Skelton: Proposition 39 fixes lawmakers’ tax mistake

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This November, Californians have a chance to rectify a bad decision made by lawmakers in 2009, George Skelton writes in his Thursday column.

The lawmakers, along with then-Gov. Arnold Schwarzenegger, ‘included a tax incentive for out-of-state corporations not to build facilities or hire employees in California,’ Skelton writes. ‘You read right. It was nonsensical.’

Before that decision, corporate taxes were calculated based on three factors -- sales, payroll and property in the state. That helped out-of-state companies that had fewer operations in California.

Lawmakers tried to change the system so taxes would be calculated only based on sales, but they ran into fierce opposition. ‘The Legislature’s weak-kneed solution was to allow companies to choose whichever tax option best suited their bottom lines: the old formula or the new,’ Skelton writes.

The solution, Skelton says, is Proposition 39 on the November ballot, which would raise $1 billion a year by leveling the playing field between in-state and out-of-state companies.

‘Prop. 39 is what California’s initiative system is all about, empowering citizens to act when Sacramento refuses — assuming they can raise enough money,’ Skelton writes.

All of Skelton’s columns are here.

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