In a sign of the divergent economic philosophies that govern the country's two largest economies - California and Texas - each state is embracing different methods to tackle their massive budget shortfalls.
California legislators introduced a bill last week that, if passed, will force any web-based retailers in connection to the state of California to pay the state's sales tax. According to the Orange County Register, the levee would raise $300 million per year - a minimal sum in light of the state's 18-month budget shortfall of $25 billion.
Proponents maintain the measure will balance the playing field for small businesses, while opponents argue it will only impede or even discourage small firms creating a California LLC.
"Taxation will artificially increase costs, increase the burden on companies to comply with the taxation procedures, make California even less competitive and may force companies to move their operations offshore, causing further job losses," Jack Bicer, CEO of Irvine-based Septium Corporation, told the Register.
Meanwhile, in order to meet its massive budget shortfall, the state of Texas - at least its governor - has vowed not to raise taxes on businesses or individuals, claiming it can balance the budget by means of spending cuts alone.
Tags : ca, incorporation news, taxes
Posted: Feb 1st, 2011