Senate expected to vote on governor's jobs plan

September 9, 2011 12:00:00 AM PDT
With the legislative session closing, Gov. Jerry Brown's plan to promote job creation through tax reform remained in limbo Friday night in the state Legislature.

The state Senate was expected to take up AB40X1 in the last hours of this year's session. The Assembly approved it Thursday with bipartisan support.

The bill requires Republican votes, but so far the GOP leader in the Senate says the proposal is being rushed.

"There is nothing more complex than tax reform and trying to jam through a proposal on the last day of session without transparency or input from the public and tax experts is irresponsible," Senate Republican Leader Bob Dutton of Rancho Cucamonga wrote in a letter to Brown on Thursday.

Brown's plan calls for closing a 2009 tax loophole that benefited large, out-of-state corporations by allowing them to choose between two formulas and thus, lower their tax liability. He wants them to follow one formula by calculating it solely on the portion of sales they have in California, which would generate an estimated $1 billion in additional revenue for the state each year.

The governor proposes to use the proceeds on tax breaks for California manufacturers and small businesses by encouraging them to buy equipment and expand in the state. He also would use some of the money to increase the standard deduction on the state income tax, which would provide more cash to more than 4 million working Californians.

Individuals would be able to claim an additional $1,000 and couples $2,000. For 2011, the standard deduction for individuals is $3,769 and $7,538 for couples.

Brown has called on the Senate to take action on a bipartisan plan.

"Now, small businesses and working families in California are counting on the state Senate to do what is right by closing this toxic tax loophole, acting as Californians first and putting our state back to work," the governor said in a statement Thursday.


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