Proposition 39 is gaining plenty of momentum among labor groups and families. There is the growing appreciation that not only will this new venture help to bring revenue and funding to the state, but it will also protect Californian workers. This massive change to this tax loophole would help to keep business within California. This is particularly the case for all those working within the green energy industry.
There is a lot of ill feeling regarding the issues surrounding Prop 39 and business laws.
There are different ways of looking at Proposition 39 from a business standpoint. There is the negative approach, which focuses on the need to punish the out-of-state businesses that enjoy their tax breaks and damage the Californian economy. Then there is the positive side of the change to readdress the balance.
This would improve the situation for green energy specialists struggling to find employment. Some will focus on that revenue gained from the proposition of $1 billion per year. This is the clearest example of redistribution and equality. Others will look deeper at the chance to improve job prospects with Californian-based companies – especially within the green energy and green tech.
So what exactly is the problem here, and what is the proposed solution to help Californian business?
The main issue here is that out-of-state companies currently benefit from an unfair triple factor method of tax collection. They get to choose what they pay – and understandably tend to go for the cheaper option. It also means that these companies can set up headquarters elsewhere and take jobs out of California, with a nice tax break for doing so.
This harms local business and prospects for skilled workers within the state. The proposed solution here is to switch to a single sales factor to close this loophole for good, and level the playing field. This would mean no incentive to take business out of state. In return, more job creation in California and better opportunities for the workforce.
Voters also cannot overlook the issue of cost and revenue during this vote.
The current loophole leads to a loss of $1billion per year, which is greatly needed across the state. A change in the law would see this money returned to California and redirected into substantial funds. The basic idea here is that half would go into public services – notably education – while the other half would go into green energy initiatives. There are other propositions of what to do with the money saved, but this is the one currently attached to prop 39. Governor Brown suggested that it should all go to business tax breaks. Meanwhile, Assembly leader John Perez looked at directing all the money toward college scholarships for middle-class kids.
There is a bright idea here that every worker and business will benefit in some way with Prop 39. It will start with the chance to keep major firms in the state. This will allow for the knock-on effect of job growth and improvements in the local industry. Extra funds and revenue will increase this further with investment in green energy and education for the next generation. A Yes vote is a must for Californian workers.