America Golden State of Taxes
California Gov. Jerry Brown wants to add $7 billion in new taxes. Businesses and taxpayers are already reeling.
D BY JAMIE RENO
espite its golden state moniker, California is look- ing more like a West Coast version of the Rust Belt.
Once heralded as the go-to state for
anyone seeking the proverbial “pot of gold,” California is reeling. People and businesses are leaving, entire indus- tries are threatening to disappear, the tax base is shrinking, unions are in the saddle-riding business, and munici- palities on the verge of insolvency find their public-employee pensions are fixed in legal superglue. Democratic Gov. Jerry Brown’s
solution may only exacerbate the problem. He is proposing a state- wide proposition for this November that if passed would raise $7 billion in new taxes on high-income earners as well as an across-the-board sales tax increase. Californians have reason to worry. The state faces a $13 billion shortfall over the next 18 months. Most ominous: Democrats control
both houses of the state legislature and they are unable to offer any real solutions — other than raising more taxes. Last year California voters chose Jerry Brown over GOP busi- nesswoman Meg Whitman. Voters also chose incumbent Democratic
12 NEWSMAX | FEBRUARY 2012
Congresswoman Barbara Boxer over Republican Carly Fiorina, the first female CEO of a Fortune 20 company. But since the election, neither
Brown nor Boxer has been able or will- ing to do what was necessary to keep businesses from voting with their feet. High taxes, burdensome environ-
mental regulations, and oppressive business-permitting practices have forced businesses out. A September 2011 survey of execu-
tives from Development Counselors International ranked California as having the worst business climate of any state based on operating costs, taxes, and deficits. California placed at the very bottom in the Pollina Corpo-
rate Top 10 Pro-Business States study, based on labor costs, taxes, litigation abuse, crime rates, demographics, and school dropout rates (20 percent). All of which leads to the question,
Can this once flourishing state recov- er? “I believe it is reversible,” Fiorina tells Newsmax, “but California leaders on both sides of the aisle must make growth and job creation as important a priority as deficit reduction, environ- mental protection, union protection, and other regulations.” Fiorina, a champion of free enter-
prise, private-sector job creation and fiscal conservatism who was recently named vice chairman of the Nation- al Republican Senatorial Committee
BROWN/SACRAMENTO BEE/MCCLATCHY-TRIBUNE/GETTY IMAGES
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