Another Small Business Killer

Katy Grimes: Today there is a hearing at the Capitol about Proposition 24 – the initiative seeks to stop several corporate tax breaks slated to go into effect in 2010 and 2012.

Ballotpedia reports that Proposition 24 would prevent corporations that are eligible for tax breaks voted by the legislature last year, totaling about $1.3 billion.

In another attempt to disavow a budget negotiation, the tax breaks targeted by the initiative were agreed upon by California lawmakers as part of budget agreements in late 2008.

Ballotpedia explains the specifics of the tax break would “let companies choose whether to have their income tax based on the proportion of their total sales occurring in California or on a combination of their sales and their operations…including payrolls and property.

California’s tax regulators estimate that about 120,000 businesses in the state would have higher taxes, if Proposition 24 is approved by voters.

This initiative is another attempt to tax small business to death. Allowing any tax break is a real stimulus to businesses, which could then reinvest back into the business through equipment purchases and hire more employees. Without the tax breaks, these 120,000 businesses will to continue to operate in a status quo mode – full of fear about the future, refusing to spend any more money than is absolutely necessary to survive.

CalWatchdog will report on the hearing later today.

SEPT. 29, 2010