After doing a little reading on Governor Schwarzenegger’s weekend action on legislation, it appears that on nuts-and-bolts business issues, he’s generally sticking to his pro-market, enterprise-supporting ideals. (How then to explain his embrace of economy-killing anti-global warming hooey? Well…hooey and Hollywood aren’t that far apart in the dictionary.)
But what about this? Don’t pretend the understand the issue, but if the good people at the California Manufacturers and Technology Association are as unhappy as this post communicates, seems safe to say it’s a bad idea:
Enactment of tax bill sets terrible precedent
Oct. 12 , 2007
Governor Arnold Schwarzenegger has signed AB 198 (authored by the Assembly Budget Committee) which emerged in the final hours of this legislative year as a “gut and amend” measure to limit the rights of taxpayers in pending and future litigation over the constitutionality of the state’s fees on Limited Liability Corporations (LLCs).
Under AB 198, remedies for constitutional challenges to the LLC fee would be limited to a refund of the difference between the LLC fee, as it would have been applied constitutionally, and as it actually was applied.
CMTA opposed AB 198 because it changes the rules on taxpayers involved in pending litigation, applies to open tax years prior to January 2007, and denies full refunds to taxpayers that are subject to a tax already declared unconstitutional by the courts.
We fear that enactment of this law will invite the legislature to further interfere with pending taxpayer litigation and write retroactive bills to limit taxpayer remedies in other areas of the tax code. AB 198 establishes very poor tax policy by denying taxpayers legitimate full refunds simply to enrich the state coffers with only a simple majority vote.
More on Arnold’s philosophical rigor over the next couple of days.
P.S. Speaking of Nanny States, Schwarzenegger signed SB 7 into law. “This bill would make it an infraction punishable by a fine not exceeding $100 for a person to smoke a pipe, cigar, or cigarette in a motor vehicle, whether in motion or at rest, in which there is a minor.” But it’s only secondary enforcement…for now.
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