Eureka, which is the state motto for California, means simply “I have found it”. And after reading a recent article on a new tax code hiccup about to hit certain California businesses, I believe many of them will have their own “Eureka” moment.
If ever a tax scheme could be concocted to frighten away any level headed entrepreneur, this new tax code twist in California would be at the top of the list.
According to the Wall St Journal, certain companies could lower their capital gains taxes by investing in “qualified state businesses” whatever that means. However, a court recently ruled this practice unconstitutional. Ok, no problem. But the fix, if adopted by the state Franchise Tax Board, is hugely unfair and outright insane.
From the article - “Instead of simply ending the tax incentive going forward, the state Franchise Tax Board has ordered investors who used the tax break to pay five years of back taxes. As a special insult, these taxpayers may have to pay interest and penalties on the "unpaid taxes" they were never required to pay in the first place.”
Imagine being assessed penalties and interest on taxes you weren’t required to pay! If there were any doubt that any semblance of equity, fairness, and justice had long departed Sacramento this is solid proof.
California might as well erect signs at its border telling would-be entrepreneurs to FLEE!