Wednesday, October 6, 2010

Is Meg Whitman pro Manufacturing?

California will elect a new governor in approximately 30 days. I provide location advice to owners and occupants of industrial buildings in Southern California. Location Advice was curious if Meg Whitman will be pro manufactruing. Small businesses, especially manufactruing, represent a tremendous percentage of the job creation in California. Our manufacturing industry is heavily regulated at the state, county, and local level in California. Many of our largest manufactruing companies in California are seeking "friendlier" locations from which to operate. In my view, California needs to become more business "friendly" in order to spur the entrepreneurial spirit that California industry once enjoyed.

According to "Meg 2010, Building a New California, Meg Whitman's Policy Agenda" , Ms. Whitman would favor:

Eliminate the Small Business Start-Up Tax:

Meg will eliminate the $800 fee that new business start-ups are currently required to pay in California. Entrepreneurs should not be penalized for launching a business venture. The LLC filing fee is nothing more than a tax on jobs. The state that put “startup” into the national lexicon needs to repeal this tax.

Eliminate the Factory Tax:

California is only one of three states that taxes manufacturing equipment without offering a tax credit or exemption. The factory tax is a major obstacle to keeping high-paying manufacturing jobs in California.

Increase the Research and Development Tax Credit:

Meg will increase the R&D tax credit for California businesses from 15 percent to 20 percent, which conforms to the federal level. This is the same level of tax credit that many of the states we compete with offer today. This tax cut will promote investment in the technologies and industries of the future. California is the innovation capital of the world and our tax policies need to be aligned to support our major economic advantages.

Promote Investments for the Agriculture Industry:

The agriculture industry is vital to California’s economy. Meg believes that by providing a tax credit to encourage investments in water-conservation technology, we can reduce our state’s consumption and benefit all Californians.

Eliminate the State Tax on Capital Gains:

California is one of a few states in the country that doesn’t tax capital gains at a lower rate than traditional income. This is double taxation at its worst. California’s tax treatment of capital gains is a major impediment to capital formation and investment in new jobs. We should align California’s tax treatment of capital gains with other competing states. AK, FL, NV, NH, SD, TN, TX, WA and WY have No State Capital Gains Taxes.

Did you know?“ Excessive taxation starves our economy of innovation and entrepreneurship. We need to build the new California economy with the goal of making it easier to start a new business and create jobs in our state.” – Meg Whitman

Establish Academic Enterprise Zones:

Meg will take advantage of the academic excellence at our universities and create economic opportunity zones to encourage businesses to locate within a specified zone around these institutions. Tax incentives offered within these zones would be focused on hiring workers, promoting research and development, increasing access to state funds and loans and encouraging a close collaboration with universities. For example, the University of California, San Diego and the biotech region of San Diego are closely linked and provide leverage points for significant economic growth and job creation. The same is true in communities where other UC campuses are located.

Accelerate Depreciation of New Business Equipment:

Meg will provide a more favorable depreciation schedule to encourage farmers, manufacturers and other companies to invest in new equipment and technology that will make them more competitive and able to hire Californians.

On balance, I believe that Whitman is in fact pro manufacturing! What do you think?

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