California businesses fuming over retroactive $120M tax grab

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break claimed over the past few years by 2,500 entrepreneurs and stockholders of California-based small businesses is no longer valid and sent out notices of payment.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. 

Last year, Overstreet and his fellow investors sold Sagient Research Systems and immediately reported the sale to the California Franchise Tax Board, the state's version of the IRS. "It was good for the shareholders, it was good for the employees and good for those of us who founded it," Overstreet said about the sale of the data mining company. "We paid the tax based on the law at the time."   

Via: Fox News

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Los Angeles’ Challenge in One Chart

Below we show employment growth in Los Angles and San Francisco since 1990.  Note LA County has added about 1 million residents over this period.  San Franscisco has about flatlined.

This trend is larger than the recent financial crisis. It’s larger than a business tax rate or industrial policy of a single city. Much larger.

*Note this graph doesn’t refer to the cities of San Francisco or Los Angeles but rather their Metropolitan Statistical Areas, a wonky term for their greater regions (here’s the mapfor LA) and the locus of economic data.  It’s important to remember that we’re talking about California government and it’d be far too logical to have the boundaries of local government cohere with areas of economic measurement.

Via: CA Political Review

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CA: Democrats Admit Truth: Prop. 30 First in Long Line of Tax Increases

OROVILLE — A seven-year window of opportunity, not a solution, is what Proposition 30 has provided the state of California, and no one should believe the state’s financial problems are solved, said state Controller John Chiang.

Speaking at the 13th annual North State Economic Forecast Conference Thursday in Oroville, Chiang called the tax hikes “a dab of Neosporin” on a wound.

One poor decision by the governor or Legislature, or an economic reverberation, and “the state could go back to fiscal distress.”

“But we’ve made progress,” he told the 400-plus who gathered at Gold Country Casino event center.

Voters approved the proposition in November that increased sales and income taxes to provide more than $6 billion in revenue.

After the voters approved tax increases from Proposition 30, “It’s incumbent on us not to waste the opportunity.”

He said the state is “still $700 million short of budget expectations, but that’s not bad.”

Chiang said his goals for the state are a balanced budget with financial surpluses, but it will take work by the governor, Legislature and Californians.

California is still struggling from the recession — which was different than other downturns, Chiang said — as well as bad spending habits and taking on debt.

In the past, the state has bounced back from a deep recession, but the excess debt the state and consumers face have made the comeback slow.

“We have to change our spending.”

Via: California Political News

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Polls, Tolls and Black Holes–Do Homeowning Taxpayers Have ANY Rights?

Maybe it was Providence, but I was one of those polled about extending the LAX northern runway into Westchester, and I am stunned and amazed at how partial that poll was.

Maybe it was Karma, but I was one of those originally excited about creating a new bond measure for fixing the City of LA’s roads, and I am stunned and amazed at how sudden and nebulous this measure is.  And maybe it Fate, but I was one of those who threw away that storm water runoff “junk mail” I got, and I am stunned and amazed at how myself and other homeowners will have the privilege of paying for the pollution of the rest of the county.

The LAX Poll

That was one of the most ridiculously-biased and inappropriate polls I’ve ever been part of, and I’m just grateful that I have the background, interest and education to have been able to counter the very-misleading questions posed by the phone interviewer, who (to her credit) was one of the sweetest and nicest phone pollsters I’ve ever spoken with.

So while I give kudos to the polling entity and pollster for her holiday sweetness, it’s not a stretch to guess that there’s a selection bias to those who took the time to answer the poll–because it’s also not a stretch to guess that there aren’t too many people who would bother to take an unexpected telephone poll during the holidays, and who have the interest in LAX and related transportation issues like I do (I’m that “Green Line to LAX” dude who keeps bothering everyone about planning, funding and building a Metrorail to LAX project).

Via: CA Political Review

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LA’s $300 Million Storm Water Tax

The Los Angeles County Flood Control District is proposing a $300 million parcel fee to help pay for its programs to curb pollution associated with urban runoff and to use storm water to recharge our groundwater supplies.

However, this so called “Clean Water, Clean Beaches Measure,” along with the permanent increase in the City’s sales tax to a job crippling 9.5% and the $4.5 billion Street Tax, is the third arrow in our back as the City, with help from the County, continues its assault on our wallets without engaging in real budget, pension, and work place reform.

In 2009, the City Council dumped its responsibility onto the County’s Flood Control District when it summarily flushed its $100 storm water parcel tax proposed by its Bureau of Sanitation. The $80 million in anticipated revenue would have been used to fund the early stages of its 20 year, $8 billion “Clean Storm Water/Urban Runoff Master Plan.”

However, while the environmental goals of the Storm Water Tax are noble, it does not deserve the support of the County’s 2.2 million parcel owners at this time.

For openers, the Flood Control District has not disclosed the total cost of this massive project, in large part because of the ever changing unfunded mandates dictated by the State and the well funded environmental lobby. Nor has it shared with the public an implementation plan.

For example, if the total cost of the County wide project were in the range of $30 billion, then the average annual cost would be in the range $1.5 billion a year.

Since City parcel owners would be responsible for about a third of the cost, we would be saddled with $500 million a year burden, a fivefold increase from the $100 million under the anticipated parcel tax.

Under the intricacies of the proposed plan, about a third of the total revenue would be under the influence or control of the City. And while all funds are required by law to be dedicated to local water quality improvement projects, the City will no doubt be able to divert funds to absorb General Fund obligations such as street cleaning.

Via: CA Political Review

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Morning Bell: Tax Hikes to Start the New Year

While you were sleeping—or ringing in 2013—the Senate voted to raise taxes.

After missing the midnight deadline, Congress and the President have technically sent the nation over the fiscal cliff, meaning higher tax rates are already in effect for all income tax brackets. But the Senate’s deal, brokered by Senate Republican Leader Mitch McConnell (KY) and Vice President Joe Biden, would target the tax increases on those making more than $250,000.

The Senate voted 89-8 to limit deductions for taxpayers making more than $250,000, which would raise their taxes, and to hike tax rates for those making more than $400,000.

As Heritage has pointed out, trying to tax the top income brackets to close the deficit is impossible. To overcome the massive federal deficit, top earners would have to be taxed at more than 100 percent. And J.D. Foster, Heritage’s Norman B. Ture Senior Fellow in the Economics of Fiscal Policy, reminds us that President Obama has already raised taxes on “the wealthy”:

Never mind that Obama already raised taxes on upper-income taxpayers through the 3.8 percent Medicare surtax imposed under Obamacare. Never mind that tax rate hikes would weaken an economy stumbling so badly the Federal Reserve doubled its risky efforts to keep the economy from recession. Never mind Obama’s approach would likely put the kibosh on any hopes for tax reform. Never mind the resulting revenues would be a small drop in a very big bucket compared to projected budget deficits. Never mind that the only justification for higher taxes is spite and envy to be exercised through the extortive power of the federal government.

Some of the key points in the Senate deal, which could go to the House as early as today:

Raises taxes on incomes over $400,000 for individuals and $450,000 for households
Raises taxes on investment income for those taxpayers as well
Limits tax deductions for incomes over $250,000—raising their taxes, too
Increases the death tax rate for estates over $5 million
Extends long-term unemployment benefits for one year
Postpones sequestration’s automatic spending cuts (including those to defense) by two months
Meanwhile, the United States also ran up against the debt ceiling yesterday. Treasury Secretary Tim Geithner said the Treasury would do some short-term creative accounting to make sure the country doesn’t default on its loans, which will buy two months before lawmakers have to fight it out again over increasing the debt limit.

The deal does nothing to address the reasons that the U.S. budget is out of control. Its focus on tax hikes rather than spending cuts is completely the opposite of what the country needs. As Heritage’s Romina Boccia explains:

Federal spending on entitlements and interest on the debt drives the federal budget crisis. Together the three major entitlements of Social Security, Medicare, and Medicaid (including Obamacare), as well as net interest, make up more than half of all spending in the federal budget today. Their share of the budget will grow to over two-thirds of all spending in 10 years. By 2025, the major entitlement programs and net interest together will eat up all tax revenues collected in that year.

Hiking taxes simply isn’t a solution. Until Congress and the President pursue serious spending cuts, the country and the budget will keep chugging in the same direction. And that’s certainly no cause for celebration.

New year to bring 876 new laws to California

Homeowners behind on their mortgage payments and negotiating with their banks to find a way to work things out won't have to worry about getting a surprise foreclosure notice.

Women will have expanded access to birth control, as registered nurses will be able to dispense contraceptives such as the pill.

Apartment dwellers concerned about the possibility of carbon monoxide poisoning will be able to breathe easier.

Employers will not be allowed to require workers or job applicants to divulge their social media accounts or provide passwords to them.

Those are among the legal changes in California that will kick in Tuesday as a result of some of the 876 laws signed by Gov. Jerry Brown in 2012. By historic standards it was a somewhat low number but was the most new laws put on the books in the state since 2006.

The following is a list of some new laws. More information on them is available by searching the bill number under "Bill information" at http://www.leginfo.ca.gov.

- Bankruptcy protection: AB 929 permits debtors to keep items such as tools of their trade and an automobile so that they will be better positioned to engage in work or seek employment after going through a bankruptcy.

- Bear hunting: SB 1221 bars hunters from using trained dogs to track bears, chase them into trees and bay to summon hunters to shoot the bears.

- Birth control: AB 2348 authorizes registered nurses to dispense hormonal contraceptives such as the pill, patch and ring. Women will not have to see a doctor but will have to undergo a routine health assessment.

- Boat registration fee: AB 2443 requires owners of boats used in freshwater bodies to pay an additional registration fee of up to $10 — the precise amount is not yet set — to pay for inspection and infestation control programs to prevent the spread of invasive mussels in state waterways.

- Carbon monoxide: The final phase of a 2010 law, SB 183, starts Tuesday when owners of apartment complexes will have to have installed carbon monoxide detectors in every dwelling unit with a fossil-fuel-burning furnace or appliance, fireplace or attached garage.

Via: VC Star

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CA: Unlicensed to Kill: Study Confirms Unlicensed Drivers Threat to Public Safety

VOICES -  We’ve been warning for a long time that suspended or revoked and unlicensed drivers were a public safety menace. That’s why we opposed the LAPD directive not to impound for 30 days vehicles of unlicensed drivers. The politics-above-public-safety policy puts innocent people at risk of being injured and killed on Los Angeles streets.

City officials choose not to believe the very police officers who investigate vehicle crashes in Los Angeles and instituted a policy that ignores state law. Perhaps they now will listen to the DMV. 

C

The LAPPL welcomes new study by the California Department of Motor Vehicles, “Fatal Crash Rates for Suspended/Revoked and Unlicensed Drivers,” which found suspended or revoked and unlicensed drivers are much more reckless on the road than validly licensed drivers. The study found that unlicensed drivers are nearly three times more likely to cause a fatal crash than licensed drivers. The study also found that unlicensed drivers are more hazardous than drivers with suspended or revoked licenses. Some of the key findings of the DMV study are:

● Compared to validly licensed drivers, suspended, revoked and unlicensed drivers are 2.60 and 2.73 times more likely to cause a fatal crash relative to their exposure.

         

● The largest percentage of suspended, revoked and unlicensed drivers involved in fatal, two-vehicle crashes is those aged 20 to 29.

         

● For drivers aged 19 or younger in fatal, two-vehicle crashes, the percentage that consisted of unlicensed drivers was almost four times higher than the percentage that was suspended or revoked.

        

●The actual number of unlicensed drivers in California is unknown because these drivers are unknown to the DMV until they are involved in a crash or convicted of a traffic violation.

There are two fundamental reasons why vehicle impounding of unlicensed drivers is smart law enforcement. First, an unlicensed driver willing to ignore the law is, at least temporarily, less likely to further violate this law because he or she will not have access to the impounded vehicle. Second, the cost and inconvenience of recovering an impounded vehicle discourages people without licenses from driving. That is precisely why the state legislature enacted the 30-day hold law.

Via: LA CIty Watch

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