taxbear;524365 said:

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But this is not an effort to impose a tax on Amazon. It's an effort to require Amazon to collect a tax from its California customers that the customers owe. Internet retailers with sufficient presence (under Constitutional standards) in California are required to collect this tax; the "affiliate law" is one that several states (NY being the most notable) have passed to establish that the use of affiliates provides a sufficient presence in the state to require the retailer to collect the tax. Amazon lost court challenges in NY, and now collects the NY tax.

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This post and your previous post echo what my accountant tells me every year. I make several on-line, professional equipment purchases a year to support my home business and I pay the CA use tax. I still get the benefit of the wider market place provided by the internet and the lower prices possible from that market.

This "Business unfriendliness" = more VC money than almost all other states combined.

It wouldn't do any good for CB93 to explain it to you, as you wouldn't understand it anyway!

calbear93;524701 said:

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OK...how about Chief Executive.net. Or any other publications that rate California as one of the worst places for businesses. Also, from personal experience, when a company acquires another company with operations in CA, I never see my clients look to move or consolidate operations into the CA location. Now, if the boards and CEOs who make the decisions on where to expand or relocate certain plants or operations view CA in such a negative light, do you think they would choose to go to California? I can see certain tech companies doing that, but most other industries will not.

http://chiefexecutive.net/best-worst-states-for-business

http://www.bizjournals.com/sacramento/news/2011/04/20/california-among-worst-biz-friendly-tax.html

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I have little doubt that CEOs would love to relax the regulatory and tax environment of California, since it would make their jobs easier, however citing their opinions about these things is not the same as saying that companies are actually leaving California at a rate faster than other businesses are arriving or being created to replace them. Some companies may dislike the taxes but choose to stay for other reasons.

The 1:1 comparison of California to Texas at this one given moment is not that useful either; there could be many reasons why one state is losing jobs while another is not. The regulatory climate could be only one small part of that.

calbear93;524701 said:

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Fair enough. I couldn't find the graph that I remember seeing. But here is another study.

http://thebusinessrelocationcoach.bl...g-away-or.html

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This is a "study" that is simply a list of companies that have left the state (in whole or in part), with no attempt to make comparisons and determine if this has actually resulted in a net loss, or if more companies are leaving California than are leaving most other states. It's not much of a methodology. I'm sure many companies leave CA every year -- it's a big state with a lot of competition, and there are a lot of companies.

Furthermore, it seems to me that nearly every one of these articles is written by someone with a clear agenda to promote less regulation and lower business taxes, just based on the language they use and the conclusions they jump to without a truly rigorous examination. This is better than nothing, but it's not really the proof I'm looking for.

Hey, I found something on an older thread:

http://bearinsider.com/forums/showthread.php?p=460505#post460505

Apparently the Goldman School of Public Policy has done studies on the issue and always concluded that it's not the regulatory climate in CA that drives businesses away. Businesses know that CA has heavy regulation and choose to come to the state anyway because there is money to be made (large population centers and a skilled, educated workforce).

drunkoski;524868 said:

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i'm not paying for it and nor are you. if jim blow ceo makes $1 trillion a year you don't make less money. not sure i'm understanding your envy.

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That's not correct. Most CEO's are payed at least partially in stock. So if a CEO cuts wages and benefits then, all else equal, their stock should rise. So if all CEO's are doing this then all employees are making less money and all CEO's are making more money.

sycasey;524842 said:

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I have little doubt that CEOs would love to relax the regulatory and tax environment of California, since it would make their jobs easier, however citing their opinions about these things is not the same as saying that companies are actually leaving California at a rate faster than other businesses are arriving or being created to replace them. Some companies may dislike the taxes but choose to stay for other reasons.

The 1:1 comparison of California to Texas at this one given moment is not that useful either; there could be many reasons why one state is losing jobs while another is not. The regulatory climate could be only one small part of that.



This is a "study" that is simply a list of companies that have left the state (in whole or in part), with no attempt to make comparisons and determine if this has actually resulted in a net loss, or if more companies are leaving California than are leaving most other states. It's not much of a methodology. I'm sure many companies leave CA every year -- it's a big state with a lot of competition, and there are a lot of companies.

Furthermore, it seems to me that nearly every one of these articles is written by someone with a clear agenda to promote less regulation and lower business taxes, just based on the language they use and the conclusions they jump to without a truly rigorous examination. This is better than nothing, but it's not really the proof I'm looking for.

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Look, it probably won't matter who the source is if it conflicts with your opinion because you're going to think it is biased or unreliable. Of course CEO's opinions matter since, subject to board approval, the CEOs have final say on restructuring, capital expenditure, and relocation. If they think CA is the absolute worst for business expansion, it does matter. They are the decision makers.

Also, if you read the reasons cited by the company themselves in the "study," you would see the reasons often being cited by the companies themselves are the cost-savings and business friendly environment in the new location. Also, you don't think that a record number of companies leaving (193 in 2010 from 51 in 2009) indicates that CA is suffering a net deficit in company relocation? Using your common sense and personal experience, does it seem like 142 more companies relocated to CA in 2010 than in 2009 to offset 142 more companies leaving in 2010 than in 2009?

You dismiss what the CEOs think or the gross number of companies leaving CA (or my personal dealings with executives as a corporate partner at a law firm) but you are convinced by some poster making some vague reference to Cal's public policy study. It is hard for me to believe that academia has so much more insight into what businesses will do than the executives and the companies themselves.

At the end of the day, it doesn't matter. It seems like no one on either side will be convinced. Even God could tell us what is happening, and if we don't like it, we will just accuse him of being biased and, therefore, unreliable.

drunkoski;524881 said:

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this is a rather simplistic view about the way companies are run and speaks of someone who has never actually managed anyone. try cutting benefits and salaries for no reason and see what happens to your productivity and profitability and retaining key employees. any business analyst will tell you salary and benefits cuts are very rare and there is a reason for it. now if you are going to lay off employees who are unproductive and/or you don't need that is a completely different situation.

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No, I don't think you understand business as you take a very narrow view of how a company can cut its wages and benefits. Wages and benefits can and are cut by outsourcing, RIF's, attrition without replacement, buyout packages, merit increases below inflation, reduced bonuses, reduced benefit coverage, hiring people at lower levels to do the same work, and even temporary or permanent direct pay cuts which have been common in the recent recession.

These strategies are all commonplace and national productivity is through the roof. Maybe to be more clear for you I should have said employees, ex-employees, or those that aren't hired because their most recent job was at too high a level all receive less money.

drunkoski;524888 said:

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and pray tell how does the ceo making more money make me poorer in these situations? i'm forced to take a job for less than i deserve?

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Yes, the outsourced worker is poorer in these situations.

How is life in the isolated confines of the trading room floor?

drunkoski;524892 said:

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and what stops said outsourced worker for looking for a position that pays them appropriately? it's the ceo's fault that this person is too stupid to look for good work?

i'm not a trader.

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Ohhh, so it's not the CEO who made the worker poorer, it's the infallible invisible hand of the market. Got it. Thanks.

Sorry, thought you were a bond trader.

calbear93;524879 said:

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Using your common sense and personal experience, does it seem like 142 more companies relocated to CA in 2010 than in 2009 to offset 142 more companies leaving in 2010 than in 2009?

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I think it's quite possible that 142 new companies either relocated or were created in CA, yes. It's a big state.

In any event, I'm not saying that you are wrong about this, per se, only that the articles you cited don't seem to take the bulk of the evidence into account. They are only looking at one narrow part of it. Hence why I remain skeptical of the claim.

You might as well give up trying to convince the anti-business, pro-regulation, higher taxes leftists on this board that California has a poor business climate. They are driven by blind ideology and are in serious denial. Maybe when the unemployment rate in California reaches 15% they will begin to connect the dots. But I doubt it.

Golden One;524901 said:

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You might as well give up trying to convince the anti-business, pro-regulation, higher taxes leftists on this board that California has a poor business climate. They are driven by blind ideology and are in serious denial. Maybe when the unemployment rate in California reaches 15% they will begin to connect the dots. But I doubt it.

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Yes, a completely fair characterization of my views.

Thank you!

taxbear;524365 said:

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But this is not an effort to impose a tax on Amazon. It's an effort to require Amazon to collect a tax from its California customers that the customers owe. Internet retailers with sufficient presence (under Constitutional standards) in California are required to collect this tax; the "affiliate law" is one that several states (NY being the most notable) have passed to establish that the use of affiliates provides a sufficient presence in the state to require the retailer to collect the tax. Amazon lost court challenges in NY, and now collects the NY tax.

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And that is why Amazon is dumping the California affiliates, right? Otherwise, the imposition of tax collection on Amazon (or any other out-of-state retailer be it internet or catalog) is unconsitutional until Congress allows it.

That's exactly why Amazon is dumping the California affiliates.

Just FYI if you haven't seen it, on another thread there was a study posted that looks at the differences between TX and CA economic climates.

http://bearinsider.com/forums/showthread.php?t=44420

Most states wish they had the jobs and companies that call California their home.

Golden One;524704 said:

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You have very nicely summarized the 3 primary reasons that California is near bankrupt! I couldn't have said it better myself.

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Those reasons are easy scapegoats but I'd like to see an economic case study demonstrating how those factors are at all associated with California's current fiscal state. I believe you'll have difficulty because there is none. A "poor business climate" (if one believes it exists in the first place, which I would contend), has nothing to do with the current fiscal crisis. Historical revenue charts and changes in business regulations will show zero correlation.

Try reading the Economist article on California. California has a lot of spending tied up in special interests as a result of ballot box voting and a lot of revenue tied up, also because of ballot box voting. This is an issue that is independent of any "liberal" policies that conservatives love to bring up.

BearEatsTacos;525439 said:

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[INDENT][/INDENT] California has a lot of spending tied up in special interests as a result of ballot box voting and a lot of revenue tied up, also because of ballot box voting.

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This is certainly true; however, California's poor business climate (which is obvious to anyone in business or in a management position for a large company) certainly doesn't help. I'm a native California who lived 14 years in Texas during my professional career. I can tell you, based on personal experience, that the difference in business climate between the two states is huge.

oskimama;525462 said:

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This is certainly true; however, California's poor business climate (which is obvious to anyone in business or in a management position for a large company) certainly doesn't help. I'm a native California who lived 14 years in Texas during my professional career. I can tell you, based on personal experience, that the difference in business climate between the two states is huge.

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Even if one were to concede that California has a poor business climate, it's very difficult to argue that this has anything to do with California's current woes. The past 5 years haven't changed much with regards to corporate regulations, and this is the same set of regulations that created the 5th largest economy in the world just 10 years ago. Running a few regressions on the data sets of California's revenues against changes in regulations will confirm this. My point is that this is basically a strawman argument -- the real issue at hand doesn't have to do with business climate at all, yet conservatives will repeatedly point to it because that is what their ideology dictates should be the scapegoat.

BearEatsTacos;525550 said:

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Even if one were to concede that California has a poor business climate, it's very difficult to argue that this has anything to do with California's current woes. The past 5 years haven't changed much with regards to corporate regulations, and this is the same set of regulations that created the 5th largest economy in the world just 10 years ago. Running a few regressions on the data sets of California's revenues against changes in regulations will confirm this. My point is that this is basically a strawman argument -- the real issue at hand doesn't have to do with business climate at all, yet conservatives will repeatedly point to it because that is what their ideology dictates should be the scapegoat.

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+1. I have worked in Texas also. Conservatives avoid the point that you must pay for the quality of public life you want. It is easy to conclude that most conservatives reject public life in any form because their arguments present no alternative picture. Many parts of Houston lack even sidewalks. A college from New Orleans characterized Houston as "...fat city...", an environment so dependent on catering to development interests as to render the public realm a joke. California appeals to a lot of people who holds the quality of public life as vital to their lives. They expect their taxes to buy higher quality. These same people also constitute a very significant commercial market. Conservatives may disagree with me, but they don't turn down my money. (BTW I am a fourth generation Californian).

oskimama;525462 said:

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This is certainly true; however, California's poor business climate (which is obvious to anyone in business or in a management position for a large company) certainly doesn't help. I'm a native California who lived 14 years in Texas during my professional career. I can tell you, based on personal experience, that the difference in business climate between the two states is huge.

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But you live in California now, right? There must be something to the Golden State that you prefer. Environmental regulation may be perceived as anti-business, but many of us prefer cleaner air and water. Zoning laws (which Houston does not have) limit one's freedom to develop property without restriction, but protect the rights of neighbors (I wouldn't want a factory, gas station, high rise, etc. constructed next to my house). Taxes may be seen as anti-business but they pay for services (education, parks, etc.) which contribute to the quality of life we equate with living the California dream.

Where can I get this better quality public life that I keep hearing about in California? I live in SF and the public services seem pretty poor all around. I don't think everyone has a problem with paying more in taxes to get more public goods/services, but is that what's happening in California right now or are we paying more for nothing?

Unit2Sucks;525567 said:

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Where can I get this better quality public life that I keep hearing about in California? I live in SF and the public services seem pretty poor all around. I don't think everyone has a problem with paying more in taxes to get more public goods/services, but is that what's happening in California right now or are we paying more for nothing?

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Nevertheless you haven't moved to Texas, have you?

southseasbear;525570 said:

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Nevertheless you haven't moved to Texas, have you?

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Don't get me wrong, I love SF and I love California, but I enjoy living here despite the functioning of our government not because of it. Put another way, there are more than enough assets here (economic opportunity, Cal football, general splendor) to outweigh the major liabilities (high cost of living, terrible government) so the fact that I continue to live here should not be seen as a sign of approval for the way that our state and city are run.

Unit2Sucks;525567 said:

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Where can I get this better quality public life that I keep hearing about in California? I live in SF and the public services seem pretty poor all around. I don't think everyone has a problem with paying more in taxes to get more public goods/services, but is that what's happening in California right now or are we paying more for nothing?

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I understand your sentiment. FWIW, we lived in SF as renters for several years about 30 + years ago, before my wife's desire for a small town atmosphere similar to her childhood and soaring real estate prices forced us to look outside the city. When we lived in the city the police and fire services seemed to us to be first rate. (We had encounters with both). Our street (Broadway at the steps) was swept once a week. Muni then was likely no better then than Muni is now, but it was there I used it, and I realized the value that it represented by existing at all when I visited other cities. Can't comment on the hospital or emergency med services, no personal experience, though I recall hearing praise for both when we lived there.

From what I read, I am guessing that New York may be better than SF at the present time, though they have a considerably larger tax base to draw from, and it may be possible that NY politics are somewhat less fragmented than SF's meaning fewer hold outs for narrow agendas.

The public realm in San Anselmo, our Marin town, is likewise starved for funds for street, landscape, and building maintenance. The local library is supported by a voter approved tax levy dedicated to the library, the public schools are supported by similar voter approved levies and local fund drives outside the system. Similar supplementary support to sewer and water is forthcoming. These supplements add well over 2% to our property tax bills. Part of this is due to Arnold the Governator "borrowing" tax revenues from local governments and not paying them back.

southseasbear;525566 said:

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But you live in California now, right? There must be something to the Golden State that you prefer. Environmental regulation may be perceived as anti-business, but many of us prefer cleaner air and water. Zoning laws (which Houston does not have) limit one's freedom to develop property without restriction, but protect the rights of neighbors (I wouldn't want a factory, gas station, high rise, etc. constructed next to my house). Taxes may be seen as anti-business but they pay for services (education, parks, etc.) which contribute to the quality of life we equate with living the California dream.

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It seems like Houston/TX and the Bay Area are both extreme in their urban planning and regulation. Houston is too lax, while the Bay is far too restrictive on growth, which artificially keeps home prices too high.

Unit2Sucks;525574 said:

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Don't get me wrong, I love SF and I love California, but I enjoy living here despite the functioning of our government not because of it. Put another way, there are more than enough assets here (economic opportunity, Cal football, general splendor) to outweigh the major liabilities (high cost of living, terrible government) so the fact that I continue to live here should not be seen as a sign of approval for the way that our state and city are run.

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The "terrible government" includes the best system of higher education in the world. UT is a darn good school, but it's the best that they have in the state and it doesn't compare with Cal or Southern Branch. Add in other UC's and even some of the CSUs (Cal Poly SLO is fantastic) and it's clear that the state of Texas can't hold a candle to us.

"General splendor" sounds like an appreciation for the environment, which our government preserves. If the environment is not a concern to you, Texas is a great place.

I'm not saying that your conscientious decision to live here should be "seen as a sign of approval for the way our city and state are run" but an appreciation for what the state (and your city, wherever you live) offer. And guess what, there is no free lunch; the benefits you enjoy are paid from taxes.

Our government created the best public system of higher education in the world, that we are agreed on. Now - that same government is doing its best to ruin it, or at the very least to stop supporting it.

In my opinion, if our government was better (for instance if it was just as good as an average state government), California would be a nicer place to live than it currently is. If our government was the worst in the nation, I would likely still prefer to live here than anywhere else.

Similarly, I think SF is a fantastic place to live for a million reasons, but the government here is not well run. Even if you don't believe articles like this you should be able to accept the fact that there are objective measures of a government's function, and that (like California as a whole) SF can have an objectively bad one and still be a great place to live.

Obviously you and I don't see eye to eye on the impact of California's government on the state, which is fine. I'm not here to change your mind.

southseasbear;525637 said:

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The "terrible government" includes the best system of higher education in the world. UT is a darn good school, but it's the best that they have in the state and it doesn't compare with Cal or Southern Branch. Add in other UC's and even some of the CSUs (Cal Poly SLO is fantastic) and it's clear that the state of Texas can't hold a candle to us.

"General splendor" sounds like an appreciation for the environment, which our government preserves. If the environment is not a concern to you, Texas is a great place.

I'm not saying that your conscientious decision to live here should be "seen as a sign of approval for the way our city and state are run" but an appreciation for what the state (and your city, wherever you live) offer. And guess what, there is no free lunch; the benefits you enjoy are paid from taxes.

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Unit2Sucks;525659 said:

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Our government created the best public system of higher education in the world, that we are agreed on. Now - that same government is doing its best to ruin it, or at the very least to stop supporting it.

In my opinion, if our government was better (for instance if it was just as good as an average state government), California would be a nicer place to live than it currently is. If our government was the worst in the nation, I would likely still prefer to live here than anywhere else.

Similarly, I think SF is a fantastic place to live for a million reasons, but the government here is not well run. Even if you don't believe articles like this you should be able to accept the fact that there are objective measures of a government's function, and that (like California as a whole) SF can have an objectively bad one and still be a great place to live.

Obviously you and I don't see eye to eye on the impact of California's government on the state, which is fine. I'm not here to change your mind.

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First, I'm surprised anyone on this Board (and a S.F. resident, no less) would believe that S.F. is the "worst run city in America," as I thought that honor would be limited to Berkeley or L.A.

More seriously, I never said California or any of its cities was well run or had a good government. My point is that some degree of regulation is necessary to ensure our quality of life, despite all regulation being by definition anti-business.

I don't trust government. I trust business even less.

At this point we're talking past each other. I'm not even sure you're reading what I'm writing since I never held up Texas as a paragon, and I never insinuated that the "regulation" in California is affecting my quality of life or anything like that. Earlier in the thread I stated that despite the "anti-business climate" that people mentioned, California (the bay area in particular) is still a very attractive place for certain types of businesses.

So, we're in agreement that some degree of regulation is necessary - no qualms there. We appear to be in agreement that California does not have a well-run government.

I will continue to believe that the state and city governments could do better. I have little confidence that an increase in taxes/spending by California will result in tangible improvements unless that money is dedicated to education (both K-12 and postsecondary). Most likely, education will continue to be gutted while our money is squandered elsewhere (maybe on more high-speed rail because apparently the state and our forward-thinking citizens thinks that all business is done face-to-face and that somehow our economy will be revitalized if people can take trains across the state). I don't consider the high-speed rail project to be regulation, but I do consider it symbol of government failure. We need high-quality education in California, but we're spending money on trains.

southseasbear;525681 said:

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First, I'm surprised anyone on this Board (and a S.F. resident, no less) would believe that S.F. is the "worst run city in America," as I thought that honor would be limited to Berkeley or L.A.

More seriously, I never said California or any of its cities was well run or had a good government. My point is that some degree of regulation is necessary to ensure our quality of life, despite all regulation being by definition anti-business.

I don't trust government. I trust business even less.

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Unit2Sucks;525696 said:

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...Most likely, education will continue to be gutted while our money is squandered elsewhere (maybe on more high-speed rail because apparently the state and our forward-thinking citizens thinks that all business is done face-to-face and that somehow our economy will be revitalized if people can take trains across the state). I don't consider the high-speed rail project to be regulation, but I do consider it symbol of government failure. We need high-quality education in California, but we're spending money on trains.[emphasis added]

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Transportation is an important government function which will benefit individuals (flying is getting more expensive and more cumbersome) and businesses.

Yes, we need more spending on education, but we're spending money on prisons and welfare.

southseasbear;525776 said:

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Transportation is an important government function which will benefit individuals (flying is getting more expensive and more cumbersome) and businesses.

Yes, we need more spending on education, but we're spending money on prisons and welfare.

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Correct me if I'm wrong because I don't usually chat about this stuff but didn't Prop. 98 mandate that Calif spend a minimum of 40% of the general fund on education......and if this quote it true, it is closer to 50%...that seems like a ton of money for declining stats... Seems like so much of our money is mandated to go here or there...I wish they would do something about the Initiative/proposition system in Calif...it provides no flexibility whatsoever...

http://ballotpedia.org/wiki/index.php/California_Mandatory_Education_Spending,_Proposition_98_%281988%29

People who say things like the quote utterly amaze me:

"Every time I hear the terms "business-unfriendly" or "anti-business," I know they're uttered by yet another greedy capitalist hoping to evade any social responsibility whatsoever."
It is the entrepreneur, the business owner, the middle class wage earning tax paying citizen who pays the freight for all the spending done by this State.

I work with these people every single day and they all want to pay their fair share.........

What they don't want is unreasonable overly restrictive regulation, greedy, self serving (paying off the politicians who grant the favors that are bankrupting, cities, counties and the state) public employee unions, environmental regulations that are completely out of order from a cost/benefit standpoint (drive business out of our state and do no measurable or meaningful good such as AB 32).