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Taxes

California Liberals Take Aim at Taxing Space Travel

Written by Philip Hodges

I don’t think liberals have met a tax they didn’t like. Especially liberals in California.

If taxes worked as well as liberals claimed, California would be the richest state in the U.S. Now, liberals will claim that Governor Jerry Brown has completely turned the state around and that it’s now a model of how to successfully govern a state into prosperity. But that’s hardly the case in reality. As Forbes notes:

According to figures released in 2014 by then-California controller, now State Treasurer, John Chiang, California’s unfunded public pension liabilities rose from $6.3 billion in 2003 to $241 billion in 2014. Yet that $241 billion figure, which represents 3,000% increase over a decade, doesn’t tell the whole story, as it assumes an optimistic nearly 8% return on pension investments. Economists and public finance experts point out that more realistic assumptions about rates of return put the state’s unfunded pension liabilities at nearly $1 trillion, or eight times the current general fund. That’s just the state’s unfunded pension liability. Unfunded retiree health benefits are another daunting challenge for California.

Forbes pins the blame largely on the state’s exorbitant tax rates and “poorly structured tax code”:

California levies the highest top marginal income tax rate in the nation at 13.3% and has the country’s 6th highest overall tax burden. Such a hostile tax climate has consequences. During the last decade, from 2000 to 2010, California had a net outmigration of over 1.2 million residents move to other states. Those former Californians took over $29 billion in income with them.

What’s one more tax, right?

Apparently, the state is considering taxing space travel. The San Francisco Chronicle reported:

According to the proposal, California will collect tax from space transportation companies based on a formula factoring in how often a company launches spacecrafts out of the state, and, most importantly, how far a commercial spacecraft travels from California soil. Between May and mid-October, there were eight launches from Vandenberg Air Force Base, in Santa Barbara County about 50 miles south of San Luis Obispo.

[…]

The Franchise Tax Board proposal said certainty about tax treatment “will lead to increased activity in the industry and will foster an atmosphere of growth and prosperity once present during the golden age of California’s aviation industry, thereby creating jobs as the industry thrives in this state.”

The problem with taxes like these is that inevitably it will drive those who will be potentially taxed away. The Chronicle continued:

At least one company has already been lured away from California for the promise of greater financial incentives — though of a more earthly variety. Moon Express, a company working to mine the moon for natural resources, moved from Mountain View to Florida.

In an email, the company’s CEO and founder, Bob Richards, said the company “relocated from California to Florida in part due to the State of Florida’s progressive economic development incentives designed to attract commercial space companies.

By all means, California, keep taxing people away.

The views expressed in this opinion article are solely those of their author and are not necessarily either shared or endorsed by EagleRising.com


About the author

Philip Hodges

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