California is losing billions by giving out too many tax breaks

[TexasTowelie]

What a concept! After blindly giving out generous tax breaks for years, take a hard look to see whether they’re actually benefiting the state.

Do they create jobs? Lure businesses to California? Keep them here? Help companies expand? Fight climate change?

Our legislators and governors should have been asking these questions all along and demanding answers. They’ve long yammered about conducting more oversight of just about everything the state does, but they invariably lose interest. There’s no political reward in wonky studies. But there’s lots of political risk in closing loopholes and requiring certain interests to pay higher taxes.

It takes only a simple majority vote in the Legislature to create a tax break. But it requires a difficult two-thirds vote to cancel the break and raise a tax. Doesn’t make sense.

Read more: https://www.eastbaytimes.com/2019/04/19/skelton-california-is-losing-billions-by-giving-out-too-many-tax-breaks/

[beachbum bob]

1. makes perfect sense for those seeking tax breaks doesn't it?

[SWBTATTReg]

2. I think a lot of states and cities are giving out too many tax breaks, all in a desperate bid by...

politicians and other nefarious parties to stay in office longer or make money at the expense of tax payers ('hey look, I created tons of jobs here!' or 'hey, I've increased the tax base!', 'hey, I've got loads of land here for sale!' etc.), FOXCONN of Wisconsin is a top notch example of this ridiculous tax giveaway.

First of all, these tax giveaways don't work for the most part, they are misdirected and ill conceived (Foxconn in WI again) and usually don't end up with the so called anticipated results that the politicians are promising. Also, competition between states drives up the cost of goodies used to entice the companies to build in one particular state (vs. the other state(s)) but this ends up costing the 'winning' state more in tax revenues then it was worth.

I know that States' rights are important as a check against the powers of the federal government, but remember, these very same states' rights are being used as a sledgehammer against the taxpayers of one state against the taxpayers of other states (competing for factories, etc.). States need to band together so there won't be unfair competitive practices undertaken by nefarious entities, and some type of regulatory checks and balances needs to be incorporated into this whole process.

[Auggie]

3. Yes. And then there's the tax exemption for digital products.

California – Digital products are tax exempt in California. The “sale of electronic data products such as software, data, digital books (eBooks), mobile applications and digital images is generally not taxable” (though if you provide some sort of physical copy or physical storage medium then the sale is taxable.) (Source: California BOE Publication 109 – “Non Taxable Sales”).

https://blog.taxjar.com/sales-tax-digital-products/

That's a loss of billions in tax revenue