Provide Job-Creating Tax Cuts
With California facing a $20 billion deficit, we have to be strategic and effective in the tax relief we provide. While making cuts in marginal tax rates is a very important goal, at this moment we simply cannot afford a big, across-the-board tax cut that would irresponsibly grow the state’s already oversized debt level and drop our bond rating to junk status.
While it is true that marginal tax cuts do create greater revenue, economic history shows that there is a lag time before this new revenue comes in. With the fiscal crisis California faces today, the reality is that the state must first start seeing growing state revenue from an economic recovery before across-the-board tax cuts can be provided. Instead of promising immediate, across-the-board tax cuts now, Meg has a better, more realistic plan: spark job growth now by quickly enacting targeted tax cuts that are affordable and immediately impact key sectors of our economy to create new jobs. Once our economy begins to grow again and spending has been cut, Meg will provide broad-based income tax relief and take steps to simplify California’s tax system.
Eliminate the Small Business Start-Up Tax
Meg will eliminate the $800 fee that new business start-ups are currently required to pay in California. Entrepreneurs should not be penalized for launching a business venture. The LLC filing fee is nothing more than a tax on jobs. The state that put “start-up” into the national lexicon needs to repeal this tax.
Eliminate the Factory Tax
California is only one of three states that taxes manufacturing equipment without offering a tax credit or exemption. The factory tax is a major obstacle to keeping high-paying manufacturing jobs in California.
Increase the Research and Development Tax Credit
Meg will increase the R&D tax credit for California businesses from 15 percent to 20 percent, which conforms to the federal level. This is the same level of tax credit that many of the states we compete with offer today. This tax cut will promote investment in the technologies and industries of the future. California is the innovation capital of the world and our tax policies need to be aligned to support our major economic advantages.
Promote Investments for the Agriculture Industry
The agriculture industry is vital to California’s economy. Meg believes that by providing a tax credit to encourage investments in water-conservation technology, we can reduce our state’s consumption and benefit all Californians.
Eliminate the State Tax on Capital Gains
California is one of a few states in the country that doesn’t tax capital gains at a lower rate than traditional income. This is double taxation at its worst. California’s tax treatment of capital gains is a major impediment to capital formation and investment in new jobs. We should align California’s tax treatment of capital gains with other competing states.
"Excessive taxation starves our economy of innovation and entrepreneurship. We need to build the new California economy with the goal of making it easier to start a new business and create jobs in our state."
— Meg Whitman
DID YOU KNOW?>
AK, FL, NV, NH, SD,TN, TX, WA and WY Have No State Capital Gains Taxes
We invite you to share Meg's vision for A New California. Please feel free to pass along our original news from the campaign trail.
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