California: How about a retroactive tax grab, plus interest?

posted at 12:01 pm on March 20, 2013 by Erika Johnsen

In his State of the State address in January, Gov. Jerry Brown proudly proclaimed that, “Two years ago, they were writing our obituary. Well it didn’t happen. California is back, its budget is balanced, and we are on the move.”

…Which is interesting, because the January unemployment numbers just came in, and California is apparently competing with Rhode Island for the worst state unemployment rate in the country.

California’s jobless rate was unchanged at 9.8% in January for the second straight month, and that lack of improvement put the Golden State in a tie with Rhode Island for the worst unemployment in the U.S.

On the other end of the spectrum, North Dakota had the lowest jobless rate, 3.3%, the government said Monday in releasing updated and revised employment data for all 50 states.

California will release its county-by-county breakdown of jobs Friday, which economists expect will reflect the slow growth that is predicted in the state for 2013.

While some of California’s interior counties are really struggling, the wealthy coasts and the tech industry are helping to keep everything propped up — but it seems that the progressive state just can’t resist taking a little off the top wherever possible.

California’s top-end taxpayers — already steamed over a recent hike in the nation’s highest state income tax — are now fuming over a new $120 million retroactive tax grab on small business owners.

In December, the state’s tax authority determined that a tax break claimed over the past few years by 2,500 entrepreneurs and stockholders of California-based small businesses is no longer valid and sent out notices of payment.

“How would you feel if you made a decision, which was made four years ago, (and) you absolutely knew was legally correct and four years later a governing body came in and said, ‘no, it’s not correct, now you owe us a bunch more money. And we’re going to charge you interest on money you didn’t even know you owed’,” Brian Overstreet told Fox News from his office north of San Francisco. …

“Once the revenue is identified, those folks up in Sacramento will figure out how to spend it already,” warns former state Sen. George Runner. “And that’s what makes this so difficult. Even though it has this great bipartisan support as being wrong.” …

But don’t you dare imply that California is engendering an unfriendly business climate! California certainly has plenty of lifelines, and officials will point to various positive economic and employment trends as evidence that California is heading in the right direction — but other states are stepping it up on revising tax codes, reducing regulation, and attracting businesses, and the California blue-state model is hardly a recipe for long-term success.


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