By Erik Anderson, KPBS
San Francisco hedge fund manager Tom Steyer has already fought and won a battle at the California ballot box. In 2010, he helped defeat Proposition 23. That measure would have rolled back California’s landmark global warming law. Now he’s putting $20 million of his own money into passing Proposition 39.
“It’s about tax fairness,” Steyer says. “We are closing a loophole, but all we are asking out-of-state companies to do is to pay taxes on their income exactly the way that we do. And what that will do is bring into the state of California over a billion dollars every single year, and all from companies from out of state.”
The Legislative Analyst’s Office has estimated that’s the amount of revenue the tax-change will generate. The LAO also said that “while only a small portion of corporations are multistate, [they] pay the vast majority of the state’s corporate income taxes.”
The history of Prop 39 is rooted in a change in the tax code that the California Legislature made in 2009. That’s when lawmakers gave companies a choice of how to pay their corporate taxes, says San Diego State University business professor Steve Gill.
“For years and years and years, we had a long tradition of using a three-factor apportionment formula,” Gill says, “which meant we look at three different factors that are economic drivers of income: sales, property and payroll.” Continue reading