January 05, 2010

In California, it’s almost a given. When revenues decline, Sacramento politicians raise taxes to make up the difference.

This has to end, Meg Whitman says.

Too many Californians are out of work or barely hanging on to their jobs, and employers need assurances that their tax bills won’t keep going up if they are ever to start hiring again.

The corporate tax in California is the highest in the West. California’s state and local tax burden is the sixth highest in the nation, according to the Tax Foundation. That bill is, on average, $5,028 per person.

Did you know that’s about what a family of four spends on average on groceries in a year?

Just when struggling California families thought their wallets couldn’t be tapped anymore, California lawmakers last year heaped on billions of dollars more in taxes — despite an economic climate so poor that some two million Californians can’t find work.
 
“For Californians who still have jobs, taxes and fees are eating into their lives,” Meg said.
 
Meg believes California needs a new kind of leadership, one that will find common-sense solutions to our challenges instead of raising taxes when revenues decline. “The economy and state revenues improve when businesses grow,” she said.
 
Consider this fact: Last year’s Tax Freedom Day was April 20 in California, meaning, on average taxpayers in our state had to work until that date to earn enough to pay their total tax bill. Because of California’s high state and local taxes, only three other states had Tax Freedom Days that fell later.
 
So it should come as no surprise that California’s business climate has been deemed unwelcoming.  It ranks 48th out of 50, according to the Tax Foundation’s State Business Tax Climate Index.
 
The deep recession, coupled with high taxes, has taken its toll. In 2008, California saw 45 percent more business closures than openings, according to the U.S. Census Bureau. By comparison, Texas had nearly 35 percent more new business starts than closures.
 
Marshall Merrifield deals daily with the challenges of doing business in California. He’s the CEO of Clark Security Products and General Lock, a San Diego company that sells locking hardware to locksmiths nationally.
 
The 57-year-old business has 350 employees and 14 distribution centers across the country. But California taxes are suffocating the company, and he is being courted by other states to relocate, Merrifield said.
 
Citing Meg’s experience as eBay CEO for 10 years, Merrifield said, “She knows how to create jobs, she knows what types of changes need to happen to create the kind of environment California can be again, that it once was.”

To learn more about Meg’s positions on the issues, please visit our policy page.