Oct 25 2012
Proposition 39 Would Level Playing Field for California Corporations, Fuel State’s Green Economy
A ballot measure that has garnered little attention, but could potentially offset California’s carbon foot print and bring in millions of dollars into the state, is proposition 39. The proposition, backed by billionaire environmentalist, Tom Steyer, is a response to legislation signed by former governor, Arnold Schwarzenegger that gave out-of-state corporations an incentive for not creating facilities in California and not hiring California workers.
Under the current law which was established in 2009, corporations can choose from two different tax options. One option is a tax based on the amount of sales made in the state, which is standard practice around the country. The other option uses a company’s sales, number of employees and facilities present in the state to determine the amount of tax. Companies, given these two options always opt for the one that allows them to pay the least taxes. Rather than allowing companies to choose which tax structure is more beneficial to them, Prop 39 would evenly tax companies based solely on their in-state sales and is projected to raise $1 billion.
Of the billion dollars expected to be made in tax revenues, half will go into the general fund for things like education, and the other half into fueling the state’s green economy. If passed, the proposition is expected to provide $550 million in increased revenue towards clean energy jobs and energy efficiency in California.
Large corporations have made little noise in response to the proposition after Steyer created a full page ad with mug shots of the CEOs of General Motors, Kimberly-Clark, International Paper and Proctor & Gamble, calling them out as “tax-dodgers.” Steyer, a hedge fund manager, has endorsed the proposition with $22 million of his own money.
GUEST: California State Senator Kevin de León represents Los Angeles County’s 22nd Senatorial district which includes the Cities of Los Angeles, Alhambra, Maywood, San Marino, South Pasadena, Vernon and parts of unincorporated Los Angeles County. He’s also the co-chair of the Yes on 39 Campaign
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