They are quibbling over $80 million in tax credits for employers who brought in around $335 million in annual state income tax via their employees. Then they wonder why employers are leaving the state.
The San Jose Mercury News is reporting:
The companies that received rebates Tuesday are responsible for more than 40,000 jobs in California, which pay an average salary of $90,000, said Carl Guardino, the head of the Silicon Valley Manufacturing Group. Even though the companies were able to effectively zero out their state income-tax liability, they still paid sales tax, property taxes and payroll taxes, he said.
So let’s do the math:
40,000 Jobs Created
$90,000 Average Income Per Job Created
40,000 X 90,000 = $3.6 billion in annual income
The top tax rate in California is 9.3%
$3.6 Billion X 9.3% = $335 million in annual tax revenue
So in exchange for a one time tax credit of $80 million the state gets $335 million every year those jobs are still in California, plus all the other taxes these employers are required to pay.
But Democrats would rather jump over dollars to save dimes. That is why they continue to chase employers out of the state.
“I can promise Ms. Migden something: She will never, ever, ever have to worry about my company building a plant in California again and getting insulted when we ask not to be taxed for the privilege of building a plant,” he said. “We’ll go somewhere else where they not only do not tax us for building a plant, but they actually give us incentives and credits and subsidies to create jobs.”
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