Golden State goes after gold

Golden State goes after gold

Imposing higher taxes from years gone by could be a new option for revenue-hungry government bureaucrats.

Even at the risk of giving Gov. Pat Quinn a bad idea, it's hard to resist the urge to comment on a recent tax squabble in California.

The Golden State made headlines in the November election by passing a gigantic tax increase on high-earners, so much so that California Gov. Jerry Brown, better known to many as Gov. Moonbeam, has claimed the state's financial problems have been solved.

That claim strains credulity. But he said it, so it must be so.

Nonetheless, California's newly claimed financial security hasn't stopped state tax officials from launching a reign of terror on the business community in the form of retroactive taxes plus interest on money they didn't owe.

Say what? California law provided a tax break to 2,500 entrepreneurs and stockholders of small businesses who maintained at least 80 percent of their employees in the state.

The idea was to provide an incentive for businesses to expand employment in California rather than in some other lower-cost state. Apparently, it was quite popular and successful.

But a California court recently struck down the rule. State tax officials could have sought guidance from the legislature as to how to respond. Instead, they sent bills going back five years for taxes now owed plus interest to individuals who followed the law as it was written at the time.

The tax targets, naturally, are howling about the rough treatment. Legislators are making noises about reversing the tax bureaucracy's decision.

But if the decision stands, the state will have sent an ugly message to its job creators — following the law as written is no defense to future claims of tax liabilities or penalties for not complying now with how the law might be interpreted in the future.

Sections (2):Editorials, Opinion
Categories (2):Editorials, Opinions

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Sid Saltfork wrote on March 25, 2013 at 10:03 am

TAX THE RICH sounds a lot better than continue to steal from the poor.  The financial inequity has returned to the 1890's.  The middle class needs to be rebuilt.  Tax the Rich until the balance returns.