Prop. 24 Will Hurt California Businesses, Big and Small
Proposition 24, on the November ballot, is all about jobs.
Prop. 24 will cost us as many as 322,000 jobs a year…next year, and for some years to come. Prop. 24 will cost us as much as $1.8 billion a year in revenues to the state…next year, and for some years to come.
Those numbers come from a brand new analysis of Prop. 24, done by economists at the Rose Institute, Claremont McKenna College.
Prop. 24 doesn’t play favorites. It hurts small businesses and big businesses (potentially more than 120,000 businesses here in California, according to the state). It hurts high tech and green tech, and it hurts contractors and grocers. It hurts our schools and every other public service that involves the state.
Here are a few examples of Prop. 24’s impact.
These days, many small businesses can’t get a dime in loans from the banks. So small business owners try to stay afloat by putting more and more of their own dwindling cash in…or find ways to cut back a little of everything, to try and keep everybody working and to hang on just a little longer. Prop. 24 cuts one of the few lifelines small businesses have left – by making it very difficult to spread their losses out over time for tax purposes.
Or take a biotech company working on a promising medical treatment. That research can take 10 or 15 years, or even longer, before a new medicine is ready to come to market. All that time, the company is putting money into developing a treatment – but not seeing any return. Prop. 24 makes it very difficult for many companies to get any help from the very research and development tax credits, that were intended to cover this situation.
Now look at a big company with operations here in California, and in other states. It has to decide where to put a new plant. Prop. 24 would return us to an old formula – which would increase that company’s income taxes if they build a new facility here in California and hire workers to staff that plant. In other words, Prop. 24 opens the door to taking those jobs and that plant, out of California.
One last example. A healthy state budget – which provides money for schools and parks, for highways and public safety – depends on a healthy state economy. Californians working and paying taxes, California businesses staying here, growing here, doing business here – that’s where the money comes from. So if Prop. 24 costs us jobs, and pushes business elsewhere – our schools and other public services suffer too.
None of this is news. You can read about these tax policies in any economics textbook. The Legislature debated these policies for years before it finally passed them. And plenty of other states have already grabbed the competitive advantage that Prop. 24 would take away from us. Every Western state (except New Mexico) has at least one of the reforms in place, which Prop. 24 would undo here. Same with the biggest states we compete with for jobs around the country…New York and Texas and Illinois.
Whether you look at the hundreds of thousands of jobs Prop. 24 would cost us, or the 2 million Californians out of work already…whether you look at the budget deficit we’re facing today, or the billions in lost revenue that Prop. 24 would costs the state…whether you look at small businesses or large, new economy or old…no matter how you look at it…we just can’t afford Proposition 24.
You can find more information at www.StopProp24.com. Please join us in voting no Proposition 24.