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AB 1500 is Bad News for Business!
An Open Letter to California State Senators:

August 27, 2012

Dear Senator:

On behalf of the 52,000-plus California members of the National Taxpayers Union, I urge you to vote against the billion-dollar tax increase on your state’s already-battered business community, otherwise known as Assembly Bill 1500. By penalizing multistate businesses attempting to expand and create jobs in your state, AB 1500 could cause further damage to California’s fragile economy and drive up the state’s 10.8 percent unemployment rate. While proponents of the bill have championed its additional subsidies for students, those same students will face a greater degree of economic uncertainty upon graduation if this onerous $1.2 billion tax is imposed on Golden State’s job creators.

As the result of a complex and punitive tax code, California already faces unprecedented budget challenges and is struggling to convince its most successful citizens and businesses to stay put. According to the Tax Foundation, California has higher tax burdens than all but five states and a business climate that is worse than all but two states. The proposed $1.2 billion transfer from California businesses to the government’s coffers, combined with proposed tax hikes on November’s ballot and the prospect of substantial federal tax increases, will only make matters worse.

Like Washington, DC, California has consistently demonstrated that it has a spending problem, not a revenue problem. Even after adjusting for inflation, state government spending soared by 42 percent from 2000-2010. With cities across the state filing for or contemplating bankruptcy and pension payments crippling local governments, it’s clear that this culture of fiscal irresponsibility at all levels has to stop. Instead of penalizing businesses to subsidize tuition for students, perhaps the Legislature should take a look at right-sizing the compensation of California’s government workers, including university presidents.

Taxpayer advocates throughout California agree: it’s time for lawmakers to rein in wasteful spending, to stop voting for behemoth projects like the bullet train to nowhere, and to stop abusing the business community with expensive tax schemes. Right now, rejecting AB 1500 would be a step in the right direction.

        Lee Schalk
        State Government Affairs Manager

cc: Governor Jerry Brown