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That type of thinking has pushed entrepreneurs and businesses to move to more friendly and competitive states. It's simply a bad policy to start aspiring small

That type of thinking has pushed entrepreneurs and businesses to move to more friendly and competitive states. It's simply a bad policy to start aspiring small businesses in debt. $800 isn't much to many of us on here but it is for a lot of people that want to be entrepreneurs in different fields from different backgrounds. Most businesses have other startup costs as well. California already has the highest state income taxes. The privilege of doing business here is already accounted for. The franchise tax fee is just a bad policy and it's regressive.

dragonwriter 9y ago
> $800 isn't much to many of us on here but it is for a lot of people that want to be entrepreneurs in different fields from different backgrounds. And, so, they start businesses as sole proprietorships, or general or limited partnerships, and reorganize as LLCs or corporations once they've proven the idea. They are exposed to more (and the public exposed to less) risk of unmet business liability, but they can still run a business. We always see entrpreneurs praised for taking risk, why are we hearing so much complaint that California charges for the privilege of offloading risk on to the public?
JKCalhoun 9y ago
> That type of thinking has pushed entrepreneurs and businesses to move to more friendly and competitive states. Or simply get an LLC from another state. Seems like there are states (Utah?) where there is no annual fee/tax. I believe you only need a CA LLC if you hire employees in CA.
- mark212 9y ago
  Not quite that simple but you’re right that if you can be physically present outside the state and do business for California clients then you’re probably not going to pay the franchise tax. But no state allows you to register any entity for free. Lowest I’ve seen is South Dakota at $50 per year with no other tax on receipts.
  - jjeaff 9y ago
    ND is $50 to renew, but $150 filing fee. Wyoming is $100 filing fee and also $50 to renew.
inferiorhuman 9y ago
> California already has the highest state income taxes. California has a pretty progressive income tax. It's the highest at the top income bracket (> $1 mil is taxed at around 13%), but it's significantly lower at the low end than many other states including Alabama, Arizona, Connecticut, Kansas, Maine, Maryland, Minnesota, New York, Oregon, Rhode Island, Vermont, West Virginia, Wisconsin, and DC.
- jjeaff 9y ago
  That is much more a result of the much higher basic cost of living vs those other states than it is CA's progressiveness when it comes to taxes. I'd be willing to bet that if you adjusted the brackets for cost of living, CA is taxing the poor more than those other states are.
  - inferiorhuman 9y ago
    > I'd be willing to bet that if you adjusted the brackets for cost of living, CA is taxing the poor more than those other states are. Why bet when you could actually look up the figures yourself? California has a very progressive income tax with more brackets (ten) than other states, starting at 1% for the lowest bracket. Meanwhile North Carolina charges a flat 5.75% and Wisconsin's lowest income tax bracket is 4%.
    - jjeaff 9y ago
      Because a cursory lookup doesn't tell you much. Taxes are much more nuanced than a tax table. There are studies showing that a flat tax without loopholes or special deductions is a higher effective rate for the wealthy than a "higher" marginal rate in a progressive system. Additionally, states vary in what is deductible or non-taxable income.

dragonwriter 9y ago

> $800 isn't much to many of us on here but it is for a lot of people that want to be entrepreneurs in different fields from different backgrounds. And, so, they start businesses as sole proprietorships, or general or limited partnerships, and reorganize as LLCs or corporations once they've proven the idea. They are exposed to more (and the public exposed to less) risk of unmet business liability, but they can still run a business. We always see entrpreneurs praised for taking risk, why are we hearing so much complaint that California charges for the privilege of offloading risk on to the public?

JKCalhoun 9y ago

> That type of thinking has pushed entrepreneurs and businesses to move to more friendly and competitive states. Or simply get an LLC from another state. Seems like there are states (Utah?) where there is no annual fee/tax. I believe you only need a CA LLC if you hire employees in CA.

mark212 9y ago
Not quite that simple but you’re right that if you can be physically present outside the state and do business for California clients then you’re probably not going to pay the franchise tax. But no state allows you to register any entity for free. Lowest I’ve seen is South Dakota at $50 per year with no other tax on receipts.
- jjeaff 9y ago
  ND is $50 to renew, but $150 filing fee. Wyoming is $100 filing fee and also $50 to renew.

inferiorhuman 9y ago

> California already has the highest state income taxes. California has a pretty progressive income tax. It's the highest at the top income bracket (> $1 mil is taxed at around 13%), but it's significantly lower at the low end than many other states including Alabama, Arizona, Connecticut, Kansas, Maine, Maryland, Minnesota, New York, Oregon, Rhode Island, Vermont, West Virginia, Wisconsin, and DC.

jjeaff 9y ago
That is much more a result of the much higher basic cost of living vs those other states than it is CA's progressiveness when it comes to taxes. I'd be willing to bet that if you adjusted the brackets for cost of living, CA is taxing the poor more than those other states are.
- inferiorhuman 9y ago
  > I'd be willing to bet that if you adjusted the brackets for cost of living, CA is taxing the poor more than those other states are. Why bet when you could actually look up the figures yourself? California has a very progressive income tax with more brackets (ten) than other states, starting at 1% for the lowest bracket. Meanwhile North Carolina charges a flat 5.75% and Wisconsin's lowest income tax bracket is 4%.
  - jjeaff 9y ago
    Because a cursory lookup doesn't tell you much. Taxes are much more nuanced than a tax table. There are studies showing that a flat tax without loopholes or special deductions is a higher effective rate for the wealthy than a "higher" marginal rate in a progressive system. Additionally, states vary in what is deductible or non-taxable income.