Adding to burden
Dems' plans turning business climate darker
July 23, 2008, San Diego Union Tribune
For years, state Democratic leaders have dismissed complaints about a hostile business climate. They point to the huge, long-term growth of California's economy since World War II and assert that this is such a great place to live with such a talented work force that businesses will put up with a lot to stay here.
This argument may be partly true with two of California's most successful industries – the movie-TV business in Hollywood and high-tech companies in Silicon Valley. But for the economy in general, any claim that the state is somehow immune to competition is ludicrous.
This is underlined by three recent developments. First, Toyota decided to build its first U.S. Prius production plant in Mississippi after earlier reports it was leaning toward Fremont, a loss of 1,000 relatively well-paying jobs. Then AAA of Northern California and AT&T announced plans to move nearly 1,100 customer-service jobs to Texas and other states.
All this came on top of broad job losses in many industries that drove the state unemployment rate to 6.9 percent in June. The last time it was worse was in November 1996. Of the 50 states, only Michigan and Rhode Island have higher jobless rates.
But none of this grim information appears to register with Democratic lawmakers, who demand higher corporate taxes and want to raise income tax rates on the affluent – already the highest of any state – even higher. This might be shrugged off by Viacom and Sun Microsystems, by Jay Leno and Yahoo's Jerry Yang. But most of the others in Democrats' cross hairs won't be so forgiving, especially the small-business owners who would be hardest hit by the proposed income tax hike.
These business people don't just create jobs; they create revenue for the state. Especially in the middle of a budget crisis, the last thing we should want to do is run them off.