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Commentary: State tax code is inhospitable to business

I had three separate experiences recently that reinforced just how bad things are for business owners in California.

A letter to one of my previous campaign supporters came back, and when I followed up with email, I learned that this pizza restaurant owner had moved the business to Texas. The California tax and regulatory burden had simply become more than this person was willing to handle.

This person had been a leader in the community, organizing girls lacrosse leagues and youth sports programs throughout the city. I sadly learned that other old friends had moved to Nevada and Arizona for the same reason: high California taxes.

At the same time, I received through my old business email address an invitation from the Northeast Texas Economic Alliance, soliciting my relocation to Texas and offering to detail all of the tax advantages of Texas versus California.


During the recent Irvine Chamber of Commerce Business Outlook Forum, Forbes magazine Publisher Richard Karlgaard made the startling prediction that California-based Chevron Corp., Northern California’s largest employer, would relocate to Texas in the next five years because of the California tax structure.

Can you blame them? California sales and income taxes are among the highest in the nation. The top 1% of California earners pay 41% of total personal income taxes but earn only 21% of the income.

The Proposition 30 income tax increases will take more than $5.6 billion annually from California’s most productive job creators. CEO Magazine again ranks California as the “worst state for business,” a title we have held for eight years in a row.

Because California treats capital gains as ordinary income, our tax system is volatile and disadvantageous to investment. It is a sad commentary indeed to say that the federal tax system, flawed as it is, actually does a better job of promoting investment and job creation.


Recent proposals to raise property taxes on commercial property through the so called “split-roll” would sock California business property owners with a $6 billion bill to be passed on to tenants and shoppers. Pepperdine University estimates that this would also cost hundreds of thousands of jobs.

California cannot grow unless we can create jobs in the private sector, and we cannot grow jobs unless we cut taxes and become competitive with states that are welcoming our job creators with open arms and low taxes.

KEITH CURRY is a Newport Beach councilman and candidate for the 74th Assembly district.