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Tax Proposal Will Make California the Most Expensive State
Submitted on:
07.17.2008
In the midst of one of the worst real estate recessions in the country, California politicians want to raise taxes for top marginal income people and for businesses that are making money. The plan proposes an increase of 12 percent from 10.3 percent for middle-income Californians, which is twice the national average. For corporate income tax the rate will rise 9.3 percent from 8.4 percent. This can greatly affect the biomedical industry in California because the industry's companies' revenues for 2006 topped an estimated $72.8 billion.
Tax increases in the past have caused AAA Auto Club, one of the largest California employers, to cut 900 jobs. High tax and regulatory costs in California have caused many companies to do business in more affordable states. Last week Toyota announced it will cancel plans to build its new hybrid vehicle in the San Francisco Bay area and will move its business to Mississippi. According to the U.S. Census Bureau from 1996 to 2005, 1.3 million more Americans left California than came in. The data also shows the people who are leaving have disproportionately higher incomes than those staying. This tax proposal and the real estate market collapse can cause vital industries to look to do business elsewhere.
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