jersey and Texas are among other states who have passed similar laws with positive impacts.  It encourages businesses to go ahead and locate within their borders by removing any incentive not to do so.

Among those who oppose this measure are General Motors, Chrysler and Kimberley-Clark.  Big corporations who benefit from this tax break.  In a society where GE files a 57,000 page corporate income tax return and not only pays no taxes, but gets $5 billion in tax credits, this measure makes perfect sense.  Level the playing field for corporations that do business in the state.

I'm voting YES on Proposition 39.  All I can ask is that you learn as much as you can about this bill and vote your conscience.