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(CNN)   California wants to tax tech companies retroactively back to 2008, in their continuing campaign to get rid of excess economic activity   (tech.fortune.cnn.com ) divider line
    More: Stupid, franchise taxes, Franchise Tax Board, California, economic activity, legislative intent, small-business owners, Instagram, tax bill  
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1926 clicks; posted to Business » on 21 Feb 2013 at 2:08 PM (3 years ago)   |   Favorite    |   share:  Share on Twitter share via Email Share on Facebook   more»



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2013-02-21 01:45:19 PM  
Gotta pay their "fair share" right?
 
2013-02-21 02:16:28 PM  
When you lie down with Democrats, you wake up minus your wallet.
 
2013-02-21 02:16:59 PM  
Corporations are people my friend. They can go back 7yrs. on me.
 
2013-02-21 02:22:04 PM  

jjorsett: When you lie down with Democrats, you wake up minus your wallet.


California was a boom town when there was a republican gov. When you lie down with republicans you don't wake up.
 
2013-02-21 02:25:13 PM  
cdn.pjmedia.com
More jobs here in Texas.
 
2013-02-21 02:29:58 PM  
Ironically, it was the actions of a small business owner that led to the change. An Orange County businessman named Frank Cutler sued the FTB after being denied the tax break because less than 80% of his business was based in California, one of the incentive's caveats. The California Court of Appeals sided with Cutler and struck down the provision, saying it was discriminatory. In response, the Franchise Tax Board decided to eliminate the incentive entirely.

So, basically, submitter and the first two people in this thread are completely full of shiat and didn't bother to RTFA.
 
2013-02-21 02:33:35 PM  
What's really weird is that the article makes it seem like they're going to have to pay taxes on the OLD gains at the NEW rate, PLUS interest? Simply making people repay retroactively is bad enough, but the rest makes me picture Dick Dastardly as the head of the FTB. Sounds like this is going to cost them more in processing and court costs than they're going to gain. They should have just said, "OK, with this ruling we're going to end the credit but will grandfather in those who qualify under the new rules and had applied as of December 31, 2012".


johnryan51: Corporations are people my friend. They can go back 7yrs. on me.


So you'd have no problem with the feds not only eliminating the home mortgage deduction, but hitting everyone up for the amount taken off their tax bill in the past seven years.
 
2013-02-21 02:45:01 PM  

Harvey Manfrenjensenjen: What's really weird is that the article makes it seem like they're going to have to pay taxes on the OLD gains at the NEW rate, PLUS interest? Simply making people repay retroactively is bad enough, but the rest makes me picture Dick Dastardly as the head of the FTB.


They're retroactively removing a tax break because of a law suit. It's effectively as if the break never existed and the companies didn't pay their taxes fully. How else would it be handled?

I understand your point, but that's just how taxes work.
 
2013-02-21 03:00:38 PM  

Vegan Meat Popsicle: Ironically, it was the actions of a small business owner that led to the change. An Orange County businessman named Frank Cutler sued the FTB after being denied the tax break because less than 80% of his business was based in California, one of the incentive's caveats. The California Court of Appeals sided with Cutler and struck down the provision, saying it was discriminatory. In response, the Franchise Tax Board decided to eliminate the incentive entirely.

So, basically, submitter and the first two people in this thread are completely full of shiat and didn't bother to RTFA.


Yep, the sequence of events basically reads like this:

1) FTB sets up "keep business in California" tax breaks to bolster their economy
2) Asshat sets up business "in California" that outsources most of its work.
3) Asshat cries to some court that he's a job creator that is being picked on
4) Judge is either a bigger asshat or has a stroke, decides that an effort to keep business in California is discriminatory
5) Asshat demands buckets of money from the FTB for shipping California jobs to other states/countries
6) FTB decides it doesn't want to pay every outsourcing shiathead for taking money out of the state, counters with "how about this huge bag of dicks instead?"

Basically, another example of how "Job Creators" feel its their right to shiat all over everything.
 
2013-02-21 03:17:00 PM  

yukichigai: Basically, another example of how "Job Creators" feel its their right to shiat all over everything.


The best part is this all came about because the guy sold $2.3 million of stock in a startup and had to pay about $400,000 extra in taxes because it wasn't qualified under the incentive rules.

Since it's a 50% break, presumably this guy would have walked away from the sale with $1.5 million, but he was mad because he thought it should be $1.9 million. Now he's still not going to walk away with that because they're striking the law across the board, but a bunch of other people have to fork over an extra $120,000,000 in taxes as a result.

There's just never enough taking for some people. It's insane.
 
2013-02-21 03:20:27 PM  

yukichigai: Basically, another example of how "Job Creators" feel its their right to shiat all over everything.


yup. i loved this line though from the "job creator" that moved to texas:

"We have more companies here than talent, so they're having to pull a lot from California."

there's a reason why you are having trouble finding talent in texas, and it's a chronic problem in the state cause by the business friendly government. also importing in californians to texas is going to work out great, just great.
 
2013-02-21 03:47:19 PM  

Vegan Meat Popsicle: yukichigai: Basically, another example of how "Job Creators" feel its their right to shiat all over everything.

The best part is this all came about because the guy sold $2.3 million of stock in a startup and had to pay about $400,000 extra in taxes because it wasn't qualified under the incentive rules.

Since it's a 50% break, presumably this guy would have walked away from the sale with $1.5 million, but he was mad because he thought it should be $1.9 million. Now he's still not going to walk away with that because they're striking the law across the board, but a bunch of other people have to fork over an extra $120,000,000 in taxes as a result.

There's just never enough taking for some people. It's insane.



greed is to blame for most economic and political plights. the fact that it is so pervasive is why regulations are necessary to prevent the greedy few from ruining for everybody else.
 
2013-02-21 03:48:28 PM  

Vegan Meat Popsicle: Ironically, it was the actions of a small business owner that led to the change. An Orange County businessman named Frank Cutler sued the FTB after being denied the tax break because less than 80% of his business was based in California, one of the incentive's caveats. The California Court of Appeals sided with Cutler and struck down the provision, saying it was discriminatory. In response, the Franchise Tax Board decided to eliminate the incentive entirely.

So, basically, submitter and the first two people in this thread are completely full of shiat and didn't bother to RTFA.


Submitter who said businesses were being taxed retroactively, and TFA that says businesses are being taxed retroactively?  I guess I'm not sure what you're claiming is untrue.

\ Not subs, just curious
 
2013-02-21 04:25:24 PM  

Vegan Meat Popsicle: yukichigai: Basically, another example of how "Job Creators" feel its their right to shiat all over everything.

The best part is this all came about because the guy sold $2.3 million of stock in a startup and had to pay about $400,000 extra in taxes because it wasn't qualified under the incentive rules.

Since it's a 50% break, presumably this guy would have walked away from the sale with $1.5 million, but he was mad because he thought it should be $1.9 million. Now he's still not going to walk away with that because they're striking the law across the board, but a bunch of other people have to fork over an extra $120,000,000 in taxes as a result.

There's just never enough taking for some people. It's insane.


I think it's funny hilarious myself.
 
2013-02-21 04:30:03 PM  

Vegan Meat Popsicle: How else would it be handled?


Uh, with a bit of common sense, i.e. not retroactive?
 
2013-02-21 04:33:28 PM  

Vegan Meat Popsicle: Harvey Manfrenjensenjen: What's really weird is that the article makes it seem like they're going to have to pay taxes on the OLD gains at the NEW rate, PLUS interest? Simply making people repay retroactively is bad enough, but the rest makes me picture Dick Dastardly as the head of the FTB.

They're retroactively removing a tax break because of a law suit. It's effectively as if the break never existed and the companies didn't pay their taxes fully. How else would it be handled?

I understand your point, but that's just how taxes work.


Maybe, but adding interest? It's not the recipients' fault it was later found to be discriminatory. Ditto for taxing them at the new rate (if it fact that's the case, it wasn't clear from the article).

And it doesn't seem like the court forced them to do it, it was their call. They could have just said, "we're not offering this anymore". Again, using the mortgage interest deduction as an example... let's say SCOTUS decided that it was discriminatory against renters or something. Would you support the IRS going after every dime from every person who benefitted from it, at whatever the rate happened to be at the time of the ruling, plus interest? And then, 20 years later, the next SCOTUS determines that it wasn't discriminatory after all... now they have to give it all back?

I can see at most doing it retroactively to 2012 since people are still processing their taxes, but going back several years just reeks of spite.
 
2013-02-21 04:43:15 PM  

Harvey Manfrenjensenjen: I can see at most doing it retroactively to 2012 since people are still processing their taxes, but going back several years just reeks of spite.


i thought so too, but just realized anyone that started a business based in california but was under the 80% threshold in the past 20 years like the @sshat can demand tax rebates.

they really have no other choice but to do it this way. only saving grace would be to set up some future tax credit or some kind of settlement with those affected. the long term downside is probably a short term negative press and having to micromanage handing out tax credits to start ups.
 
2013-02-21 05:16:24 PM  

Harvey Manfrenjensenjen: Vegan Meat Popsicle: Harvey Manfrenjensenjen: What's really weird is that the article makes it seem like they're going to have to pay taxes on the OLD gains at the NEW rate, PLUS interest? Simply making people repay retroactively is bad enough, but the rest makes me picture Dick Dastardly as the head of the FTB.

They're retroactively removing a tax break because of a law suit. It's effectively as if the break never existed and the companies didn't pay their taxes fully. How else would it be handled?

I understand your point, but that's just how taxes work.

Maybe, but adding interest? It's not the recipients' fault it was later found to be discriminatory. Ditto for taxing them at the new rate (if it fact that's the case, it wasn't clear from the article).

And it doesn't seem like the court forced them to do it, it was their call. They could have just said, "we're not offering this anymore". Again, using the mortgage interest deduction as an example... let's say SCOTUS decided that it was discriminatory against renters or something. Would you support the IRS going after every dime from every person who benefitted from it, at whatever the rate happened to be at the time of the ruling, plus interest? And then, 20 years later, the next SCOTUS determines that it wasn't discriminatory after all... now they have to give it all back?

I can see at most doing it retroactively to 2012 since people are still processing their taxes, but going back several years just reeks of spite.


I think the main issue was that the court ruling struck down the "80% payroll and personnel in California" provision retroactively.  Because of that, other businesses that engaged in outsourcing would have been given the right to retroactively file for the exemption and claim huge refunds from the state.

If you want a simile (not a metaphor because I'm using "like"), it's like someone sets up a fund to give money to victims of gang violence, but only if they aren't in a gang.  Then some gangbanger gets a good lawyer and argues that the "no gangbangers" claim is discrimination and wins retroactively.  Suddenly you've got every hood in the ghetto putting in a claim for this fund every time there's a street war, using the money they get to buy a dozen more guns just so they can retaliate against whoever shot them.  Instead of being used to help victims, the fund is now being used to help the criminals who hurt the victims in the first place, and if you don't retroactively deny all the paid out claims every gangbanger who ever got shot will be able to retroactively apply for funding for every single incident that happened over the last 5 years.  At that point doing a retroactive billing thing would be the least amount of evil you can do.

And yes, I am comparing companies who outsource to murdering criminals.  At least most gangs have a code of ethics.
 
2013-02-21 05:31:10 PM  
Ah, companies who outsource are teh ebil. What about companies who dare to have an office in Nevada as well as their office in California?

CA is penalizing them.
 
2013-02-21 05:36:54 PM  
The court ruled the tax break was discriminatory.  I guess the FTB intepreted that as to say the law was struck down entirely?

It's one thing to kill the golden goose, but it's pretty spectacular to ramrod this story into an old GOP narrative by BLAMING the golden goose.
 
2013-02-21 05:42:04 PM  

johnryan51: jjorsett: When you lie down with Democrats, you wake up minus your wallet.

California was a boom town when there was a republican gov. When you lie down with republicans you don't wake up.


Who, that nanny-banging, Kennedy-clan-marrying, carbon-quota-loving, give-unions-whatever-they-want-just-don't-hurt-me quasi-Democrat? Please.
 
2013-02-21 05:46:56 PM  

yukichigai: And yes, I am comparing companies who outsource to murdering criminals.  At least most gangs have a code of ethics.


I believe most of the California legislature would agree with you, and probably wouldn't limit the comparison to just businesses that outsource. No wonder Texas is looking so good
 
2013-02-21 07:03:30 PM  

not5am: yukichigai: Basically, another example of how "Job Creators" feel its their right to shiat all over everything.

yup. i loved this line though from the "job creator" that moved to texas:

"We have more companies here than talent, so they're having to pull a lot from California."

there's a reason why you are having trouble finding talent in texas, and it's a chronic problem in the state cause by the business friendly government. also importing in californians to texas is going to work out great, just great.


The people are coming too.  Bee Cave, just outside of Austin, is just a bunch of transplanted Californians.  I'm really not a fan every tech company relocating to Austin.  The traffic here sucks enough as it is.  Texas is a big place, can set up shop somewhere besides Austin.
 
2013-02-21 07:22:45 PM  

Pumpernickel bread: not5am: yukichigai: Basically, another example of how "Job Creators" feel its their right to shiat all over everything.

yup. i loved this line though from the "job creator" that moved to texas:

"We have more companies here than talent, so they're having to pull a lot from California."

there's a reason why you are having trouble finding talent in texas, and it's a chronic problem in the state cause by the business friendly government. also importing in californians to texas is going to work out great, just great.

The people are coming too.  Bee Cave, just outside of Austin, is just a bunch of transplanted Californians.  I'm really not a fan every tech company relocating to Austin.  The traffic here sucks enough as it is.  Texas is a big place, can set up shop somewhere besides Austin.


As someone who has a business in California that also has offices in Austin, Austin is about the only place in Texas that has the educated workforce that tech companies need. There aren't as many qualified developers as there are here in the Bay area, but outside of Austin there's pretty much nothing.
 
2013-02-21 07:50:45 PM  

Pumpernickel bread: not5am: yukichigai: Basically, another example of how "Job Creators" feel its their right to shiat all over everything.

yup. i loved this line though from the "job creator" that moved to texas:

"We have more companies here than talent, so they're having to pull a lot from California."

there's a reason why you are having trouble finding talent in texas, and it's a chronic problem in the state cause by the business friendly government. also importing in californians to texas is going to work out great, just great.

The people are coming too.  Bee Cave, just outside of Austin, is just a bunch of transplanted Californians.  I'm really not a fan every tech company relocating to Austin.  The traffic here sucks enough as it is.  Texas is a big place, can set up shop somewhere besides Austin.


The issue is that California's problems are caused by their voters, who make farking stupid laws like the ones in TFA that make it difficult to do business in California.

When that happens people who want to start or run a business search for somewhere else to do it, such as Texas.

Then the unemployed people in California who voted for the laws that made their employers leave California in the first place find out "ooh, there are jobs in Texas!" and move there. Then they start voting for similar laws to what they had in California.

It's like a plague of farking locusts.

Thrag:

As someone who has a business in California that also has offices in Austin, Austin is about the only place in Texas that has the educated workforce that tech companies need. There aren't as many qualified developers as there are here in the Bay area, but outside of Austin there's pretty much nothing.

Bullshiat. The D/FW area has a half dozen colleges, many of them with IT degree programs. You aren't in Austin for the talent pool. You're in Austin because the Shiatty job market there lets you pay rock bottom wages, where the same programmer in other parts of the state actually makes a decent wage.

/Works IT in Dallas.
//Got an offer for a gig in Austin not long ago.
///Laughed.
 
jvl
2013-02-21 08:04:31 PM  
That's stupid!  No one is going to move from California to Texas because of taxes.  The weather sucks there and it's not Oregon.
 
2013-02-21 08:06:19 PM  

Pumpernickel bread: Bee Cave, just outside of Austin, is just a bunch of transplanted Californians


and every other californian is just some midwestern (or bostonian) transplant.
i really don't understand why people think that Californians are just going to move to texas and change nothing; business owners brag about moving to texas like they're going to get tax freedom  and technically skilled workers forever, like millions of people are going to move from one place to another and not bring their social ideals with them.
what're these business owners going to do when we californianize texas? threaten to pick up and move to ohio?

cities and states with ridiculously high population densities are hard to live in, and hard to do business in...who knew?
 
2013-02-21 08:31:18 PM  

asdfbeau: like millions of people are going to move from one place to another and not bring their social ideals with them.
what're these business owners going to do when we californianize texas? threaten to pick up and move to ohio?


Actually as sad as that is, the silver lining is them losing is an eventuality, until all IT jobs are replaced by apps.
 
2013-02-21 09:05:14 PM  

veive: Bullshiat. The D/FW area has a half dozen colleges, many of them with IT degree programs.


And from the ones we've interviewed none could pass a very basic programming skills test. So far I have been rather under impressed with the quality of graduates from schools in the D/FW area. Just having an IT program means shiat. Most IT programs everywhere are shiat.

You aren't in Austin for the talent pool. You're in Austin because the Shiatty job market there lets you pay rock bottom wages, where the same programmer in other parts of the state actually makes a decent wage.

The job market for tech workers in Austin is far from shiatty and the wages we pay are hardly "rock bottom". They aren't what I'd pay in the bay area of course, but developers who actually know what they are doing are not cheap in Austin. The reason I'm hiring in Austin is not for the job market, the only reason is that one of my lead developers wanted to move to Austin for his own personal reasons and since we had a sales office in Austin we decided to build a development team around him there. If all I was looking for was cheap wages Austin would be pretty far down the list of places I'd choose.

But please, do continue telling me my actions and motivations, your bitterness fueled powers of clairvoyance are truly amazing.
 
2013-02-21 09:27:59 PM  

Thrag: And from the ones we've interviewed none could pass a very basic programming skills test. So far I have been rather under impressed with the quality of graduates from schools in the D/FW area. Just having an IT program means shiat. Most IT programs everywhere are shiat.


Just out of curiosity, what constitutes a "very basic programming skills test"?
 
2013-02-21 10:33:28 PM  
 
2013-02-21 10:48:32 PM  

yukichigai: Basically, another example of how "Job Creators"

everybody feels its their right to shiat all over everything get the government to force others to subsidize them.

FTFY
 
2013-02-21 11:41:12 PM  

China White Tea: Thrag: And from the ones we've interviewed none could pass a very basic programming skills test. So far I have been rather under impressed with the quality of graduates from schools in the D/FW area. Just having an IT program means shiat. Most IT programs everywhere are shiat.

Just out of curiosity, what constitutes a "very basic programming skills test"?


Being willing to work a 60k job for 30k per year.
 
2013-02-22 12:07:43 AM  

China White Tea: Thrag: And from the ones we've interviewed none could pass a very basic programming skills test. So far I have been rather under impressed with the quality of graduates from schools in the D/FW area. Just having an IT program means shiat. Most IT programs everywhere are shiat.

Just out of curiosity, what constitutes a "very basic programming skills test"?


It starts with really basic things like explaining OO principles, explaining access control and the language specific levels. Write a really basic function like a string reversal. Do something with a collection. The hardest question that we usually get to is showing someone a really obviously not thread safe piece of code and ask how to make it thread safe. Failure candidates will usually give a blank stare at this point as if they don't even know what thread safe means. I am constantly amazed at how many programmers, even ones with experience on their resume, don't have a grasp of the basics. It's not as bad as right after the tech boom when all the cut and paste hacks that had climbed on the bandwagon were being shaken out of the industry. Still, it's not easy to find developers who actually know their shiat be it in San Francisco or Austin.

From years of hiring developers either someone gets it and aces the test or they fail miserably. There is little in between. The percentage of people who fail has grown over time. I blame in on lack of exposure to programming at an early age. There is a high correlation between people who fail and people who answer the question "when did you first get into programming?" with "in my freshman programming class". My generation was lucky in a way, more kids today have computers but those that do aren't forced to learn some programming to get entertainment value out of it. I grew up with a TRS-80, I learned Basic at age 9 for something to do with it. A whole generation of programmers grew up with similar stories. Those days are gone. A kid who gets a computer in middle school is given unlimited access to porn and computer games instead of a box that was useless until you ran across a copy of "Basic Games" in the bookstore and keyed in the listing for Hammurabi, inadvertently learning some programming in the way.

The test I give now is nothing. In the 90s I worked for a company that did some cutting edge systems software in C++. You really needed to know all the details of C++ and fully understand OOD. One of my colleagues would give a C++ quiz that made one candidate say "If this is what you guys are doing here I don't think I can do this job.". Though that test was in part designed to see if people would try to bullshiat their way through questions that even the most experienced C++ programmer might have to crack a manual to answer.
 
2013-02-22 12:10:43 AM  

jvl: That's stupid!  No one is going to move from California to Texas because of taxes.  The weather sucks there and it's not Oregon.


It's also full of texans.
 
2013-02-22 12:23:30 AM  

veive: China White Tea: Thrag: And from the ones we've interviewed none could pass a very basic programming skills test. So far I have been rather under impressed with the quality of graduates from schools in the D/FW area. Just having an IT program means shiat. Most IT programs everywhere are shiat.

Just out of curiosity, what constitutes a "very basic programming skills test"?

Being willing to work a 60k job for 30k per year.


I do love these assumptions.

The last programmer I hired when asked for salary requirements had under-priced himself based on his experience. I offered him about 10% more than what he asked. I don't low-ball people. I hire competent people and compensate them accordingly. I want people to stay and not run off the second someone offers them a few dollars more.

Also, your numbers are way off. 60k? For an experienced programmer? If you can't get at least 60k as a programmer in Austin today, even with only minimal experience, you are doing something seriously wrong. If you know programmers who actually know what they are doing and will work for 60k, please, send them my way. I would be thrilled to have someone who knows their shiat for 60k. Bring me someone who can pass a quiz and will work for 60k and I will hire them on the spot. Heck, I'd literally take two tomorrow if I could find them.
 
2013-02-22 02:01:20 PM  

Harvey Manfrenjensenjen: So you'd have no problem with the feds not only eliminating the home mortgage deduction, but hitting everyone up for the amount taken off their tax bill in the past seven years.


Stop giving them farking ideas!
 
2013-02-22 11:09:59 PM  
Wow, so rich business owners who sold their companies, pocketing millions will have to pay their share of taxes on those millions.

THE HORROR

Won't someone please think of the rich business owners?
 
2013-02-23 04:05:03 AM  

jvl: it's not Oregon.


this is a plus for almost any state
 
2013-02-24 10:36:41 PM  

BravadoGT: Gotta pay their "fair share" right?


What is hilarious is that it was some greedy asshat (probably Republican) who didn't qualify, and he just had to ruin it for everyone.  Yet, you aren't blaming him, because you are a moron.
 
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