California and the United States are in the midst of the worst foreclosure crisis since the Great Depression. This abundance of home foreclosures has had a profound effect on the economy by reducing job growth, bleeding billions of dollars in tax revenues and hitting consumer spending—pushing the country into a recession. Property values have dropped and foreclosures continue to mount as the housing market remains in the doldrums and unemployment remains above 12 percent in California.
Small businesses have played an important role in helping slow economies recover and prosper, as an engine of job creation. In fact, the U. S. Small Business Administration (SBA) reports that during the 1990s, small businesses created the majority of new jobs and now account for 65 percent of U.S. employment. It’s a serious matter that the credit crunch is squeezing these firms. Given the proper tools and incentives, small business entrepreneurs again will play an important role in revitalizing California’s economy.
- Supported proposal reducing complexity and waste in tax reporting and administration by conforming many California tax provisions to recent changes in federal tax law, including a conformity provision giving financial relief to troubled borrowers by excluding debt forgiven by a lender from a borrower’s taxable income (SB 401).
- Blocked new barriers to economic development, such as tax hikes on companies that invest in property and jobs (AB 1935, SBX6 18), targeted tax increases (AB 2100, SB 1210, ACA 22), and proposals creating uncertainty about the future availability of investment-encouraging tax credits (AB 2171, AB 2641, ACA 6, SB 1272, SB 1391, SBX6 20).