In 1978 I was the Peace & Freedom Party’s candidate against Lieutenant Governor Merv Dymally (Democrat) and Republican challenger Mike Curb. There were three major issues in the race and one of them has just taken center stage, with President Obama taking the position on taxation that I took in that race.
Dymally and Curb agreed on all three issues. They both supported a proposed supertanker port being built in Los Angeles Harbor in conjunction with construction of a major interstate pipeline for petroleum products by SOHIO. SOHIO, or Standard of Ohio, was at that time owned by British Petroleum and if you believe in that company’s safety standards then that would have been a great idea. They also both supported repeal of the 160 acre limit of federal farm water subsidies that prevented agribusiness from getting subsidized water. Up to three family members on a family farm could get up to 160 acres of subsidized water each, a reasonable subsidy for small family farmers that agribusiness wanted to glom onto.
I was the only candidate that opposed both of those proposals; Dymally and Curb both endorsed them and campaigned for them.
The third issue involved the Unitary Tax. Although President Obama hasn’t referred to it as such, several times recently he has called for global taxation of the profits of multi-national corporations. In 1978, Dymally and Curb supported repeal of the Unitary Tax by California; I opposed its repeal. Soon after the election, the Democratic Party dominated California legislature repealed the Unitary Tax, costing the state hundreds of millions of dollars of revenue that we sure could have used to stay fiscally sound.
In the absence of a unitary tax on a multinational corporation’s worldwide income, it is a simple matter to manipulate the financial transactions of a company to keep from paying taxes to a state or to the federal government. Here’s how it works:
Corporation A in say, Japan, owns Corporation B in Japan and Corporation C in California. Corporation B makes car components and Corporation C assembles them in California. Corporation B gouges Corporation C in invoicing the company for the car components, so that on the books in California, very little profit is made. However, Corporations A and B make out like bandits. Even though their profits were generated in California, they pay next to nothing in California taxes.
A unitary tax would tax Corporation A because it owns Corporation C, so it can’t escape taxation by making it look like the profit was made overseas.
Just as I recently pointed out (http://janbtucker.com/blog/2012/02/13/capital-gains-political-losses/), the leadership of my own party, the Peace & Freedom Party, says nothing about this major issue that we once championed, as we did with Capital Gains tax reform. Yet, the party leadership thinks it is more relevant and more politically correct than the President of the United States who is now, to his credit, championing the issues PFP once stood for.