Teachers union launches effort to repeal corporate tax breaks

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The California Teachers Assn. has contributed more than $630,000 over the last two weeks to repeal new tax breaks for corporations, which are scheduled to go into effect this summer.

The union has formed a new committee called Taxpayers for Jobs and Against Corporate Handouts, with the aim of qualifying a ballot measure for November that would maintain current law on how corporate taxes are calculated.

Under a budget agreement reached in February 2009, new laws for business taxation are to go into effect this summer. The changes would allow businesses to receive tax benefits for past losses, share tax credits among their subsidiaries and make changes in the way their sales taxes are calculated.

The changes could cost the state ‘up to $2.5 billion per year’ in lost tax revenue, according to the initiative.

This week, the state Assembly passed a plan that would prohibit the business loss legislation from going into effect. Gov. Arnold Schwarzenegger has defended the coming change in state law, calling it a much-needed break for businesses and an incentive for California companies to create new jobs.

--Anthony York in Sacramento