You would think that the last thing the California Legislature would want to do is add yet one more burdensome layer of taxes on small businesses – especially at a time when we ought to pass measures to stimulate the economy. But that’s not the mindset of the Democrat leaders in the Legislature.
Instead, the cornerstone of their current Budget Proposal is a 3 percent withholding tax on Independent Contractors.
This illogical proposal would slow economic recovery and growth in California, and has the potential to put more people out of work. As it is, the state is already approaching a 12% unemployment rate.
Furthermore, this measure could actually force small business owners to shut their doors, or at the very least stretch other small businesses to the limit, as they will be compelled to provide an up-front loan to the state even if they have no tax liability.
When are the Democrats going to learn that small business is the fuel that drives California’s economy?
July 1st, 2009 at 12:00 am
What a joke….Los Angeles County is estimated to have over 20% of workers who never report income.
Coupled with smuggling, criminal activity, drug multi-level marketing, prostitution, tip pocketing and redneck and tatoo warrior tax avoiders you reach an estimated 35% of enterprisers not paying any taxes.
Generally….some say Miami and La would collapse if the underground industries were truly taxed!!!
July 1st, 2009 at 12:00 am
The worst part of all this is the burdensome paperwork. Now, when a small business goes to pay its bills every month, it cannot simply write a check to its vendors. It has to determine which of those vendors is an independent contractor (that is a byzantine process in and of itself), withhold the funds, then wade through the paperwork to figure out which form to complete, filing deadlines, etc. The state already burdened businesses in this respect a couple of years ago when it made a requirement that, rather than sending 1099’s out once a year, you need to notify the state as soon as an independent contract is paid an aggregate of $600 during the year.