Overview
On January 10, 2011, just days after being sworn in to office, Governor Edmund G. Brown Jr. released his proposal to address the state’s $25.4 billion budget deficit, stating that, “For 10 years, we’ve had budget gimmicks and tricks that pushed us deep into debt. We must now return California to fiscal responsibility and get our state on the road to economic recovery and job growth.”
Budget/Taxation: 2012 Tax Front
Budget/Taxation: Proposition 26
Goals
- Monitor legislation and regulatory activity to ensure that California tax laws are fair and can be administered easily.
- Review state spending plans to make certain that economy and efficiency are the primary goals of government.
Major Victories
Stopping Hidden Taxes. Sponsored the 2010 winning campaign for Proposition 26, clearly defining fees and taxes at the state and local levels so that governments can’t pass real taxes with a simple majority vote.
Stopping Multiple Tax Proposals
- Blocking new barriers to economic development in 2011, such as a proposal requiring tax credits to sunset (SB 508); a “split roll” property tax (AB 448); and a multitude of hidden and specific tax hike proposals (AB 832, AB 1130, AB 1239, SB 237, SB 535, SB 653, SBX1 23); and 2010 proposals 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).
- Aggressive campaigning and advocacy by CalChamber-led coalitions in 2009 dampened enthusiasm for tax increases and new taxes, including targeted tax increases that would have exacerbated state budget problems and hurt the targeted industries; a “split roll” proposal to tax business properties at a higher rate; an energy tax that raises the price of gasoline and California-produced crude oil; and an onerous new requirement for business and government to withhold taxes on payments to independent contractors.
- Block legislation levying a climate change tax increase in 2009 (AB 231, AB 1405, SB 31)
Improving Tax Process
- Supported proposal in 2010, 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).
- Backed urgency legislation in 2009 improving taxpayer confidentiality (AB 192), reducing administrative delays in the reassessment process (SB 816) and simplifying sales tax compliance for non-profits (AB 1486).
Promoting E-Commerce
- Stalled proposals in 2009 harming California online marketplaces, web-service providers, and websites of small businesses and non-profits by changing California’s sales tax law in a way that will encourage out-of-state retailers to instead do business with out-of-state counterparts (AB 178, ABX3 27).
Position
The CalChamber supports sound tax policies that foster investment and respect the proper balance between the need to sustain necessary government programs and the need to maintain and grow a strong economy.
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