Gov. Brown wants tax changes to promote job growth

August 25, 2011 8:37:30 PM PDT
Gov. Jerry Brown on Wednesday revealed his plan to promote job growth through corporate tax changes.

Brown unveiled the package in his first meeting with Capitol reporters in nearly two months.

The plan increases the hiring credit from $3,000 to $4,000 per employee for small businesses with less than 50 workers, gives companies a sales tax break for buying new manufacturing equipment and eliminates a tax loophole that allows companies to choose between two tax formulas when calculating tax liability.

Brown says the loophole gives incentives to the wrong people.

"Every time an out-of-state company moves a job out of California, they get a tax break and every time they hire in California, they increase the taxes they pay, that why it is truly perverse, outrageous and needs to be eliminated," Brown said.

Genentech says it built a plant in Oregon because it would have cost more to expand in California.

"By reforming it, that means when we're building in California, we're not penalized for putting an extra brick or extra person in California and we're not incentivized to build out of state," Genentech spokesperson Andrea Jackson said.

But because the plan is a tax change, the governor will need a two-thirds vote and Republicans are already giving his jobs plan a thumbs down.

"It's not a solution, it's an agreement that we made with businesses and now they want to break that under the guise of 'this is good for jobs,'" Assm. Connie Conway, R-Tulare, said.

When pressed on how many jobs his plan will create, Brown couldn't say.

"These are incentives, OK, and removing disincentives, the exact number, that's what we call the 'fallacy of misplaced concreteness,'" Brown said.

Boeing and Genentech support Brown's plan but getting it through the Legislature is going to be a challenge.

Brown also wants to renew an expiring surcharge that appears on residents' electricity bills even though a recent audit found that 10 percent of that money is spent on questionable research.

Load Comments