It was called "the most boring proposition on the 2012 ballot"
by a San Diego blogger. The writer has a point. It revolves
around a corporate tax formula known as the "single sales
factor."
But when you consider that corporate taxes accounted for
nearly $10 billion dollars in California last year, Prop. 39
doesn't sound so boring anymore, "In closing this loophole
for out-of-state corporations, we get back to something which is
fairer."
Hedge fund manager Tom Steyer is leading the charge for Prop
39. Here's what he calls unfair: Right now multi-state
businesses can choose how to figure their California tax
liability. They can use a formula based on their sales,
payroll and property in the state, or a formula based solely on
their sales in the state - known as the single sales
factor.
Steyer says this hurts job creation, "We want to take
away the incentive for companies to fire Californians and move
their facilities out of state while selling into the largest market
in the United States."
Under Prop 39, all companies would have to use the single sales
factor. The state's non-partisan legislative analyst says
that would bring in about a billion dollars a year for the general
fund and for energy efficiency projects.
But Dorothy Rothrock with the California Manufacturers and
Technology Association says that billion dollars would come with
consequences. She says multi-state companies might cut jobs
or raise prices if Prop 39 passes, "Companies that would
be hurt by single sales factor in California include many
manufacturers who have payroll and property here, but they just
have so much sales in the state because we're so huge, that taxing
them on the basis of their sales makes their taxes go sky
high."
A mostly democratic group of lawmakers pushed legislation this year
that was similar to Prop 39, but the measure failed.
