Much like Molly Munger’s school tax initiative, Prop 39 is on the ballot largely due to the efforts of a single person: hedge fund billionaire Tom Steyer. Steyer has been outspoken in his belief that wealthy individuals and large corporations are currently under-taxed and should be made to made to pay their fair share. He’s spent $21 million of his own money pushing a measure that would alter the way multi-state corporations are taxed in California.
Currently, corporations can choose to be taxed solely based on the amount of sales they make within the state or according to a combination of sales, property and employees. Since 2009, California has allowed to companies to select either method, doubtlessly whichever is cheaper. Prop 39 would eliminate that choice and force everyone to calculate their taxes based exclusively on in-state sales.
Some companies would pay more, others less; however, the bill’s backers estimate it will bring the cash-strapped state an additional one billion dollars in much-needed annual revenue and remove a tax incentive for companies to locate jobs outside California.
Opponents of the measure have two points: no one likes paying taxes (right?) and half of that $1 billion will be directed toward making government buildings more power efficient and other clean energy projects, unable to be spent on anything else.
For: Tom Steyer, League of Conservation Voters, Californians for Clean Energy and Jobs.
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