Freedom Line Blog

We’ve made a bit of a cottage industry here at CFIF of chronicling the downfall of California, a truly great state where metastasizing liberalism threatens to kill its host. Over the weekend, the Daily Caller’s Angelica Malik put the results into sharp relief:

The California Manufacturing and Technology Association found in a recent study that 82 percent of companies surveyed did not consider California when expanding or opening a new facility.

The study also noted that companies looking to expand their operations favored states with proximity to their customers, generous tax incentives, low cost labor, proximity to suppliers and a comprehensible and a favorable tax system.

California ranked last or bottom tier in all of those categories.

This comes on top of the recent news that the Golden State ranked last in CEO magazine’s ratings of state business climates for the eighth straight year.

The upshot: billions in lost revenues, millions in lost citizens, and hundreds of fleeing businesses (with scores more downsizing or dismissing the prospect of heading to California in the first place).

There’s little here in the way of silver linings, except for this: there’s a fair bit of education here for the rest of the nation. If the Lilliputians of liberalism can tie down even mighty California, they can wreak untold havoc anywhere. No one is immune. It’s just a shame that it requires such a significant casualty to convey this point.

Never underestimate the power of positive thinking.  With a level of spin only a well-heeled campaign operative could rival the IRS is trying to allay small business owners’ fears of an “avalanche” of new1099 reporting requirements that life under the new rules won’t be so bad.

With an assist from CNN, here’s IRS Commissioner Douglas Shulman’s attempt to slather lipstick on a pig:

The IRS will have broad leeway to interpret the rules — and it’s already showing signs that it will look for ways to staunch the paperwork flood.

In a late May speech before the two payroll industry trade group, IRS Commissioner Douglas Shulman announced a major exception to the new rules: The IRS plans to exempt transactions made through credit and debit cards. A separate reporting requirement kicks in next year that will cover card transactions and help the IRS spot unreported payments made through those channels, “so there is no need for businesses to report them as well,” Shulman said. “Whenever a business uses a credit or debit card, there will be no new burden under the new law.”

Geez, Doug, I can’t tell you how much better I feel knowing that no matter when and where I swipe my business card I don’t have to report it because you already know about it.  What a relief!  Now that you can spot every single transaction I make, I’m sure the helpful agents at the IRS won’t hold it against me if I forget to include one of those payments on my tax return; right?

I mean, you’re trying to help small business owners by relentlessly monitoring all of our electronic transactions; aren’t you?  After all, you’ve got “broad leeway” in interpreting your new powers…

If you ever nursed the idea that taxation isn’t a form of punishment, President Barack Obama is here to disabuse you.  A day after Congress passed massive new regulations on the financial industry, the president today called for passage of a 10 year, $90 billion tax on banks and hedge funds to pay for the 2008 financial bailout.  To quote the president:

“We need to impose a fee on the banks that were the biggest beneficiaries of taxpayer assistance at the height of our financial crisis — so we can recover every dime of taxpayer money,” Obama said in his weekly radio and Internet address.

And yet the tax/fee/legalized theft won’t be levied on just “the biggest beneficiaries.”  It will hit every bank with assets over $50 billion and hedge funds with more than $10 billion.  That means even the financial institutions that have already repaid their bailout debts will be hit with the 0.15% increase in the cost of doing business.

But remember: businesses don’t pay taxes (or fees) – people do.  Keep that in mind when your monthly service fees jump through the roof.