Many FlashReport readers that closely follow California policy are familiar with the California Budget Project.  Hiding behind a rather innocent-sounding name, this group is staffed with hard-left ideologues who are passionately committed to the idea that bigger government is better government (right on their website’s splash-page is an article entitled, "Why Tax Cuts Don’t Work.").

While we respect them for being passionate ideologues, we think it is important when possible to provide counter-point to their advocacy for the modern welfare state.

Proposition 24, which will appear on the November ballot (courtesy of major funding from the California Teachers Association) seeks to undo changes in the state tax code implemented last year that, for all practical purposes, would make Californian a costlier place to do business for a good number of the state’s larger employers.  While we here at FR were very unhappy about the 2009 budget deal, and its massive tax increases, these tax code changes were a positive by-product. 

The No on 24 campaign released a University of Southern California study on how the passage of 24, repealing these tax code changes, would cost a lot of jobs in this state (You can see the study here.).

Of course the California Budget Project lefties immediately started attacking the study (You can see their critique here).

The No on 24 campaign has produced a "response" the CBP attack, which you can (and should) read — it’s linked at the bottom of this commentary.  Immediately below is a quick summary.

Look for the CTA to wage one of their typically dishonest campaigns throughout the Fall.  And look to their allies at the California Budget Project to continue to push their left-wing point of view…

Memo From No On 24 Campaign
Re:  Response To Critique Of Swenson Study

The author of a study finding that 144,000 jobs and millions of dollars in increased state revenue are at stake in the Proposition 24 vote this November, presents a point-by-point explanation of his research – to counter a misleading critique from a group supporting the Jobs Tax Initiative (see the attached response). 

In his response, Charles Swenson, economics professor and Leventhal Research Fellow at the Marshall School of Business at the University of Southern California, refutes claims made by the California Budget Project.

Swenson’s research examined one of the tax reforms Proposition 24 aims to repeal – basing the income tax of multi-state companies on their sales in California, known as the single sales factor (SSF).  Prop. 24 would force companies back to an old formula – abandoned by states across the country – that increases taxes when businesses hire new employees or build new facilities.

In brief, Swenson’s response notes:

•    His estimate of the jobs impact of single sales factor in California — creation of 144,000 new jobs – is conservative, and could actually be higher.
•    In five states he studied where SSF is already in effect — even during a time of recession – employment went up at companies that adopted single sales factor, though employment went down in the state as a whole.
•    The state of California would take in an additional $411 million per year in overall tax revenues because of single sales factor.

Swenson’s report and more information are available at www.StopProp24.com.

This entry was posted on Friday, July 23rd, 2010 at 12:00 am and is filed under Blog Posts.