As reported by the Los Angeles Times, a new study provides even more bad news for California’s job creation prospects and overall budget picture. According to Economic Modeling Specialists, Inc., California has fallen from first in the nation for new business formations to a dismal rank of 50th.

According to the report’s authors:

California’s economic woes and instability have been well-documented, and this data makes another case for how bad things have gotten there. California had the most net new business establishments in 2009 (more than 12,500) and 2008 (32,000-plus); in fact, it ranked either first or second from 2001 to 2009. But the Golden State sank all the way to 50th in 2010 with more than 4,600 fewer new establishments than the previous year.

Could it be that California’s business climate has become so hostile that entrepreneurs now feel they mustleave the state in order to successfully launch a new business endeavor? This news should be a wake-up call to Governor Brown and the Legislature.… Read More

California taxpayers are celebrating a rare victory. Despite Democrat efforts to extend them, the sweeping “temporary” tax increases of 2009 have gone away. This is an uncommon treat, as many prior tax hikes sold as “temporary” are still with us today.

As Californians enjoy the benefits of this victory, today marks the 20th anniversary of a prior sales tax increase that is still with us. On July 15, 1991 Californians were impaled with a “temporary” sales tax increase of 1.25%. This measure was enacted by the Legislature to address the state budget shortfall during the early 1990s economic downturn.

Fast forward to June of this year. A 2009 sales tax rate increase of 1% was set to expire on July 1, 2011. Despite a vote of the people against extending this and other temporary tax increases, Governor Jerry Brown and Democrat legislators unsuccessfully sought a five year extension of these taxes.

These higher taxes amounted to billions of dollars per year out of the pockets of struggling Californians and into the hands of wasteful government. Combine the 2009 temporary sales tax increase with the 1991 temporary sales tax increase, and… Read More

Democrat lawmakers are protesting a proposed referendum on California’s new “Amazon Tax” law. But keep in mind that this issue isn’t about Amazon. It’s about the thousands of California jobs the “Amazon Tax” places in jeopardy.

The lawmakers who authored the ‘Amazon Tax’ should be ashamed to appear in public. Their law has failed to achieve their goals. Instead it is punishing thousands of California small business affiliates who are losing income and may even be forced to leave the state.

The Legislature should admit its mistake and repeal the Amazon Tax. But short of that, the fastest way to save California jobs is through a referendum rather than years of costly litigation. Let the people engage in the debate and decide the issue for themselves.… Read More

Even as Governor Jerry Brown lifted his pen today to sign the so-called “Amazon Tax” into law, thousands of affiliates across California were losing their jobs.

Major out-of-state retailers like Amazon.com and Overstock.com are terminating their California affiliate advertising programs in response to this legislation. I’ve been warning for months that this would happen, but apparently these warnings fell on deaf ears.

The so-called ‘Amazon tax’ is truly a lose-lose proposition for California. Not only won’t we see the promised revenues, we’ll actually lose income tax revenue as affiliates move to other states.… Read More

Governor Jerry Brown and legislative leaders are hoping that a surge in new revenues will help them avoid triggering additional budget cuts.

But it’s hard to imagine their budget numbers working when California is racing to become the nation’s unemployment leader.

We need jobs to spur revenues, but burdensome taxes, fees and regulations continue to hold back California’s economic recovery. The Governor and Legislature need to wake up to the reality that their economic policies are destroying California’s competitiveness.

If the Governor and Legislature want to see growth in revenues, they need to get Californians back to work. We need to bring private sector jobs back to California instead of driving them away.… Read More

Today I called upon Governor Jerry Brown to veto the so-called “Amazon Tax” recently approved as a budget trailer bill by the Legislature. You can read my letter below or here.

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June 17, 2011

Dear Governor Brown:

I am writing to request your veto of Assembly Bill 28X (Blumenfield), the so-called “Amazon Tax.”

As an elected member of the State Board of Equalization, the agency responsible for use tax collection, I am concerned that in its hunger for revenues the California Legislature is traveling down a legally suspect and dangerous path. Rather than educate California taxpayers on their use tax obligations when making purchases from out-of-state sellers, the Legislature is stretching the definition of nexus to the point of absurdity and to the detriment of California’s economy and jobs.

Proponents of AB 28X claim it will “create fairness” by “leveling the playing field” between brick and mortar retailers and online sellers and generate $200 million in new revenues for the state. But in reality the measure… Read More

Today I called upon the Governor and Legislature to enact a six month interest and penalty holiday to help struggling small business owners and other taxpayers who have fallen behind on tax payments during the recent economic downturn.

The state’s job is to collect taxes, not penalties and interest. Too often heavy penalties and punitive interest charges actually make it more difficult for struggling taxpayers to catch up on late payments. If we want more jobs, we need to help California’s job creators get back on their feet.

Instead of increasing taxes or cutting vital programs, we ought to learn from the experience of other states where these programs have successfully raised millions of dollars. I believe a California program would generate several billion dollars of revenues for state and local government.

A tax interest and penalty holiday would be a win-win for both California’s job creators and state coffers.

Below is the text of my letter.You can find mypress release here.

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June 10,… Read More

Things are not so good out there. The unemployment rate, already stubbornly high, climbed even higher in May. Economists are revising economic growth predictions downward. Housing prices continue to drop, thereby further reducing household wealth. Real returns on bank deposits and Treasury Bills are negative. The dollar is dropping. Gas prices are up, inflation is up. There are some bright spots, certainly, but the overall picture is that of stagnation. Unfortunately, none of this is a great surprise given what the government has been doing of late. We are printing money and artificially holding down interest rates to try and spur recovery. But, this is creating those negative real (after inflation) interest rates, which are distorting capital flows. Most of the country’s tax policies expire in 18 months, so no one can do any long-term investment planning about taxes with any certainty. The government is retarding the development of almost all forms of economical energy (oil, gas, coal, nuclear), while subsidizing expensive wind and solar. We continue to run record deficits, which divert capital from other more productive uses and create the massive public debt overhang… Read More