Dan Walters

By Dan Walters
Published: Tuesday, May. 8, 2012 – 12:00 am | Page 3A

California is struggling to emerge from the worst recession since the Great Depression and has more than 2 million unemployed workers, plus countless others who have given up seeking work out of frustration and/or have fled to other states.

Clearly the state needs many billions of dollars in job-creating investment. But its attractiveness to that investment is, to say the least, problematic, given its relatively high tax burden, its dense regulatory structure, its deficiencies in education, transportation and water supply, and its tangled government finances.

Chief Executive magazine’s most recent survey of corporate leaders finds that California ranks dead last among the states in business climate for the eighth straight year.

Given that, one might think that Gov. Jerry Brown and other political figures would place improving the state’s investment climate at the top of their agendas. But they may be making California less competitive.

Brown’s tax increase ballot measure, for instance, would sharply increase state income taxes on those at the top of the economic pecking order. And Brown and other politicians are fiddling around with corporate taxation, aiming to increase taxation of out-of-state corporations by about a billion dollars a year.

Requiring multistate corporations to base their California tax liability on what’s called a “single-sales factor” would, if enacted, tax out-of-staters more while, it’s said, benefiting in-state companies.

But that’s a bit specious because the in-staters already have the option of using sales only to apportion taxable income, if they wish, thanks to a change in law three years ago.

Two years ago, voters turned down a measure to impose the single-sales factor on all corporations, but it’s back this year.

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