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California ranked 48th out 50 states in the Washington, D.C.-based Tax Foundation’s 2014 State Business Tax Climate Index.

Governor Jerry Brown has signed legislation that will kill the Franchise Tax Board attempt to retroactively collect taxes from stockholders who took advantage of small business investment incentives that a court later ruled were part of an illegal program.

The battle is on to get more support for film and television production from the California government. Only days after Los Angeles Mayor Eric Garcetti put industry vet Tom Sherak in charge of lobbying Sacramento for more tax credits for Hollywood, the Motion Picture Association of America has issued a new call to bolster the incentive program for big-budget blockbusters.

SACRAMENTO – Moving to defend Governor Edmund G. Brown Jr.’s landmark package of pension reforms, the state of California today sued the U.S. Department of Labor for improperly denying federal grants to California public transit providers after it erroneously concluded that the pension reforms constrain workers’ collective bargaining rights.

“Bringing this lawsuit is just another step to ensure that our pension system is viable long into the future,” said Governor Brown.

Two state legislators said this week they will introduce motions next January to boost tax incentives for film and television production, one of a handful of bills addressing runaway production.

Four measures, part of a package of 18 business-friendly bills approved Friday, seek to ease the regulatory burden on developers of smartphone-based payment systems; reverse a retroactive tax hike on investors in small start-up companies, and create a “Made in California” program to help market innovative, locally manufactured consumer products.

“The cost of financing California government with bonds is expected to consume 7.7% of the state’s general fund tax revenue over the next year, according to a new report from the state Treasurer Bill Lockyer.

The total bill is pegged at $7.5 billion for principal and interest. That’s a reduction from last year, when it totaled $8.6 billion and was 8.8% of revenue.”

A Texas-based conservative think tank, the National Center for Policy Analysis, has entered the debate by launching an interactive website that allows users to calculate the tax effects of moving from one state to another.

“Gov. Jerry Brown has repeatedly pledged to tear down what he calls California’s “”wall of debt.””

But Brown’s definition of that debt wall – about $30 billion in accumulated deficits from recent state budgets – is less than 10 percent of the debt that state and local governments have amassed, according to a new compilation by the California Taxpayers Association, if one includes unfunded liabilities for public employee pensions.

Cal-Tax researchers counted $443 billion in state and local debts, roughly two-thirds of it carried by the state and the other third by local agencies. That’s the equivalent of a fifth of the state’s annual economic output and amounts to $11,600 for each of California’s 38 million residents. “

California state and local governments face more than $443 billion in outstanding liabilities from borrowing, deferrals, and other unfunded financial obligations.

“California is recovering from the worst recession since the Great Depression. But as a new report from UCLA’s Anderson School of Management points out, that recovery is slow and uneven.

Meanwhile, opinion polls have found that Californians remain very concerned about whether the recovery will be complete.

Gov. Jerry Brown and other politicians have been touting recovery of late, but they cannot ignore the public’s angst. Often, therefore, when bills were traveling through the legislative process this year, their economic effects — positive or negative — became debating points.”

The five states with the highest average combined rates are Tennessee (9.44 percent), Arkansas (9.18 percent), Louisiana (8.89 percent), Washington (8.87 percent), and Oklahoma (8.72 percent). . . California, which raised its sales and income taxes through the initiative process in November of 2012, has the highest state-level rate at 7.5 percent.] Five states tie for the second-highest statewide rate with 7 percent each: Indiana, Mississippi, New Jersey, Rhode Island, and Tennessee.

As lawmakers consider policies to improve the competitiveness of American businesses, they should not forget that individual income tax rates are just as important to business activity as the corporate rate.  The various proposals to raise income taxes on high-income earners, either by increasing the top marginal rate, closing “loopholes,” limiting deductions, or implementing a minimum tax, would fall very heavily on America’s non-corporate businesses. Pass-through businesses are currently facing top marginal rates on average between 44.5 percent and 47.5 percent and as high as 51.8 percent in California. These pass-through businesses account for a large percentage of business income and employment in the United States. Raising taxes on them could curtail their hiring and other investment plans, putting more strain on an already struggling economy.

California imposed a huge retroactive income tax increase last year, but some 2,500 small business owners are learning that once is never enough for Sacramento. The state now wants to hit them with a retroactive levy going back to 2008, to the tune of $120 million or more.

North Carolina is close to dropping one of the most extensive programs for awarding tax breaks to film companies, in what would be a high-profile retreat from an arms race among states to lure Hollywood productions.