We said this almost 20 years ago.
Posted on 01/19/2013 7:47:55 AM PST by lowbridge
California’s dislike of business, and willingness to tax it into oblivion, is storied. As State Senator Ted Gaines (R-Roseville) is quoted saying in Crazifornia:
I am tired of my constituents and other business owners here being treated like pinatas by regulators and politicians who smack them around until some fine or penalty falls out.
Or some newly created tax liability – like the new retroactive (to 2008) tax that’s going to smack the Golden State’s golden goose upside the head. Henry Blodget explains in Business Insider:
As a way of encouraging entrepreneurs and investors to start companies in California, the state has long offered a tax deduction for those who start, invest in, and eventually sell companies.
This tax deduction allowed entrepreneurs and angels to exclude 50% of any gain on the sale of “Qualified Small Business” (QSB) stock.
California’s capital gains taxes are a high 9%, so the deduction reduced the capital gains rate to 4.5%. This encouraged the entrepreneurs to start and keep their companies in California, instead of decamping to lower-tax states.
And, for many years, California entrepreneurs and investors have taken advantage of the deduction.
But now the state has apparently decided that it no longer needs to encourage entrepreneurs to start and keep their companies in California.
So it is eliminating the tax deduction.
Far more startling, the state is eliminating the deduction retroactively–going all the back to 2008.
(Excerpt) Read more at crazifornia.com ...
It should not be legal to make changes in tax rates retroactive. That is the ultimate in tyranny. How is anyone supposed to forecast that greedy politicians will find a new way to try to extort even more taxes than they already got?
Bad idea; I hope it is challenged.
I don’t know the details, but on the face it sounds like ex post facto law.
Yes, it should be but Clinton and the Democratic Congress did it on a national basis. When the money is already spent or invested, tax claims of this nature coupled with Obamacare could end a business life. Obviously California is in desperation. Look for other liberal and/or fiscally insolvent states to follow if this works.
Will Barry Dunham get inspired to do likewise on a national level?
To call the “Lucy pulling the football” is an understatement.
Yet Clinton only made it retroactive to the beginning of the current year (still an ex post facto law). This goes back several years.
I have heard some leftards call for a retroactive tax increase going back to the pre-Reagan era tax rates.
next up will be a fee due from any business leaving the state over the past 10 years plus interest and penalties. Ca will be dunning business all over the country.
We said this almost 20 years ago.
Links aren’t working for me.
Thanks lowbridge. The links are working now. I’m not sure what was happening with them.
Constitution, Article 1, Section 9: "No bill of attainder or ex post facto Law shall be passed."
Article 1, Section 10: "No state shall.... pass any bill of attainder, or any ex post facto law, or law impairing the obligation of contracts..."
That seems pretty clear on both the Federal and State level, doesn't it?
You'd think so. But as Boomer One pointed out in reply #6, Clinton and his congress ignored it.
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