This is the fourth part of a series of posts giving recommendations on California’s propositions. This post recommends a “no” vote on Proposition 24, which repeals three corporate tax breaks.
Proposition 25 will be the subject of the next post in this series.
Tax Breaks and Proposition 24
When California passed its annual budget, legislators included three tax breaks for businesses: a tax break involving single sales factor apportionment, a tax break involving financial losses, and a tax break involving tax credit transfers.
If these tax breaks sound confusing to you, you’re not alone; this blogger, for instance, has no idea what “single sales factor apportionment” even means, let alone the complicated economic effects that would result if this tax break were to be expanded or repealed. It would not be unreasonable to imagine that most of California’s electorate is similarly bewildered by these complex financial matters.
Yet now California’s voters are confronted with Proposition 24, which asks them to repeal these three tax breaks. Proponents argue that approving Proposition 24 will improve the state’s budget. They label the breaks as “big corporate tax loopholes” which won’t create jobs. Opponents argue that voting yes on Proposition 24 will lead to large numbers of lost jobs, while badly damaging California’s economy.
Very few Californians – including this one – have the ability or experience to evaluate these claims. Micro-level issues, such as tax credit transfer tax breaks, belong in the domain of the legislature and not on the ballot box. The job of elected officials and their staffs is to deal with these matters; that is what they do all day. Voters, on the other hand, will be presented with a profoundly complex subject and asked to decide “yes” or “no” on it in the span of a few minutes (or, at most, a few hours if one is an absentee voter).
Proposition 24 is the latest example of ballot-box budgeting, in which complex issues that should be decided by the state government are instead thrown to the ballot box in propositions nobody understands. Almost all of California’s newspapers have recommended a “no” vote on Proposition 24, which says quite a bit.
Personally, this individual’s political views do lean towards the “yes” side of Proposition 24 – against more tax breaks for businesses during a budget deficit. Nevertheless, voting for something one does not understand is not a good idea. And Proposition 24 fits that bill perfectly.
That is why I recommend a “no” vote on Proposition 24.