4/26/2013

California retroactively increases taxes all the way back to 2008

I can understand why these businessmen thought that their accounts had misread the tax law.  This is just too unbelievable.  What do you think that this will do to people's willingness to invest in California in the future?  From The Hill newspaper:
The state’s tax officials have announced that they are retroactively canceling a tax incentive for startup companies in the state, and now presenting those companies with tax bills that date back to 2008 – plus interest. 
If that sounds like a declaration of war on entrepreneurs in the Golden State, you wouldn’t be far off as far as Brian Overstreet is concerned. 
Overstreet is the tech entrepreneur widely credited with having broken the story on a holiday season decision by the California Franchise Tax Board (FTB) to retroactively rescind a tax program that had incentivized companies to stay and grow in the state. The FTB about face was driven by a court decision that said the tax incentive was inappropriately granted only to companies with 80% of their assets in California. . . .  
“If you followed the law, did nothing wrong, and created jobs in California, you received a legal reduction in the state tax on capital gains you paid when you sold your company.” Overstreet explained to me. “Now, five years later, you get a bill for new taxes plus interest for up to five years.” . . .

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3 Comments:

Blogger Many Falson said...

The top 1% own 43% of America's wealth, the next 19% own 50% of America's wealth and the other 80% own SEVEN PERCENT of America's wealth. I think you may have forgotten to mention that in your little article.
Didn't forget to mention it, because it has nothing to do with who pays how much Federal income 2013 tax brackets.
2) The earners in the top income brackets are already taxed. The top 40% of income earnerspay more than anyone else does in taxes. The top 20% pay 65.3% and the top 10% pay 50% and the top 1% pay.

4/27/2013 1:54 PM  
Blogger Rami Rustom said...

Imagine this:

Your wireless carrier adds a message to your wireless bill stating that starting next month they're going to retroactively increase their rate by $20 a month all the way back to the beginning of your contract and they justify it by saying that they miscalculated their costs and so their mistake must be passed on to their customers. If you were the customer, what would you do? Maybe you live in an area where only that carrier works, so maybe you can't switch carriers. But, you sure as hell would voice your opinion that this company sucks! Maybe you have lots of friends (fb and irl) and so you're able to spread your message to lots of people. Maybe you have a youtube channel with 100x more followers than friends so you're able to spread your message even more. That's a lot of people that would be weary of doing business with this company. Lots of dissatisfied customers like this could result in customers leaving to the competition in hoards, resulting in the company going bankrupt.

Since the carrier could easily foresee such a thing, what would its leaders do? They wouldn't do dishonest business practices like this. They would want to not have dissatisfied customers spreading their bad experiences throughout their potential customer base.

Why don't our state politicians think this way? Don't they realize that companies would rather do business in states that won't screw them?

-- Rami

4/27/2013 7:14 PM  
Blogger Martin G. Schalz said...

Article 1, Section 9, Clause 3. Expressly prohibits ex post facto laws.

Is California exempt from the Constitution? The Supremecy clause says no, but if Obama can get away with it, so can certain left leaning states?

4/29/2013 1:20 PM  

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